Microsoft says IRS seeks added tax payment of $28.9B plus penalties, interest

In a regulatory filing, Microsoft disclosed that on October 11, Microsoft Corporation announced the receipt of Notices of Proposed Adjustment, or “NOPAs,” from the Internal Revenue Service for the tax years 2004 to 2013. The NOPAs were received on September 26, the company noted. The primary issues in the NOPAs relate to intercompany transfer pricing. In the NOPAs, the IRS is seeking an additional tax payment of $28.9B 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,” Microsoft stated.