In September, Microsoft disclosed that it had received a notice from the US Internal Revenue Service (IRS) indicating their request for an additional tax payment amounting to $28.9 billion, which includes penalties and interest. This request pertains to the tax years spanning from 2004 to 2013.
This IRS notification stems from an ongoing dispute between Microsoft and the US tax authority. The IRS is currently conducting an audit to examine how Microsoft distributed its profits across various countries and jurisdictions.
Microsoft clarified that it has since modified its practices, ensuring that the concerns raised by the IRS are no longer applicable to their current operations, as stated in a Microsoft blog.
Microsoft is optimistic that, following the audit, the amount owed in taxes could be reduced by as much as $10 billion, based on changes in tax legislation enacted during the tenure of former President Donald Trump.
The company disagrees with the IRS’s conclusions and intends to challenge them. Microsoft’s plan involves initiating the dispute resolution process internally within the IRS, and if necessary, pursuing legal action.
The IRS, in response to these developments, stated that it is legally unable to confirm or deny whether it is conducting an audit on any specific taxpayer.
