The IRS has notified Microsoft that it owes $28.9 billion in back taxes, along with penalties and interest, for the years 2004 through 2013.
Microsoft's VP for worldwide tax and customs, Daniel Goff, addressed this in a blog post, stating that the company has since changed its corporate structure and practices. Goff emphasized that the IRS's proposed adjustments do not account for the amounts paid under the Tax Cuts and Jobs Act, potentially reducing the final tax owed by up to $10 billion. Microsoft also cited a disagreement with the IRS regarding the allocation of profits internationally through cost-sharing transfer prices.
Microsoft has expressed its disagreement with the IRS's proposed adjustments and intends to vigorously contest them. It's worth noting that Microsoft does not anticipate a swift resolution to this dispute. In a separate matter, the company recently succeeded in overcoming the FTC's attempt to secure a preliminary injunction against its acquisition of Activision Blizzard for $68.7 billion, with the deal expected to close on October 13th.
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