Title: IRS Claims Microsoft May Owe $28.9 Billion in Back Taxes; Tech Giant Disputes the Accusations
In a recent turn of events, the Internal Revenue Service (IRS) has notified tech giant Microsoft that it may be liable to pay a staggering $28.9 billion in back taxes, penalties, and interest. The IRS alleges that these financial obligations have accrued from the years 2004 through 2013.
According to the IRS, its tax adjustments are in line with regulations, and it is prepared to escalate the issue to judicial proceedings if necessary. However, Microsoft is disputing these claims, arguing that the IRS’ adjustment fails to account for the Tax Cuts and Jobs Act, which could potentially reduce the company’s financial obligations by up to $10 billion.
Confirming receipt of Notices of Proposed Adjustment from the IRS on October 11, Microsoft does not anticipate reaching a resolution on this matter within the next 12 months. Speaking on behalf of the company, Microsoft’s Vice President for worldwide tax and customs pointed out that the organization has since made significant changes in its practices and corporate structure, rendering the IRS’ concerns more applicable to the past rather than current practices.
To address this issue, Microsoft intends to appeal within the IRS, a process that could potentially span several years.
It is worth noting that the IRS has recently integrated artificial intelligence (AI) tools to identify potential tax evasions, focusing particularly on wealthy taxpayers and companies employing intricate schemes to evade taxes. This move indicates the agency’s commitment to ensuring tax compliance across various industries.
Microsoft’s recent acquisition of gaming giant Activision Blizzard had also drawn attention, with the Federal Trade Commission (FTC) scrutinizing the deal. However, Microsoft successfully navigated this obstacle.
As news of the IRS’s claim broke, many news outlets approached Microsoft for comment. However, the tech giant has yet to respond to Gizmodo’s request for a statement regarding the matter.
With the IRS and Microsoft at odds over the alleged outstanding tax liabilities, it remains to be seen how this situation will unfold. Both parties appear determined to advocate for their positions, leaving the matter in the hands of the legal system and potentially causing a protracted legal battle.
