The IRS refuses to provide information on an ongoing investigation over Microsoft, so the company filed legal complaint

Nov 25, 2014 13:35 GMT  ·  By

Microsoft is suing the United States Internal Revenue Service for not disclosing details of a private investigation that's believed to involve the Redmond-based software giant and some of its tax practices in the country.

The software giant says in a lawsuit filed with the US district Court of the District of Columbia that it has already contacted the IRS and requested information on the ongoing investigation through a Freedom of Information Act (FOIA), but the agency has until now refused to respond.

Microsoft has found that the IRS has a collaboration with law firm Quinn Emanuel Urquhart & Sullivan that was signed in May 2014 and worth more than 2 million dollars (1.8 million euros).

It appears that Quinn Emanuel Urquhart & Sullivan was appointed specifically for the investigation of Microsoft, but no documents have yet been disclosed despite Redmond's requests.

Microsoft under investigation for tax dodging

Microsoft has until now been involved in several tax dodging investigations in the United States and several other countries across the world, and it appears that the IRS is now specifically looking into this matter.

The software giant first requested the IRS to disclose information on its investigation in September, but since then, the agency asked for an extension to the legal deadline of 20 days to provide an answer.

Microsoft obviously claims that the IRS doesn't want to provide an explanation for the investigation, so the company has moved the dispute to court to get an answer from the organization.

“Plaintiff seeks to compel the disclosure of a complete government contract and related records that were unlawfully withheld by the Internal Revenue Service (‘Defendant’ or ‘IRS’) arising from its engagement of the law firm Quinn Emanuel Urquhart & Sullivan, LLP, its partners, and/or its employees (collectively, ‘Quinn Emanue’) to assist the IRS in preparing, organizing, and presenting the factual record and legal analysis in connection with Defendant's transfer pricing audits of Microsoft,” it says.

This wouldn't be the first time Microsoft is accused of tax dodging, but the company has always stated that it fully complies with the United States legislation and doesn't turn to tax avoidance schemes in order to minimize expenses and boost profits.

The same happened in other countries across the globe, especially in Europe, where Microsoft had to deal with investigators in market such as Denmark and Luxembourg, after being accused of using loopholes in local legislation in order to avoid paying millions of dollars in taxes.

Microsoft legal issues (5 Images)

Microsoft says it fully complies with local laws
The IRS hasn't yet commented on the caseMicrosoft submited an FOIA to the IRS
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