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Microsoft SEC 8-K: IRS is seeking an additional tax payment of $29B

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Re: Microsoft SEC 8-K: IRS is seeking an additional tax payment of $29B

#151

Post by londons_explore »

pavlov wrote: post #149

The 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…

> 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.

Re: Microsoft SEC 8-K: IRS is seeking an additional tax payment of $29B

#152

Post by kwhitefoot »

dgellow wrote: post #130
foobarbazetc wrote: post #90

Earlier quoted context omitted.

Not if it’s evasion.

Is the IRS saying it is evasion? That’s not at all what I read. Any source for that claim?

I would guess that they won't bother doing that unless they and MS can't come to a satisfactory agreement.

Re: Microsoft SEC 8-K: IRS is seeking an additional tax payment of $29B

#153

Post by acomjean »

ds wrote: post #72

Isnt the statute of limitations for collecting taxes 10 years? 2004 is 19 years...

My 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.

Re: Microsoft SEC 8-K: IRS is seeking an additional tax payment of $29B

#154

Post by bsenftner »

londons_explore wrote: post #151
pavlov wrote: post #149

The 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…

> 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.

At what point does information such as this become "insider information" and illegal to share? These "eyes and ears" need to have their taxes audited...

Re: Microsoft SEC 8-K: IRS is seeking an additional tax payment of $29B

#156

Post by mensetmanusman »

bsenftner wrote: post #154
londons_explore wrote: post #151

Earlier quoted context omitted.

> 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.

At what point does information such as this become "insider information" and illegal to share? These "eyes and ears" need to have their taxes audited...

Information always leaks out, especially with the way every government document is immediately analyzed and parsed by the big players.

The public record is quite public.

Re: Microsoft SEC 8-K: IRS is seeking an additional tax payment of $29B

#157

Post by wheelerof4te »

zie wrote: post #37
queuebert wrote: post #8

Earlier quoted context omitted.

They have ~$35 billion in cash per their cash flow statement: https://finance.yahoo.com/quote/MSFT/cash-flow?p=MSFT They could in effect write a check today for it.

LOL, 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.

"if they can't convince the IRS to lower the bill significantly"

Why would IRS agree to this? Would the IRS agree to lower your taxes if you pretty-pleased them?

Microsoft should not be an exception.

Re: Microsoft SEC 8-K: IRS is seeking an additional tax payment of $29B

#158

Post by thfuran »

londons_explore wrote: post #129
thfuran wrote: post #114

Earlier quoted context omitted.

I'd rather see the US declare that the IP is no longer promoting the progress of science and the useful arts and annul it.

I would like to see an experiment where a country disallowed any company from keeping any secrets at all - IP or otherwise. Everything on all the companies computers and hard drives would always be visible to competitors and the public. While it discourages long research projects, it really incentivises fast execution and building on other companies designs.

I think companies overvalue secrecy to the point that most that are able would immediately leave. And I don't think most any industry has such a problem with willingness to execute quickly that trying to incentivize that is worth totally crushing R&D. Hell, I think the world could do with a bit more research and a bit less moving fast and breaking things.

Re: Microsoft SEC 8-K: IRS is seeking an additional tax payment of $29B

#160

Post by oldbbsnickname »

nodamage wrote: post #111
TheJoeMan wrote: post #39

“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…

This is a common misconception but not actually true. If Apple sells a copy of your app to an American customer the revenue from their royalty is booked to Apple Inc. (the U.S. company) and they would pay U.S. income tax on that sale. The only time the sale would be booked to their Irish subsidiary is if the customer was located in Europe, or it would go to one of their other international subsidiaries depending on t…

Legal BEPS exist and is more complicated than this oversimplification. While Apple didn't do Stanley Works "moving" to Bermuda, Tim Cook is no slouch in the financial domain as that was (and is) his wheelhouse. The calculus involves a myriad of factors including a risk appetite, leadership ethics, lots of data, and decision support. As an aside, I once parted ways with 2 potential business partners because they were on the privately-admitted illegal side of BEPS and tax minimization in speech and action. (Last I heard, they're lobbyists for political interests based in another country.)

Also, the books for taxes and the books for securities regulators aren't precisely equivalent per jurisdiction based on how things are counted or not counted. For example, in general, Norwegian and US accounting practices tended to be/are vastly different in some areas... hence a need for local external auditors.

Corporate Inversions: Stanley Works and the Lure of Tax Havens (2002) https://www.hbs.edu/faculty/Pages/item.aspx?num=29288

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