Microsoft has published a new Form 8-K on its website, revealing that it has received NOPAs (Notices of Proposed Adjustment) from the IRS that claim the company owes a tax payment of $28.9 billion for tax years 2004 to 2013—including penalties and interest. The Xbox and Windows maker, which happens to have a market capitalization of 2.47 trillion, says that it plans to “vigorously” challenge the NOPAs, claiming that it has already paid a big portion of those taxes that weren’t reflected in the IRS’ audit. Microsoft noted that it has paid over $67 billion in taxes to the U.S. since 2004.
The IRS says Microsoft owes an additional $28.9 billion in tax for 2004 to 2013, plus penalties and interest. The IRS’s proposed adjustments do not represent a final determination. Not reflected in the proposed adjustments are taxes paid by Microsoft under the Tax Cuts and Jobs Act (TCJA), which could decrease the final tax owed under the audit by up to $10 billion.
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. Microsoft historically has been one of the top U.S. corporate income taxpayers. Since 2004, we have paid over $67 billion in taxes to the U.S.