MSFT · 10-Q · 2026Q3 · Full report
Tax Audit Contingency
MICROSOFT CORP · 2026-10-28 · Importance 52 · Surprise 42
The IRS is auditing Microsoft for tax years 2014 to 2017 and issued Notices of Proposed Adjustment for tax years 2004 to 2013. The IRS is seeking an additional $28.9 billion, plus penalties and interest, with the primary disputed issues involving intercompany transfer pricing. As of September 30, 2026, Microsoft said its income tax contingency allowances were adequate and that it would contest the proposed adjustments through administrative appeals and, if necessary, judicial proceedings.