IRS: Microsoft Owes $29 Billion in Back Taxes

IRS: Microsoft Owes $29 Billion in Back Taxes

There are only two certainties. Death and Taxes.

Microsoft reported the IRS slapped the company with a $29 billion bill for back taxes. The US Internal Revenue Service came up with the figure based upon the tax havens and shelters the company uses to hide profits from Uncle Sam.

The bill encompasses tax years between 2004 and 2013 when he company was moving billions of dollars in profits to offshore countries and municipalities. Microsoft moved lots of profits to Puerto Rico which is still a US territory but taxes a lower corporate rate.

Decades of Tax Work

Global corporations use a number of mechanisms to avoid paying taxes. Microsoft has been working with the IRS for a decade to work through arcane processes to hide its profits. The company reported that the figure doesn’t include taxes avoided under the 2017 Tax Cuts and Jobs Act which could reduce the bill by $10 billion.

The tax hit didn’t affect Microsoft on Wall Street. Microsoft’s stock closed the day at $332 per share. The news barely affected the company’s market cap of $2.4 trillion. The company has $111.6 billion of cash on hand. If it needed to, they could pay the bill.