“Microsoft owes the Internal Revenue Service (IRS) $28.9 billion in back taxes, not including penalties and interest, at least according to the tax authority.”
The IRS spent nearly a decade auditing how Microsoft shifted profits between jurisdictions from 2004 to 2013. The tool was transfer pricing, where subsidiaries “share” development costs and so claim the profits. Microsoft says it changed its structure since, and that newer tax laws could knock $10 billion off the bill. It will appeal inside the IRS, which takes years. Ordinary taxpayers do not get a decade to argue about where their income lives.