MSFT · 10-Q · 2026Q3 · Full report
Tax Audit Contingency (IRS NOPAs)
MICROSOFT CORP · 2026-10-28 · Importance 50 · Surprise 24 · Matches filing data
Microsoft remains under IRS audit for tax years 2014–2017 and received Notices of Proposed Adjustment on September 26, 2023, concerning tax years 2004–2013. The IRS seeks an additional $28.9 billion, plus penalties and interest, primarily related to intercompany transfer pricing. As of September 30, 2026, Microsoft considered its tax-contingency allowances adequate and said it would contest the proposed adjustments through IRS administrative appeals and, if necessary, judicial proceedings.
Key facts
- On September 26, 2023, Microsoft received IRS NOPAs for tax years 2004 to 2013, primarily concerning intercompany transfer pricing; the IRS seeks $28.9 billion in additional tax plus penalties and interest. source
- As of September 30, 2026, Microsoft believed its income tax contingency allowances were adequate and disagreed with the IRS NOPAs, which it planned to contest through administrative appeals and, if necessary, judicial proceedings. source
Impact estimates
| metric | direction | stage | expected | basis |
|---|---|---|---|---|
| liability | negative | contingent | -0.3% | On September 26, 2023, Microsoft received IRS NOPAs for tax years 2004 to 2013, primarily concerning intercompany transfer pricing; the… |