The U.S. Internal Revenue Service is demanding $28.9 billion from Microsoft for unpaid taxes between 2004 and 2013, plus interest and penalties, according to a stock exchange document published by the IT giant on Wednesday.
In the same document, Microsoft announces that the group will contest the IRS’s demands.
Daniel Goff, the company’s vice president in charge of international tax issues, said the IRS internal appeals process takes years, and if Microsoft fails to reach a direct agreement with the tax authority, it will then be able to challenge the unresolved issues in court.
According to Goff, the dispute concerns the allocation of Microsoft’s profits between countries and jurisdictions between 2004 and 2013. He believes the IRS has failed to take into account up to $10 billion in taxes already paid by Microsoft.
He insists that the company believes it has always paid the taxes owed in the USA and around the world.
According to the stock exchange document, Microsoft considers its provisions for tax risks to be “sufficient” at this stage.
Microsoft generated sales of $212 billion in its last financial year (ending June 30, 2023), including net income of over $72.4 billion.
