U.S. IRS demands $28.9 billion in back taxes from Microsoft
Microsoft has been hit with a demand for $28.9 billion in back taxes from the U.S. Internal Revenue Service (IRS) which the upside-down and backwards MacOS knockoff-peddler intends to contest.
Per a recent 8-K filing by the company, along with back taxes, this demand encompassed penalties and interest for late payment. The core of this dispute centers on Microsoft’s use of transfer pricing, a practice that has been criticized for allowing companies, particularly in the tech sector, to shift profits to low-tax countries, thereby reducing their tax obligations.
Microsoft disclosed over a decade ago that it conducted its software production and distribution through regional centers in countries like Singapore, Dublin and Puerto Rico. By doing so, it was able to manage its profits in a manner that reduced its overall tax burden. This approach of allocating profits to different locations, based on where a portion of the costs and assets are situated, is commonly employed by multinational tech corporations.
Microsoft has expressed its disagreement with IRS’s latest tax demand. It has indicated its intention to contest the claims vigorously through IRS’s administrative appeals office, a process that could span several years. If necessary, MSFT is willing to take the matter to court. Additionally, the company stated that it would not set aside any additional reserves to cover the tax claim.
MacDailyNews Take: $28.9 billion is not a small number, even for the likes of lying, thieving, perpetually slimy Microsoft. In two weeks, the outfit built on copying Apple’s indomitable Mac and leveraging that to monopolize office suite software, the utterly failed smartphone maker, the also-ran search engine / personal data scraper, and the subsidized tablet-maker to the NFL will to announce its financial results for fiscal 2024’s first quarter. The Zacks Consensus Estimate for the company’s Q124 revenue is $54.42 billion.
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