Microsoft plans to appeal US$28.9 billion tax claim from US Internal Revenue Service
- The Internal Revenue Service says the company owes at least US$28.9 billion in taxes from 2004 to 2013
- Before Microsoft changed its corporate structure and practice, it had been moving billions of dollars in profits to jurisdictions with lower tax rates
The company said Wednesday in a regulatory filing that it disagreed with the “notices of proposed adjustment” to its federal tax filings and will appeal the decision.
The company has changed its corporate structure and practices since the years covered by the audit, so the issues raised by the IRS are not relevant to the way income is recorded currently, Daniel Goff, a Microsoft vice-president, said in a blog post.
Goff wrote that Microsoft has been working with the IRS for almost a decade to address questions about how the company allocates income and expenses for tax purposes. The Redmond, Washington-based company said the proposed additional tax bill of US$28.9 billion does not include taxes paid under the Tax Cuts and Jobs Act of 2017, which could reduce the tally by as much as US$10 billion.
“We strongly believe we have acted in accordance with IRS rules and regulations and that our position is supported by case law,” Goff said in the post. “We welcome the IRS’s conclusion of its audit phase which will provide us with the opportunity to work through these issues at IRS Appeals, a separate division of the IRS charged with resolving tax disputes.”