Taxcast: The People vs Microsoft

The Internal Revenue Service, the US’s main tax authority, was underfunded for years when it first set its sight on Microsoft – and the lack of resources made it difficult to crack down on corporate tax avoidance.

But after receiving more funding, the IRS started building and taking on cases against big corporations more and more aggressively. It started investigating Microsoft in 2007, and found that for years, the company had moved billions to Puerto Rico to allegedly avoid paying tens of billions of dollars of taxes.

When the IRS pushed Microsoft to pay, the corporation got tough and aggressively fought back in court and lobbied Congress to change.

 

“The only ones who benefit here are the big four tax advisors – in this case, tax advisors at KPMG,” Zorka Milin of the Financial Accountability and Corporate Transparency Coalition says on the podcast. “All of that was very lucrative for them. The downside was suffered by everyone else.”

In this episode of the Taxcast, the monthly podcast of the Tax Justice Network, host Naomi Fowler tells the story of what happened when the US tax authorities, the IRS, decided to crack down on Microsoft. It is a story that offers lessons for governments worldwide about the importance of more transparency in corporate tax filings, and one worthy of a thriller movie with plenty of twists and turns. It isn’t over yet.

The episode’s guests include:

A transcript of the show is available at this link. Please note that some of it is automated.

The Taxcast is a monthly podcast from the Tax Justice Network.