Microsoft to appeal IRS request for nearly $29 billion in back taxes
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Microsoft plans to contest a US Internal Revenue Service request for an additional $28.9 billion in back taxes for the years 2004 to 2013, the company said in a securities filing Wednesday.

The IRS audited Microsoft’s past accounting practices for years before making the demand. The agency was particularly critical of how Microsoft allocated profits between countries and jurisdictions, Microsoft said.

The IRS says Microsoft owes $28.9 billion in taxes from 2004 to 2013, plus penalties and interest. Microsoft’s final bill may be reduced by up to $10 billion in taxes it paid under the 2017 Tax Cuts and Jobs Act that have not been included in the IRS’s determination.

Several years may pass before the company decides whether to appeal the IRS request.

“We believe that we have always followed the IRS’s rules and paid all our taxes in the U.S. and around the world,” the company said in the filing. Over $67 billion in taxes have been paid to the United States since 2004.”

Microsoft stated that it believes its current “allowances for income tax contingencies are adequate” as it prepares to work through the IRS Appeals Process and, possibly, the courts.