Microsoft said in an 8-K filing on Wednesday that it received Notices of Proposed Adjustment from the Internal Revenue Service (Internal Revenue Service) requiring it to pay $28.9 billion in additional taxes.
Microsoft said the dispute involves the distribution of the company's profits among different countries and jurisdictions between 2004 and 2013. Microsoft said as much as $10 billion in taxes it has already paid are not reflected in the IRS's proposed changes.
Microsoft plans to challenge these notices through administrative appeals with the IRS and is willing to pursue judicial proceedings if necessary.
"Microsoft disagrees with these proposed adjustments and will appeal them within the IRS, a process that is expected to take several years," Microsoft said in the filing. "We believe we have been in compliance with IRS regulations and paid the taxes we owe in the United States and around the world."
Microsoft said that as of September 30, 2023, the company believed that its provision for income tax contingencies was adequate.