Microsoft said on Wednesday, that the U.S. Internal Revenue Service (IRS) notified the company in September, requiring it to make up for the 28.9 billion U.S. dollars (Currently about RMB 210.681 billion) in taxes incurred between 2004-2013, as well as penalties and interest.
Microsoft Corp. said the IRS notice is related to an ongoing dispute between the company and U.S. tax authorities, who are auditing how Microsoft distributes its profits across different countries and regions.
Daniel Goff, a Microsoft vice president, wrote in a blog post:
Microsoft has changed its corporate structure and related operations since the years covered by the audit, so the issues raised by the IRS are not relevant to current corporate operations. Microsoft has been working with the IRS for nearly a decade to address questions about how the company allocates income and expenses for tax purposes.
We are confident that our actions are in compliance with IRS rules and regulatory requirements and that we can rely on case law to support us. We welcome the conclusion of the IRS's audit phase, which will give us the opportunity to resolve the tax dispute in an appeal before the IRS, an independent arm of the IRS.Microsoft also stated that the IRS’s proposed additional tax bill of $28.9 billion does not include taxes paid under the Tax Cuts and Jobs Act, which could result in a reduction in the total tax bill of as much as $10 billion.
Microsoft has indicated that it disagrees with the IRS’s findings and plans to contest them, first in the IRS’s internal proceedings and then, if necessary, in court.
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