<div class="textg" style="text-align: justify; font-weight: lighter; line-height: 1.3em; font-size: 15px; border-radius: 3px; color: #80909a; padding: 10px; background-color: #F4F6F9; margin-bottom: 15px;">
 Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our&nbsp;<a href="https://tokenist.com/terms-of-service/" style="text-decoration:underline;color:#3c7b7b" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">website policy</a>&nbsp;prior to making financial decisions.
</div>
<p class="has-drop-cap">The Internal Revenue Service (IRS) <a aria-label="demanded $28.9 billion in back taxes (opens in a new tab)" href="https://www.reuters.com/technology/microsoft-receives-tax-notice-irs-2023-10-11/" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">demanded $28.9 billion in back taxes</a> from Microsoft (NASDAQ: MSFT) related to the company’s profits between 2004 and 2013, the company revealed in a recent filing. Microsoft (NASDAQ: MSFT) vigorously denied the IRS’s claims, adding it would contest the agency’s move and even fight it in court if needed. The impact of the news on the tech giant’s stock was limited, with shares up approx. 5% over the last five days.</p>
<h3 id="what-is-the-irs-accusing-microsoft-of">What is the IRS Accusing Microsoft of?&nbsp;</h3>
<p>In a <a aria-label="regulatory filing (opens in a new tab)" href="https://microsoft.gcs-web.com/node/31951/html" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">regulatory filing</a> published on Wednesday, Microsoft (NASDAQ: MSFT) revealed that it had received a request for $28.9 billion in back taxes from the IRS. The staggering amount concerns Microsoft’s tax liability between 2004 and 2013.&nbsp;</p>
<p>The request for taxes, coupled with penalties and interest for late payment, represents the latest spin in the saga that has been considered the most notable challenge to a well-known form of international tax planning utilized by US tech giants to reduce their tax bills.&nbsp;</p>
<p>The IRS has been investigating the Windows maker’s use of transfer pricing – a practice that companies use to unfairly route their profits to low-tax countries in a bid to reduce liabilities, according to critics. Over ten years ago, Microsoft revealed that it produced and marketed its software across regional centers in Singapore, Puerto Rico, and Dublin, allowing the tech giant to minimize taxes.&nbsp;</p>
<p>For years, tech firms have been strategically placing their intellectual property overseas. By doing this, they can make a case that if a portion of the expenses associated with developing and upkeeping their critical assets is incurred in a foreign nation, then some of the profits associated with that technology should likewise be attributed to that foreign jurisdiction.</p>
<div class="cta-referral"><img src="https://tokenist.com/wp-content/themes/thetokenist/assets/img/del/cta-referral-1.png" alt="" class="cta-referral__img" loading="lazy" decoding="async">
 <div class="cta-referral__text">
  <p>Join our&nbsp;<a href="https://t.me/thetokenist" target="_blank" rel="noopener noreferrer nofollow">Telegram group</a>&nbsp;and never miss a breaking digital asset story.</p>
 </div>
</div>
<h3 id="microsoft-denies-wrongdoing-says-it-s-ready-to-fight-irs-in-court">Microsoft Denies Wrongdoing, Says It’s Ready to Fight IRS in Court</h3>
<p>In response, Microsoft fiercely expressed disagreement with the IRS’s request, adding it would “vigorously contest” the agency’s allegations “through the IRS’s administrative appeals office” – a procedure that would last for “several years.” Furthermore, the second most valuable company in the world said it is also prepared to challenge the IRS in court if necessary. It would not put aside any extra reserves to cover the tax penalty.</p>
<blockquote class="wp-block-quote">
 <p>“Microsoft disagrees with these proposed adjustments and will pursue an appeal within the IRS, a process expected to take several years. We believe we have always followed the IRS’s rules and paid the taxes we owe in the U.S. and around the world.”</p> <cite>– the company said in its filing.</cite>
</blockquote>
<p>The tech behemoth said it has changed its tax practices in recent years, making the concerns raised by the IRS relevant only to the past but not to the present. Additionally, any taxes owed after the <a href="https://www.seattletimes.com/business/microsoft/microsoft-irs-spar-over-long-running-probe-of-its-taxes/" target="_blank" aria-label="IRS’s long-standing audit (opens in a new tab)" rel="noopener noreferrer nofollow" class="deco-link">IRS’s long-standing audit</a> would be slashed by up to $10 billion based on tax laws passed by former US President Donald Trump, Microsoft added.&nbsp;</p>
<p>Microsoft’s <a href="https://tokenist.com/investing/how-do-stocks-work/" rel="noopener noreferrer nofollow" class="deco-link">stock</a> saw no negative impact at the Thursday market open, trading relatively unchanged in the past 24 hours.&nbsp;The company’s shares <a href="https://tokenist.com/microsoft-up-8-2-premarket-on-strong-earnings-will-continue-ai-push/" rel="noopener noreferrer nofollow" class="deco-link">saw a notable surge</a> in 2023, driven by the ongoing <a href="https://tokenist.com/microsoft-shifts-focus-to-ai-terminates-metaverse-division/" rel="noopener noreferrer nofollow" class="deco-link">artificial intelligence (AI) craze</a>.</p>
<div class="cta-sub js__cta-sub">
 <div class="cta-sub__start" data-step="1">
  <div class="cta-sub__title"><strong>Finance is changing.</strong>
  </div>
  <div class="cta-sub__subtitle">
   Learn how, with Five Minute Finance.
  </div>
  <div class="cta-sub__excerpt">
   A weekly newsletter that covers the big trends in FinTech and Decentralized Finance.
  </div> <button type="button" class="btn">Try it out (for free)</button>
 </div>
 <div class="cta-sub__form" data-step="2" style="display: none;">
  <script type="text/javascript" src="https://app.getresponse.com/view_webform_v2.js?u=QcLhh&amp;webforms_id=zw3Wv"></script>
 </div>
 <div class="cta-sub__result" data-step="3" style="display: none;">
  <div class="cta-sub__title">
   Awesome
  </div>
  <div class="cta-sub__caption">
   You’ve subscribed.
  </div>
  <div class="cta-sub__greeting">
   You’re well on your way to being in the know.
  </div>
 </div>
</div>
<p><em><strong>Would Microsoft come out on top in its dispute against the IRS? Let us know in the comments below.&nbsp;</strong></em></p>
<p>The post <a rel="noopener noreferrer nofollow" href="https://tokenist.com/why-investors-shouldnt-worry-about-the-irs-asking-microsoft-for-29b-in-back-taxes/">Why Investors Shouldn’t Worry about the IRS Asking Microsoft for $29B in Back Taxes</a> appeared first on <a rel="noopener noreferrer nofollow" href="https://tokenist.com">Tokenist</a>.</p>

Why Investors Shouldn’t Worry about the IRS Asking Microsoft for $29B in Back Taxes

Table of Contents

Tokenist

Other articles published on Oct 12, 2023

Delabs Games Opens Pre-Registration for Global Open Beta Test of Rumble Racing Star

Decred (DCR) Price Prediction 2024, 2025, 2030, 2040, and 2050

DCJPY CBDC Creator Optimist for Digital Currency Launch by 2024

Sei (SEI) Price Prediction 2024, 2025, 2030, 2040, and 2050

BNB Chain exploited in flash loan attack, attacker snags $1.27M

China’s Crypto Ban: Attention-Grabbing Decision in Tether Case

Join our free newsletter for daily crypto updates!