As it’s acquisition if Activision Blizzard draws to likely close, Microsoft is now facing another long problem. The tech giant reportedly owes the IRS around $29 Billion in taxes, according to the companies 8-K filing on Wednesday.
According to the filing, Microsoft received a Notices of Proposed Adjustment (NOPA) in September detailing concerns of the Internal Revenue Service (IRS) for their 2004 to 2013 tax years.
The NOPAs claims that Microsoft had issues with intercompany transfer pricing or profits made within countries and jurisdictions. The IRS are now seeking an “additional tax payment of $28.9 billion plus penalties and interest.” Unsurprisingly, Microsoft has disputed the NOPAs claims.
“For nearly a decade, as we have previously disclosed in our financial statements, Microsoft has been working with the IRS to address questions about how we allocated our income and expenses for tax years beginning as far back as 2004,” said Microsoft. “We have changed our corporate structure and practices since the years covered by the audit, and as a result, the issues raised by the IRS are relevant to the past but not to our current practices.”
“…Microsoft disagrees with these proposed adjustments and will pursue an appeal within the IRS, a process expected to take several years,” the company said in its filing. “We believe we have always followed the IRS’s rules and paid the taxes we owe in the U.S. and around the world,” they continued.
Now, Microsoft will work with the IRS to hopefully come to a “mutual resolution.” However, considering that the IRS Appeals process takes up to several years to complete, it will be a while before it reaches any conclusion, excluding whatever future complications that might arise.