The IRS says Microsoft owes an additional $29 billion in back taxes

Microsoft said the IRS notified the company that it owes an additional $28.9 billion in back taxes.
The company disagrees with these claims and says it will challenge them in court if necessary.
Microsoft will be subject to an administrative appeal by the IRS, which could take years.

Microsoft CEO Satya Nadella arrives at federal court in Washington, D.C. on October 2, 2023.

Drew Angerer | Getty Images

Microsoft said it received notices of a proposed adjustment from the Internal Revenue Service to pay an additional $28.9 billion tax. 8-K filing Wednesday.

Microsoft said the dispute concerns the company’s profits allocated between countries and jurisdictions between 2004 and 2013. She said up to $10 billion in taxes the company has already paid are not reflected in the proposed adjustments made by the IRS.

Microsoft plans to contest the notices through IRS administrative appeals, and is prepared to go to court proceedings, if necessary.

“Microsoft does not agree with these proposed amendments and will continue to 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 rules and paid the taxes we owe in the United States and around the world.”

Microsoft said that as of September 30, 2023, it believes its provision for income tax contingencies is adequate.