Corporate tax evasion has become a much more prominent piece of the discussion as Americans have struggled under high inflation, rising energy and home prices.
At least 55 of the largest corporations in the U.S. paid no federal corporate income taxes during their fiscal 2020 year, according to the Institute on Taxation and Economic Policy, thanks to the tax breaks that were preserved or expanded by the Tax Cuts and Jobs Act that Donald Trump signed in 2017 and the CARES Act that his successor signed in 2020.
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These weren't small companies either. Nike (NKE) -), for example, "didn't pay a dime of federal income tax," in 2020, according to the ITEP, despite recording almost $2.9 billion in pretax income that fiscal year. Not only did it not pay any federal income taxes, the shoe and apparel company also received a rebate of $230 million.
This week, Microsoft let the Internal Revenue Service, and the world, know that it didn't fall into that type of category.
Microsoft revealed that it has paid over $67 billion in taxes to the U.S. since 2004. But the company also denies IRS claims that it owes an additional $28.9 billion from the period between 2004 and 2013 in taxes, penalties and interest after an audit.
The company claims that taxes it paid under the 2017 TCJA rules could decrease its final tax owed under the audit by up to $10 billion.
"Microsoft disagrees with these proposed adjustments and will pursue an appeal within the IRS, a process expected to take several years," Daniel Goff, the company's corporate tax VP, said. "The main disagreement is the way Microsoft allocated profits during this time period among countries and jurisdictions."
"We strongly believe we have acted in accordance with IRS rules and regulations and that our position is supported by case law. We welcome the IRS’s conclusion of its audit phase which will provide us with the opportunity to work through these issues."
The IRS did not immediately return a request for comment.
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