They’re gonna fight it, too.
Per CNBC, Microsoft has been slapped by the IRS with $29 billion in back taxes. This comes from an 8K filing, which came out Wednesday.
Naturally, they disagree with the claims, and plan to fight this in court, should it come to that. But before that, they’ll have to go through the IRS’ administrative appeal, which can actually take up to several years.
As Microsoft explains it, the bill relates to profits from 2004 to 2013. The primary source of disagreement between the company and the federal agency is the allocation of profits across countries and jurisdictions during this time period. The big M also claims that up to $10 billion of these taxes which were already paid are not reflected in the IRS’ adjustments.
Microsoft disagrees with these proposed adjustments and will pursue an appeal within the IRS, a process expected to take several years. We believe we have always followed the IRS’s rules and paid the taxes we owe in the U.S. and around the world. Microsoft historically has been one of the top U.S. corporate income taxpayers. Since 2004, we have paid over $67 billion in taxes to the U.S.
Microsoft doesn’t expect a resolution within the next 12 months, nor an increase in their tax contingencies within the same time period. The also believe that their contingencies, as of September 2023, are “adequate”.
That said, it’s gotta sting for Microsoft, at least a little bit. They’re on the cusp of closing the $69 billion deal for their merger with Activision Blizzard. Hypothetically being on the hook for 2/5ths of that in taxes is probably not something they were expecting.
Source: IGN
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