Software giant Microsoft Corp. (NASDAQ:MSFT) is challenging a decision by the U.S. Internal Revenue Service (IRS) regarding a purported $28.9 billion tax liability.
As reported by Bloomberg, the company declared its disagreement with the proposed adjustments to its federal tax filings on Wednesday, vowing to appeal against the decision.
The tax dispute is centered around the allocation of income and expenses among Microsoft’s global subsidiaries from 2004 to 2013. Microsoft has since altered its corporate structure and practices, rendering the IRS’s claims irrelevant to current operations, according to Daniel Goff, a Microsoft vice president.
In a blog post, Goff stated that Microsoft has engaged with the IRS for nearly ten years to resolve inquiries regarding its tax allocation practices. He further mentioned that the proposed $28.9 billion tax bill does not account for taxes paid under the Tax Cuts and Jobs Act, which could potentially decrease the total by up to $10 billion.
“We strongly believe we have acted in accordance with IRS rules and regulations and that our position is supported by case law," Goff said.
He welcomed the IRS’s conclusion of its audit phase, which will offer an opportunity to address these issues at IRS Appeals, a division of the IRS that resolves tax disputes.
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