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Microsoft Set to Pay $28.9 Billion in Back Taxes to the IRS

Microsoft intends to contest the prodigious sum of money it is obligated to pay.

By Newsd
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Microsoft Set to Pay $28.9 Billion in Back Taxes: Deducting penalties and interest, Microsoft owes the IRS an astounding $28.9 billion in delinquent taxes. This amount places Microsoft in serious trouble with the IRS. However, this is not an ordinary tale of tax evasion; it spans nearly a decade. Microsoft’s utilization of “transfer pricing,” a prevalent yet contentious strategy employed by multinational enterprises to distribute profits and expenses among various regional subsidiaries, has come under scrutiny by the IRS.

Microsoft intends to contest the prodigious sum of money it is obligated to pay.

Pricing transfers is not inherently dubious. Microsoft argues that this merely “reflects the global nature of their business,” which permits subsidiaries to share the profits and expenses associated with developing intellectual property. But critics assert that the technique is frequently employed to manipulate the system. In nations with high tax rates, corporations can declare lower profits, consequently reducing their tax liability. A decade-long investigation by the IRS determined that Microsoft, the technology behemoth, is in default of paying a substantial amount in back taxes, specifically from 2004 to 2013.

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Microsoft Set to Pay $28.9 Billion in Back Taxes to the IRS

On the contrary, Microsoft is not treating this matter lightly. To begin with, it challenges the $28.9 billion figure, contending that substantial reductions of $10 billion could be achieved through recent modifications in tax legislation. Additionally, the organization emphasized that its business practices have undergone significant changes over the years in question, suggesting that the matter is essentially obsolete at this time.

But until it’s over, it’s not quite over. Microsoft has unambiguously stated that it will contest the IRS decision through all feasible means, including legal action. The IRS appeal by the company may require years to complete; if that fails to resolve the issues, the courts will be the next arena of conflict.

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