“That’s a nice little business you got there, it would be a pity if the IRS confiscated it…”
In an 8K filed by Microsoft after the close, the company said it received notices from IRS seeking additional payment of $28.9b plus penalties and interest for the tax years 2004-2013; the payments stem from disagreements over the tax treatment of intercompany transfer pricing, a well-known corporate tax black hole.
It was not immediately clear if these notices suggested the company had underpaid taxes on purpose or if there was a TurboTax-style glitch, but whatever the reason, $29 billion is a lot of money, even for Epstein island regulars such as Bill Gates.
Naturally, Microsoft said that it disagrees with the notices and will vigorously contest them, and “does not expect” a final resolution on these issues in the next 12 months.
On October 11, 2023, Microsoft Corporation announced the receipt of Notices of Proposed Adjustment (“NOPAs”) from the Internal Revenue Service (the “IRS”) for the tax years 2004 to 2013. The NOPAs were received on September 26, 2023. The primary issues in the NOPAs relate to intercompany transfer pricing. In the NOPAs, the IRS is seeking an additional tax payment of $28.9 billion plus penalties and interest.
As of September 30, 2023, we believe our allowances for income tax contingencies are adequate. We disagree with the proposed adjustments and will vigorously contest the NOPAs through the IRS’s administrative appeals office and, if necessary, judicial proceedings. We do not expect a final resolution of these issues in the next 12 months. Based on the information currently available, we do not anticipate a significant increase or decrease to our tax contingencies for these issues within the next 12 months.
If the US tax service, now staffed with tens of thousands of newly weaponized (literally ) tax collectors is starting to go after the the Magnificent 7’s massive cash hoards to plug the staggering, war-like debt-funded US deficit, Microsoft may be the first but it certainly won’t be the last to get such a ransom demand from the IRS.