Microsoft has said it will appeal the US Internal Revenue Service decision that it must pay an additional $28.9 billion in back taxes for the years 2004 to 2013, according to a securities filing released on Wednesday.
The IRS released its demand following a multi-year long audit of the computer giant’s past accounting practices. In the filing, Microsoft said that the agency had taken issue with the company’s accounting methods, specifically how it “allocated profits … among countries and jurisdictions.”
The company wrote, “The IRS says Microsoft owes an additional $28.9 billion in tax for 2004 to 2013, plus penalties and interest,” adding that the finding was not a final decision, and it did not take into account $10 billion the company paid under the 2017 Tax Cuts and Jobs Act which would reduce its final amount due.
The company also said it would appeal the decision, which would take several years to complete.
The company went on, “We believe we have always followed the IRS’s rules and paid the taxes we owe in the U.S. and around the world. Since 2004, we have paid over $67 billion in taxes to the U.S.”
The company said that as it is preparing its appeal, and to proceed through the IRS appeals process, and possibly the US court system, the company feels that its “allowances for income tax contingencies are adequate.”