26 ms·
Microsoft SEC 8-K: IRS is seeking an additional tax payment of $29B
- hbcondo714 3y agoAuthoritative source at: https://www.sec.gov/Archives/edgar/data/789019/000119312523254151/d530324d8k.htm https://www.sec.gov/Archives/edgar/data/789019/0001193125232...
- deleted 3y ago[deleted]
- spandextwins 3y agoWow. “The IRS says Microsoft owes an additional $28.9 billion in tax for 2004 to 2013, plus penalties and interest.” No wonder why they’re talking about charging for windows 12 features, has to come from somewhere!
- us0r 3y agoThey have over 115 Billion cash on hand.
- notaharvardmba 3y agoBut I bet a lot of that is in long term treasuries which, if you want to use them as legal tender, are kinda down in price right now (if you don't hold them til maturity). And if they need to take a loan to pay it, those bonds are going to be at fairly high rates. Overall, it's gonna be a stock price haircut for sure. I'm guessing at least 10-20% because of all the money they could have MADE with that money.
- DennisP 3y agoLong-term treasuries are generally not considered "cash." Short-term, sure, but t-bills are doing fine.
- ojbyrne 3y agoRandom googling finds “Cash equivalents are any short-term investment securities with maturity periods of 90 days or less.” They have $35 billion in Cash & Cash Equivalents.
- tmpX7dMeXU 3y agoYep. Accounting standards dictate that a cash equivalent should be essentially as liquid as cash from the perspective of the holder. It’s safe to lump it in here.
- swatcoder 3y agoYeah, and if that takes a $30B hit to settle past accounting issues, that’s still $30B no longer poised for an acquisition or on hand to settle some EU action next year. Losing a quarter of your cash reserves for no gain isn’t going to ruin today’s business but it sure will frustrate existing strategies for the future.
- quickthrower2 3y agoYou can acquire with shares though. They or they could raise 30Bn pretty easy.
- itsoktocry 3y ago>that’s still $30B no longer poised for an acquisition They accumulate that much cash because there are no acquisitions to be had in the current economic climate. I can't imagine a $30B+ company that Microsoft could acquire without massive regulatory scrutiny.
- sensanaty 3y agoGood! Hopefully Microsoft burns through as much of their cash paying penalties as possible and dies as a result, as they should've a decade+ ago.
- queuebert 3y agoThey have ~$35 billion in cash per their cash flow statement: https://finance.yahoo.com/quote/MSFT/cash-flow?p=MSFT https://finance.yahoo.com/quote/MSFT/cash-flow?p=MSFT They could in effect write a check today for it.
- deleted 3y ago[deleted]
- deleted 3y ago[deleted]
- lib-dev 3y agoOnly if "penalties and interest" is less than ~2% annually.
- zie 3y agoLOL, like they would ever do that! They will make MS customers pay for it, if they can't convince the IRS to lower the bill significantly, which they probably can.
- justinclift 3y ago"Lets put aside $2B for legal costs, as they should be able halve that or better over the next decade..." ;)
- g232089 3y agoOf course they will make their customers pay for it. That's how companies work: the customers pay for the expenses of the company.
- robertlagrant 3y agoNo, they pay for the value the company provides them. That only bears mild relation to what it cost the company to provide that value.
- wheelerof4te 3y ago
- no_wizard 3y agoThis is before any negotiated settlement, if they are found to have to pay at all, which will be, in all likelihood, substantially lower
- deleted 3y ago[deleted]
- ssss11 3y agoMaybe it could come from those huge executive salaries and bonuses that are many multiples higher than regular employees.
- shiroiuma 3y agoWhy should they do that? They should simply add more annoying advertising and other BS to their products, especially Windows OS. What are customers going to do, go elsewhere or switch to another OS that doesn't have ads?
- robertlagrant 3y agoThat won't cover billions of dollars. Multiples don't matter.
- silverlyra 3y agoAdditional remarks on the Microsoft blog (also included in the 8-K filing): https://blogs.microsoft.com/on-the-issues/2023/10/11/update-irs-audit/ https://blogs.microsoft.com/on-the-issues/2023/10/11/update-... > Today, we’re sharing an update about our ongoing audit with the U.S. Internal Revenue Service (IRS), [… which has been investigating] how we allocated our income and expenses for tax years beginning as far back as 2004. […] The IRS says Microsoft owes an additional $28.9 billion in tax for 2004 to 2013, plus penalties and interest.
- ofslidingfeet 3y ago[flagged]
- deleted 3y ago[deleted]
- satvikpendem 3y agoYank the ladder up? Are you a cryptocurrency / superstonk / Wall Street Bets poster or something? The SEC should be going after scams and cults as well as corporate tax, it's a false dichotomy you're proposing.
- ofslidingfeet 3y agoActually no, but nice try, and I'm sure your extremist uninformed view of what's a "cult" is representative of the SEC's general posture.
- satvikpendem 3y agoThen I'm not sure what you're worried about, if it really isn't a cult as you imply. Either way, I don't understand your position on the matter, are you personally affected by the SEC going after cryptocurrency scams and WSB style stock traders?
- ofslidingfeet 3y agoYeah I think the SEC should work on real things instead of designating people as "cults" for running computer networks they dislike.
- satvikpendem 3y agoWith reference to cults, I was referring to meme stocks like GME, BBBY etc, not cryptocurrency. But just because something fraudulent happens on a computer network does not mean the SEC should not prosecute it. Fraud is still fraud regardless of where it happens.
- bagels 3y agoI know we're not supposed to editorialize the titles, but this one really buries the lede.
- thumbsup-_- 3y agoit's the new form of clickbait. It's so vague that you end up opening in anticipation
- dredmorbius 3y agoSuggested alternatives: "Microsoft on the Issues Blog – An update on our IRS tax audit" Or: Microsoft SEC 8-K: "IRS is seeking an additional tax payment of $28.9 billion" (I've emailed mods to suggest these.)
- dang 3y agoOK, I've put the latter above.
- ofslidingfeet 3y ago[flagged]
- Jtsummers 3y ago> They are now going through and downvoting my entire post history lmao. No one can downvote your entire post history unless all your posts are from the past 24 hours. Downvoting is disabled after the 24-hour mark.
- ofslidingfeet 3y ago[flagged]
- sophacles 3y agoFlagged comments aren't removed. They are hidden unless you check the appropriate box in your settings page.
- lifeisstillgood 3y ago>>> Item 8.01. Other Information On October 11, 2023, Microsoft Corporation announced the receipt of Notices of Proposed Adjustment (“NOPAs”) from the Internal Revenue Service (the “IRS”) for the tax years 2004 to 2013. The NOPAs were received on September 26, 2023. The primary issues in the NOPAs relate to intercompany transfer pricing. In the NOPAs, the IRS is seeking an additional tax payment of $28.9 billion 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 ... So MS income for 2023 was 211 BN, EBIT on that was 88BN. So being asked to give back 28.9BN is a big hit on anyone's scale, but it's "just" 3BN a year (2004-13) on annual profits of ~88BN - so it's not like it's their whole business model. Intra-company transfers are a tricky way to move assets and liability around inside a firm - because it's not "really" selling there can be a lot of creativity. For example Starbucks was accused over many years of having foreign subsidiaries "purchase" coffee beans from Seattle at a price that co-incidentally matched the foreign subsidiaries operating profit - essentially meaning only the seattle firm made a profit and so only they had to pay tax. Something similar is being suggested here. It's not clear what. However it's worth noting that some years ago Biden announced major new funding for IRS to go after big firms. If this is part of that and if this comes to some agreement in a few years it will pay for that whole initiative several times over. Interesting
- very_good_man 3y ago[flagged]
- gigel82 3y agoSo... Amy Hood is out, right? Accountability and all.
- c0pium 3y agoSo in your opinion accountability means firing the person who got the job after the incident happened? Amy Hood became the CFO in 2013.
- DylanDmitri 3y agoIt looks like the problem years were 2004-2013. The problems stop after she’s appointed CFO in 2013.
- gigel82 3y agoFrom the blog post[1]: "It is important to note that the IRS Appeals process will take several years to complete, and if we are unable to come to a direct agreement with the IRS, Microsoft will then have an opportunity to contest any unresolved issues through the courts." [1] https://blogs.microsoft.com/on-the-issues/2023/10/11/update-irs-audit/ https://blogs.microsoft.com/on-the-issues/2023/10/11/update-...
- davisr 3y ago[flagged]
- FireBeyond 3y agoDo Apple next!
- jgalt212 3y agoor first, if you sort in decreasing order of tax evasion / avoidance.
- reactordev 3y agoOr by largest sum owed
- colechristensen 3y agoI'll settle for companies actually paying taxes and getting punished for trying to get away with convoluted loopholes and the tax-free state/country scams.
- deelowe 3y agoSurely there's a better way. This seems... arbitrary.
- freejazz 3y agoWhat makes you think it is arbitrary?
- wredue 3y agoGrabbing dodged taxes from corporations is somewhat arbitrary, in that it doesn’t happen because republicans keep defunding the IRS, which is a major issue because nabbing tax dodging corporations has a massive return on investment. If Microsoft is getting busted, it’s not arbitrary. They just dodged their taxes poorly.
- TheJoeMan 3y ago“Many large multinationals use cost-sharing because it reflects the global nature of their business.” A comparable example might be Apple, where sales of my (american) app being sold from (american) servers somehow curiously involves the Republic of Ireland and their low corporate tax rates…
- Y_Y 3y agoIt's simple enough, an Irish company called Apple licenses its very valuable IP to its entities in cheaper countries so they can do things like manufacturing, server farms, customer support. (It also carries on these some of these functions in Ireland, as it happens, and pays a ton of tax at the relatively high income tax rates there.) It's frankly curious to me when a multinational chooses to base itself anywhere less favourable.
- gemstones 3y agoAt one point, it wasn’t an Irish company. Now technically the American company sold or transferred its IP to the Irish company. But it did so as a fiction, to avoid taxes, and neither I nor a government I help elect are obligated to honor that fiction.
- hattmall 3y agoIt's no less fiction than any other contract or legal document.
- gemstones 3y agoYes it is, because this one negatively affects enough people that the law should make a special case to disallow it. Contracts are enforceable when laws say they are enforceable, but governments are free to change laws. If the government says it is a fiction, it is a fiction.
- deleted 3y ago[deleted]
- chung8123 3y agoGoing back almost 20 years has got to be painful. I doubt half of the people involved are even still at the company.
- sn_master 3y agoMicrosoft has more careerists than most other tech companies. I bet plenty of the key figures are still at the company.
- deleted 3y ago[deleted]
- maartenscholl 3y agoThis spells bad news for "MICROSOFT B.V.", the famous Dutch software company that has reported being responsible for billions of revenue of the Microsoft Corporation over those years.
- FireBeyond 3y agoApple and others are working to explain how the majority of app and hardware sales have a nexus in Ireland. But wait til you hear of Ugland House (https://en.wikipedia.org/wiki/Ugland_House https://en.wikipedia.org/wiki/Ugland_House) in the Caymans - 10,000 sq ft, 5 stories... ... and registered offices of 42,000 companies.
- yieldcrv 3y ago[flagged]
- xctr94 3y agoWhy is it bad that corporations pay taxes? Ignoring your use of sexual language to that effect, I don’t see why companies get to use tax havens to avoid paying for the Common Good that serves everyone (regardless of how much % you think it should be).
- Ylpertnodi 3y ago[flagged]
- yieldcrv 3y agoI didn’t write it was bad, I wrote very specific words. They aren’t the recipient, just like Brazil, or Canada, or any random country isnt. If thats hard for you to understand, thats exactly what I’m trying to point out: it shouldnt be hard to understand. The “Common Good” isnt paid for by taxes, its paid by debt issuance and the taxes and other revenues pay the interest. This means that the things that would be funded already are funded, and no tax collection influences that. Regarding “tax havens”, this is also hubris. A high tax country that doesnt know how to balance its budget has a term for a low tax nation that operates within the confines of its budget. The Cayman Islands has legislated a tax, its just at 0% right now because they dont need the money that way. They found something competitive to raise enough revenues and didnt get involved in other things. Its nobodies problem that this is now impossible for the other country from its poor spending habits. Maybe one day you’ll see your blind spots. What I described is the reality that exists, it is already compliant to operate this way and that’s very unlikely to change. Countries compete on competitiveness for business.
- theogravity 3y agoWonder why the stock hasn't taken a huge hit after the news. $28.9bln sounds like a lot. Maybe investors think MS will find a way to reduce the amount or pull of an extremely long term repayment plan? >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. Maybe it's because they won't face the music for at least a year.
- teraflop 3y agoThe back taxes add up to about 1.2% of Microsoft's current market cap, and it looks like the stock is down roughly 0.6% in after-hours trading. So I guess the market collectively estimates MS will end up owing about half of that amount.
- extraduder_ire 3y agoOr, the number is only slightly higher than investors inspected. I assume this isn't the first news of this issue with the SEC and news like this was already priced-in to the stock.
- deleted 3y ago[deleted]
- bux93 3y agoEven if it is the first news of this particular issue, it doesn't surprise anyone when one of these big corps is hit with a big fine. The announcement of back taxed for the years 2004-2013 at least places an upper bound on those past years. So this means that Microsoft investors now only have to worry about accounting failures over the years 2014-present! Less uncertainty = good news!
- 3y ago
- pylua 3y agoThere should never be a gap this big unless fraud or evasion is involved. If the rules are that vague it needs to change.
- tedunangst 3y agoShould we measure the gap in relative or absolute terms?
- pylua 3y agoI think this is more of a common sense thing. Your question is probably an example of what the Microsoft tax preparers asked.
- OrvalWintermute 3y agoI can understand why an honest mistake, an accounting misinterpretation, or incorrect decision leads to a gap this big - taxes can be complex.
- arthur_sav 3y agoTaxes are complex because they want them to be.
- pylua 3y agoEven honest mistakes can be construed as negligence.
- ds 3y agoIsnt the statute of limitations for collecting taxes 10 years? 2004 is 19 years...
- foobarbazetc 3y agoNot if it’s evasion.
- dgellow 3y agoIs the IRS saying it is evasion? That’s not at all what I read. Any source for that claim?
- kwhitefoot 3y agoI would guess that they won't bother doing that unless they and MS can't come to a satisfactory agreement.
- viraptor 3y agoIt's 3, 6, 10, or many other options depending on the situation. They can be extended in various ways too... https://www.americanbar.org/groups/business_law/resources/business-law-today/2017-august/irs-can-audit-for-three-years/ https://www.americanbar.org/groups/business_law/resources/bu...
- acomjean 3y agoMy dad’s shuttered small business was audited last century. In his case they sent a letter saying you are under an investigation for year x, they clock resets to x years after that and they can bring action anytime. At least that’s the was it was explained to very young me at the time.
- dboreham 3y ago[flagged]
- not_your_vase 3y ago> Not reflected in the proposed adjustments are taxes paid by Microsoft under the Tax Cuts and Jobs Act (TCJA), which could decrease the final tax owed under the audit by up to $10 billion. So even by Microsoft's own admission they owe around $20B (instead of $30B) which they "forgot" to pay. I 100% believe that it was a good faith mistake, and it still is.
- dgellow 3y agoThey aren’t admitting, they are saying that if the proposed adjustment would be agreed upon they would end up paying less than the $30B mentioned.
- throwaway9274 3y agoHere’s what’s going on: -Companies that operate internationally make revenue and incur costs in many different countries. -As a result, they owe taxes to many different national authorities. -Each national authority has rules for how costs and revenues are accounted across borders. -These rules are necessarily complex, because it’s often not clear how costs and asset transfers should be accounted from simple first principles. -This is particularly important when accounting costs across countries, because taxable income is often based on your costs. -For example in the US, Federal taxable income equals gross income MINUS the cost of goods sold. -In a multinational, one critical question in figuring out costs is how to value transfer prices of goods, intangibles, and services among enterprises under common ownership. -That is, if the U.S. division of company A and a division of company A in another country exchange assets or services, the question of how they price those goods to one another becomes important for tax reasons. -Typically there’s a lot of accountants with spreadsheets or a software system where all this is calculated, monitored, invoiced, booked, and reconciled. -Accounting and services for this is typically called “transfer pricing.” -To determine how to account for these costs, each national regulator has very specific rules. -The question is whether Microsoft adhered to these rules in how it accounted for costs and revenues between its U.S. and international entities. -These disputes go through a very long back and forth process that often culminates in litigation, which itself can last years, or settlement. -Microsoft says, “Because our subsidiaries shared in the costs of developing certain intellectual property, under those IRS cost-sharing regulations, the subsidiaries were also entitled to the related profits.” -So it looks like the dispute centers around how to account for “the costs of developing intellectual property”, which can be hard if you’re developing software globally. -Finally, there’s one aspect to consider when you see these $XXB figures. At the size of certain very big corporations like Microsoft or Apple, money does not behave like it does for you, or me, or even Sequoia Capital. -Microsoft’s market cap is $2.4T. At that scale, money enters a kind of different state of matter. -Money’s purpose is primarily to coordinate economic activity, especially when you’re talking about non-negligible amounts for multinationals. -So payments among the revenue agencies of various countries and their very large private multinationals are in kind of a closed loop where they mainly have complex macroeconomic effects. -For example, the effect of increasing taxes via heightened transfer pricing scrutiny mostly moves production from one sector to another (e.g. from consumer tech to health and defense.) -The policy and finance folks pulling the levers understand how that works, and often have their own complex set of motives.
- test77777 3y agoWhen was the last time a major corporation went bankrupt for failing to pay its taxes?
- Crosseye_Jack 3y agoWell even if MS are found to be liable for this tax bill, MS has in the region of $100 billion "Cash on hand" so I doubt that they will go bankrupt over this.
- smorrebrod 3y agoThis sounds to me like an gigantic amount of money. I looked it up and apparently it was $136B in 2019¹ and $111B today². And Microsoft, although it is the company with the most cash on hand, is not an outlier here with Alphabet at $121B and Apple at $100B². I really don't know why they do this though. [1] https://www.cnbc.com/2019/11/07/microsoft-apple-and-alphabet-are-sitting-on-more-than-100-billion-in-cash.html https://www.cnbc.com/2019/11/07/microsoft-apple-and-alphabet... [2] https://www.macrotrends.net/stocks/charts/MSFT/microsoft/cash-on-hand https://www.macrotrends.net/stocks/charts/MSFT/microsoft/cas...
- kllrnohj 3y ago> I really don't know why they do this though. Because you're looking at absolute numbers and not percentages/relative values. That much cash on hand sounds absurd when you're only looking at the absolute number of it, but the amount it represents is "just" 6 months of revenue. And any good financial advisor will tell you it's a good idea to keep 6 months of earnings as savings.
- nerdkid93 3y agoA good financial advisor will recommend keeping 3-6 months of non-negotiable expenses saved, not revenue. 6 months of revenue would be a quite significant amount of savings for most people.
- 3y ago
- jacquesm 3y agoMaybe they can sell Github to a company that is more aligned with long term FOSS interests?
- pavlov 3y agoThe infraction happened in 2004-2013. So that would be over three billion dollars per year. Microsoft’s operating income in fiscal year 2005 was about $15B and in 2013 almost $27B. So you can kind see where the IRS is getting this number: if they believe that Microsoft evaded tax worth about 10-15% of its earnings before taxes, that’s how it would add up to this whopping sum. It seems like Microsoft believes they can settle for something much lower. The stock price doesn’t seem to be hurting pre-market at all.
- londons_explore 3y ago> The stock price doesn’t seem to be hurting pre-market at all. Big investors will have eyes and ears inside the IRS, so will have known for years about this already.
- willcipriano 3y agoI think a lot of the market is people pointing at other people as if they had done the due diligence that they couldn't be bothered with, and those people pointing back.
- brianwawok 3y agoThat’s why a scam startup is able to rocket as soon as 1 named investor signs on. See the juice squeezing bag company etc.
- kylebenzle 3y agoHey Juicearoo was a great product! It solved the problem of me having a bag of juice and needing to get the juice out.
- benreesman 3y agoI’m this close to having this printed and framed, but I can’t find framearoo.com.
- gadders 3y agoThe citizens of Ukraine and Israel will be very grateful.
- wheelerof4te 3y agoGood humor is black humor.
- andrewstuart 3y agoYea hello it’s Mr Smith here from the tax department. I’ve just been reviewing your file and it seems that you are a little short in your tax payments by…… let’s seeeee ……. ummmm …… yes, $29,000,000,000. Can you pay it now please?
- toyg 3y ago"We take credit cards. Now now, Mr. Nardella, no need to get... You say we should ask Mr. Ballmer instead? I'm afraid it doesn't really... Yes, credit cards, cheques, bank transfers. My son does everything with his app, these days, maybe you have one...? I see. So when should I call back? Never, you say? Oh."
- gorlilla 3y agoCan I pay in v-bucks and cheetohs?
- HeckFeck 3y ago"We can send over any amount of Microsoft Points you desire, probably worth more than when we discontinued them in 2013, we'll even throw in a Game Pass for everyone! How's that?"
- user3939382 3y agohttps://i.imgur.com/1C1Ic5n.jpg https://i.imgur.com/1C1Ic5n.jpg
- 3y ago
- vb-8448 3y agoIt's the sixth identical post today :D https://hn.algolia.com/?dateRange=last24h&page=0&prefix=true&query=IRS&sort=byPopularity&type=story https://hn.algolia.com/?dateRange=last24h&page=0&prefix=true...
- pluc 3y agoMaybe there'll be one that I can look at without having to enable JavaScript and Cookies.
- internetter 3y agoThe primary source works fine https://microsoft.gcs-web.com/node/31951/html https://microsoft.gcs-web.com/node/31951/html
- uxp8u61q 3y agoNo message about how greedy Europe wants to steal money from big tech, yada yada yada. Oh, it's the USA this time? Wait, does this mean that these big tech were really not paying their fair share and the USA was just slow to get caught to it? I guess so.
- iagooar 3y agoWhat is a "fair share" in your opinion?
- badwolf 3y agoAt this moment, I'd estimate a fair share being approximately $29 billion.
- deleted 3y ago[deleted]
- personomas 3y agoNo it doesn't. What it definitely could mean with democrats in power is the USA becoming just as insane as Europe thinking the big corporations are the "bad guys" and we have to "drill" them. It's a Western problem, not a Europe problem. It's more so in Europe but this contagion that big corporations are evil and governments are good is growing more and more in the US too.
- pb7 3y agoIt's an American company that owes American taxes. What does this have to do with Europe fining American tech companies because it can't compete?
- darklycan51 3y agoMicrosoft won't pay or at least not this amount, they are basically an arm of the US government at this point
- kbelder 3y agoNo, the equivalent would be America loading fines and tax penalties onto a large EU tech company, like... Um...
- chipgap98 3y agoThat's going to be one hell of a payment plan
- imchillyb 3y agoHow many Game Pass subs will it take to pay the IRS? Are there enough gamers on the planet for this? How much is the sub for Windows 12 going to cost us now, and will that be enough to pay the IRS-piper?
- ciabattabread 3y agoIs this an issue unique to Microsoft, or did other similar companies receive the same type of notice?
- RugnirViking 3y agowow. they stole almost a hundred dollars worth of taxes from every american man, woman, and child. $87 by my calculation, that will be up well over 100 dollars accounting for inflation. Depending on how long they drag it out for in the courts maybe even 200
- charles_f 3y agoIronically, some IRS accountant must have some msft-back-taxes_v3_new_newer_final.xlsx file on their computer.
- gnu8 3y agoIf it was that simple then Microsoft should have known it was coming and maybe even changed the numbers in the document.
- thurn 3y agoTransfer pricing is sort of just a pile of black magic. Microsoft's American business is required to charge their European subsidiary some "fair market price" for the Windows intellectual property, but what is a fair price for a license to sell Windows on the European continent? Unlike with fungible goods, there is no established market for this product that the IRS can easily refer to. In this case Microsoft is saying that some amount of their IP was developed by their overseas subsidiary and thus doesn't need to be included in the transfer pricing calculation, so in their process of making up imaginary amounts of money to charge themselves for their own products they also need to deduct that. If e.g. most of the Windows networking stack was created in Germany they need to figure out what percentage of the value of the overall Windows IP is added by the ability to connect to the internet. Understandably, it's possible for reasonable observers to disagree on the values chosen here, this is not a case of black and white corporate misconduct (tax issues essentially never are).
- talent_deprived 3y ago[flagged]
- coldpie 3y agoI know you're trolling, but for any other readers who are curious, this is happening now because of increased funding at the IRS from the IRA that was passed in 2022, with part of the funding directed to performing audits on the highest earners. Prior to the IRA, the IRS didn't have the funds to fight Microsoft's lawyers on this issue. Now, they do. > The effort, building off work following last August's IRA funding, will center on adding more attention on wealthy, partnerships and other high earners that have seen sharp drops in audit rates for these taxpayer segments during the past decade. > "The years of underfunding that predated the Inflation Reduction Act led to the lowest audit rate of wealthy filers in our history," said IRS Commissioner Danny Werfel. https://www.irs.gov/newsroom/irs-announces-sweeping-effort-to-restore-fairness-to-tax-system-with-inflation-reduction-act-funding-new-compliance-efforts https://www.irs.gov/newsroom/irs-announces-sweeping-effort-t...
- deleted 3y ago[deleted]
- dbg31415 3y agoIt feels like if we just made these big companies pay what they should in taxes we'd be able to take some big steps towards health care, better schools, improving our crumbling infrastructure...
- piuantiderp 3y agoNah, most problems are on the spending side, collection is fairly good...
- mrguyorama 3y agoActually, according to the IRS themselves in their yearly report to congress, they yet again have not been given the resources to go after big companies or rich individuals who are clearly skirting tax laws (and which will inevitably cause a serious court case because fuck you for trying to collect taxes from anyone with a lawyer) so they are basically relegated to sending mean letters to average and poor people for a few hundred dollars here and there, and they STILL collect more money than they are given in funding. The IRS has been begging for the resources to go after big baddies for decades, but the Feds have been gun-shy at going after any large company since Enron.
- colonCapitalDee 3y agoI disagree. Corporate taxes are a drag on the economy, and maximizing economic performance is probably the single most effective thing we can do to improve quality of life for everyone long term. As an example, here's self-reported life satisfaction vs GDP per capita: https://substackcdn.com/image/fetch/f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb5946061-9715-449c-b70e-688d11e1931a_3400x2400.png https://substackcdn.com/image/fetch/f_auto,q_auto:good,fl_pr.... Similar graphs exist for life expectancy, years of education, calorie consumption, literacy rates, and so on. If we want to increase government revenues we should focus on efficient taxes that minimize economic disruption.
- dbg31415 3y ago
- balls187 3y agoBalmer got out when the getting was good.
- carapace 3y ago> Microsoft had shifted at least $39 billion in U.S. profits to Puerto Rico, where the company’s tax consultants, KPMG, had persuaded the territory’s government to give Microsoft a tax rate of nearly 0%. Microsoft had justified this transfer with a ludicrous-sounding deal: It had sold its most valuable possession — its intellectual property — to an 85-person factory it owned in a small Puerto Rican city. (2020) https://www.propublica.org/article/the-irs-decided-to-get-tough-against-microsoft-microsoft-got-tougher https://www.propublica.org/article/the-irs-decided-to-get-to...
- tim333 3y agoThe time has probably come for better global tax rules for multinational companies. It's tricky because you need multiple governments to agree but even so.
- pizzafeelsright 3y agoI'm in California. For the first time in 25 years, my taxes were recalculated. I'm told I owe low five figures from three of the last ten years. California has no limit on how far they can go back. I file taxes with common software. No crazy deductions and mostly W2. I made someone mad or "they" are feeling the capital flight and looking to fill the treasury.
- gamblor956 3y agoCalifornia has no limit on how far they can go back. California has 4 years from the date you filed your return to issue an assessment. The only exceptions are for substantially underreported liability, which is considered fraud, or where a tax return was not filed. In such cases the statute of limitations is indefinite. The part where you say "mostly W2" indicates that you had a number of non-W2 sources of income, which is probably where the underreporting arose. (A lot of people fail to properly report 1099 income. A lot of crypto traders fail to properly report crypto sales.)