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IRS fights Ballmer and other former Microsoft execs over testimony in corporate tax probe

The Inner Income Service is petitioning a federal courtroom to compel a who’s who of former Microsoft executives — together with longtime CEO Steve Ballmer and former Home windows chief Jim Allchin — to testify as a part of an IRS audit of transactions between Microsoft and its worldwide subsidiaries.

Petitions filed by the IRS in U.S. District Courtroom in Seattle say the executives haven’t complied with summonses in search of their testimony in the audit. Based on one court filing, the IRS is inspecting how Microsoft accounted for monetary transactions with its subsidiaries in Puerto Rico and Bermuda.

“Non-arm’s size costs can be utilized to shift earnings, and thus the incidence of tax, to tax-favored jurisdictions,” the company explains in one among its filings, noting that the worth the corporate positioned on the transactions had “billions of {dollars} of influence on Microsoft’s taxable earnings in 2004, 2005, and 2006.”

The Seattle Instances reported on the petitions overnight, and GeekWire confirmed the main points in courtroom filings.

In a press release emailed to GeekWire, the corporate mentioned, “We’re reviewing the petition and associated filings, however don’t touch upon pending audits.  As a world enterprise, Microsoft adheres fastidiously to the legal guidelines and rules of each nation in which we function.”

Along with Ballmer and Allchin — who led the event of Home windows XP and Home windows Vista — the IRS is in search of to interview former Microsoft executives together with:

Based on one filing, the IRS issued a summons to Ballmer at his Seattle dwelling demanding that he testify on Dec. 8, however he failed to seem. Microsoft told the IRS in advance that it was declining to make Ballmer and other former executives out there, citing a disagreement with the IRS over the procedures for the interviews.

That is a part of a broader dispute between Microsoft and the IRS that additionally contains a suit by Microsoft against the agency over the corporate’s Freedom of Data Act request for particulars on an IRS contract with a regulation agency retained in the case.

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