The company will appeal
According to the Internal Revenue Service (IRS), Microsoft owes the US Treasury $28.9 billion in unpaid taxes, penalties, and interest.
That figure, which Microsoft disputes, is based on a long-running IRS investigation into how Microsoft distributed its profits across countries and jurisdictions between 2004 and 2013.
Critics of the practice, known as transfer pricing, argue that companies often use it to minimize their tax burden by reporting lower profits in high-tax countries and higher profits in lower-tax jurisdictions.
Microsoft accused of evading payments of almost $30 billion
Microsoft, headquartered in Redmond, Washington, said it followed IRS rules and would appeal the agency’s decision. This process is expected to take several years.
The company has since changed its practices to “the issues raised by the IRS are relevant to the past but not to our current practices.” Microsoft estimates that any taxes due after the audit will be cut by up to $10 billion under tax legislation passed by Donald Trump.
Microsoft shares fell $1.42 to $331.
