Bonum Certa Men Certa

IRS Reveals That Microsoft Effectively Stole Tens of Billions of Dollars of Public Money Using a Network of Tax Havens

"The taxpayers are sending congressmen on expensive trips abroad. It might be worth it except they keep coming back."

--Will Rogers



Summary: Microsoft's long history of tax evasion is finally taking some toll as the US tax authority, the IRS, is going after Microsoft and unravels its international network (or syndicate) of tax avoidance

WE find it amazing (not just interesting) to see a branch of the US government, the IRS, going after 'big fish' (for a change). These bodies or branches of government are usually corrupted enough to overlook abuses of powerful entities that are closely connected to the government and thus pose a threat to the career of anyone 'daring' to expose and litigate. Remember what happened to the judge who threatened to split Microsoft?



"Remember what happened to the judge who threatened to split Microsoft?"Microsoft is not an ordinary company. Remember that Microsoft actually threatened the IRS [1, 2] for merely 'daring' to look into (and potentially expose) organised tax evasion by these arrogant thugs at Microsoft. Microsoft's avoidance of taxes is a long-explored subject at Techrights, so we are delighted to see the IRS finally tackling the issue. It's well overdue and belated (by several decades). Never forget that Microsoft literally threatened the IRS for merely doing its job, which was to expose tax evasion. The poor little IRS thought it was big enough to take on Microsoft (like DOJ taking on Wall Street), whereupon Microsoft bullied it with deterrence lawsuits. Interestingly enough, please note that the same legal firm which lobbies alongside Microsoft on the patent front is the same one threatening to sue me over EPO coverage. The EPO started sending threatening legal letters only after (and only regarding) EPO abuses implicating Microsoft. How will Microsoft respond to the IRS other than threaten the IRS with lawsuits?

"Microsoft’s avoidance of taxes is a long-explored subject at Techrights, so we are delighted to see the IRS finally tackling the issue."Matt Day's detailed article about it (in the Seattle Times) says: "Court documents in a case between Microsoft and the IRS provide a detailed look at how the company, like other multinational corporations, has created a complex structure that allows it to minimize its tax bill."

It is worth noting that the Seattle Times was paid by Bill Gates and it showed, so this article may be 'risky' for their financial lifeline. We have already shown how sites which receive Bill Gates' money shortly thereafter remove criticism of Microsoft (even retrospectively!).

There's a spurious part about "other multinational corporations". Saying that a lot of other companies (not under IRS probe) evade tax is a Microsoft-serving evasion tactic. Microsoft is, in our experience, more criminal and corrupt than counterparts. We have provided ample evidence of this over the years.

"Remember when a whistleblower exposed Microsoft corruption (financial fraud to be precise) and Microsoft paid him $4 million to shut up and then scuttled the investigation with the SEC?"What the IRS says about Microsoft isn't a shocking revelation but perhaps the first time (in recent history) that those in positions of (relatively) high power are "brave" enough to say the truth. Remember when a whistleblower exposed Microsoft corruption (financial fraud to be precise) and Microsoft paid him $4 million to shut up and then scuttled the investigation with the SEC? That was back in the late 90s. Microsoft's financial situation isn't what it seems and the company does not operate like it publicly claims. Microsoft has been mostly a piggy-bank for Bill Gates, who himself does not pay tax. Bill Gates is avoiding billions in taxes by pretending he runs a charity. Mark Zuckerberg is to latest to imitate this nasty PR ploy and Microsoft was perhaps one of the earliest software giants (if not the pioneer) when it comes to massive-scale tax evasion. Many software companies just thought, "hey, we can do this too."

"From 2001 to 2006," Day explains, "Microsoft completed a series of intracompany deals that, in exchange for upfront payments, shifted the rights to software code and other assets developed largely in the U.S., to subsidiaries in Bermuda, Ireland, Singapore and Puerto Rico.

"When Bill Gates bribes large newspapers they just tend to focus on tax avoidance by companies other than Microsoft.""Those deals reduced Microsoft’s cumulative tax bill in future years by tens of billions of dollars, according to court documents and an analysis of the company’s filings."

Read it again: "tens of billions of dollars" (and the IRS usually just cracks down on businesses over a few thousands of dollars).

Singapore, as it turns out, continues to enrich itself (by "itself" we mean few corrupt politicians and businessmen) by facilitating such tax evasion, much like Switzerland (Singapore seems to have become the Zurich of Asia, and that's not meant to be a compliment).

Day has posted some short summaries of his article in Twitter, noting that "on taxes, Microsoft behaves like much of the rest of big Corporate America: they’ve tried to limit the cash they send to governments."

"Why did it take two decades for the IRS to do something about it?"No, as explained above, Microsoft is quite unique. When Bill Gates bribes large newspapers they just tend to focus on tax avoidance by companies other than Microsoft. We have given examples of this, e.g. The Guardian.

Day says that "Microsoft spent 20 years building a network of subsidiaries that, among other things, avoided a lot of taxes."

Why did it take two decades for the IRS to do something about it? Could it be Microsoft's influence in the US government? If it wasn't a government-embedded company like Microsoft, one would call it organised crime and it would be front page news (many tens of billions of dollars in tax evasion).

"If it wasn’t a government-embedded company like Microsoft, one would call it organised crime and it would be front page news (many tens of billions of dollars in tax evasion)."Day says that "Microsoft officially sells most products from Ireland, Puerto Rico or Singapore. In the U.S., most sales start in Nevada (few biz taxes)."

Yes, and guess who's facilitating this. It is well documented, as some people have shown for many years, that Microsoft put former executives as moles inside the local government, perhaps in order to facilitate tax-related crime and send everything from Washington to Reno. We named the people involved about half a decade ago. Where was the IRS all this time? It couldn't defend itself by saying that it hadn't noticed. People from inside Microsoft complained about this.

Day says: "Each of Microsoft’s global hubs is designed to place some profit in Bermuda, the island tax haven. It’s unclear how much."

"We named the people involved about half a decade ago."Well, it's time to investigate. This is a big case implicating "big" people and involving a lot of money. Don't expect any arrests though. Rich people rarely go to prison.

Day adds: "That structure, created ~2001-2006, saved Microsoft tens of billions of dollars in taxes. Likely 100s of mill saved in Washington state."

According to a campaigner from Microsoft -- one who left Microsoft and then became a vocal critic of Microsoft's tax evasion (he even created a whole Web site about it) -- we're talking about well over a billion, not "100s of mill", 'saved' (means evaded) in Washington state. Half a decade ago it was estimated at well over a billion, so maybe it's already $2 billion.

"It's a massive international racket and we hope that the IRS will get to the bottom of it rather than spend a lot of time going after "easy" cases and crushing relatively poor people."As we have said here before, based on over a decade of research, Microsoft is not an ordinary company. It's more like a clique of power-hungry people. Microsoft continues to conveniently masquerade as "software company" when in reality it has patent trolls (satellites) bullying practicing firms and funneling untold amounts of money to offshore divisions and subsidiaries such as "licensing" (e.g. Android licensing). It's a massive international racket and we hope that the IRS will get to the bottom of it rather than spend a lot of time going after "easy" cases and crushing relatively poor people.

Apple, to its 'credit' [pun intended], seems to have learned Microsoft's dirty tricks and a new article from the financial press suggests that Apple too is in trouble over taxes, at least in Europe. Well, are governments around the world strong enough to tackle the Big Evaders? As in Big Business? Whose side are they on? Let's see if we have a real functioning democracy.

The financial crisis of 2008 showed whose side governments tend to be on when they not only failed to arrest a lot of (likely) guilty bankers but actually took taxpayers' money and gave it out to these bankers as a "bailout" gift.

Recent Techrights' Posts

Linus Torvalds Blasts Software Freedom Conservancy (SFC) for Attempting to 'Protect' Linux
Like it 'protects' women
New Record for GNU/Linux in Australia (at Microsoft's Expense)
Windows is at an all-time low, GNU/Linux... all-time high
Fighting Over Whose Pockets Are Deeper (or Who Borrows More Money)
When processes favour those who are more wealthy (or more willing to go into infinite debt or steal money of other people) those processes match the attributes of lawfare rather than law
Starting a Book With a Flawed Premise or Weak Hypothesis
To me, Schneier is a sort of "RMS of sec"
Microsoft's Mass Layoffs (30,000+ in 2025) Not About "AI", Just Business Failure
"AI" is replacing... the old excuses for mass layoffs
EPO People Power - Part XVI - Berenguer Does Not Speak German, So What Did He Tell German Police That Busted Him?
based in Germany and does not speak the language
Challenges for EPO Insiders to Try to Tackle in 2026
Nothing will get solved as long as the circus that runs this show tries to keep the circus going
 
Links 28/12/2025: 'Digital Detox' and Slop "Backlash Grew Massively in 2025"
Links for the day
Links 28/12/2025: "Mass Quitting Apple" and "Generative AI Industry is Fraudulent, Immoral and Dangerous"
Links for the day
Links 28/12/2025: Fascination, Holidays, and Mormonism
Links for the day
Microsoft's Weapon Against the Reality of XBox (the Console) Dying Seems to be LLM Slop
XBox is dead/dying
Raffles for the Immaterial: Unauthorised Bingo for Red Hat "Vouchers"
This is IBM and some slop images
Andy Farnell on Standing Up Against Technological Oppression
some portions from it
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Saturday, December 27, 2025
IRC logs for Saturday, December 27, 2025
Once Again, GAFAM Deletes All Your Data, Only Corrects This After Millions of People Lead an Uproar Online ("Richard Stallman Warned Us About This")
No lessons learned, eh?
You Know Your Critics Are Jealous and Have Inferiority Complex When...
One day we'll write about all this in great depth
"But Corruption is Everywhere"
"We'll always have Polio..."
Days Without Slop About "Linux"
It's time to move on
Links 27/12/2025: Canada Post Strike Called Off, Debate About Europeans "Working Over Christmas"
Links for the day
Gemini Links 27/12/2025: Household Appliances and Flight Fright
Links for the day
Links 27/12/2025: US Cracking Down on Whistleblowers, Expanding Bombardment Campaigns Worldwide
Links for the day
Resuming EPO Coverage Today, Can António Campinos 'Survive' Cocainegate?
We said we'd continue in the weekend
Links 27/12/2025: More Attacks on Media (Meduza Co-founder Sentenced to Prison in Absentia), "What Owning Music Means To Me"
Links for the day
Gemini Links 27/12/2025: geminiprotocol.net Downtime and Capsular Gemlog Manager
Links for the day
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Friday, December 26, 2025
IRC logs for Friday, December 26, 2025
Tossing Embarrassing News Under the Christmastime Bus
This isn't just some coincidence; those are conscious choices
Victim-Blaming in Debian
Verhelst previously did blame-shifting when Debian suicide clusters happened
IBM Cuts in Japan, Red Hat is Attached to a Sinking Ship
IBM, which controls Red Hat, is a rapidly shrinking company
Manchester United Dumped Microsoft Because Qualcomm Sort of Did
The Windows PCs were an utter failure
Free Software Foundation (FSF) Supported by Unconventional Digital Bartering Communities
But no strings attached
Geminispace: 5,000 Capsules in 2026
There are 4.8k now
Gemini Links 26/12/2025: Careful What You Eat and "My Secret Santa"
Links for the day
The Indigenous Community Versus Corporate AstroTurt and 'Cancel Culture'
Good people will recognise exactly what's happening here and respond to it tactfully
Richard Stallman: Epstein is a Serial Rapist. Bill Epsteingate: Epstein is a Friend.
Supporting the FSF (or Richard Stallman) is supporting those who asserted Epstein had serially raped women
The Paradox of GAFAM: Saying You Protect Women, Appointing Abusers of Women to Run the Company
older articles
Censored by FreeBSD Core Team Secretary, Reinstated After Talking About it in Public
FreeBSD misfiring a CoC?
Links 26/12/2025: Chatbot Toys Terrorising Children, US Undeclared "War on Terror" Unilaterally Extends to Nigeria During Holidays
Links for the day
Links 26/12/2025: French Postal Services Under Russian Attack, U.S. Cheetos Accuse People Who Obstruct Information Warfare by Russia of "Censorship"
Links for the day
Debian's Daniel Kahn Gillmor is Wrong, Signal is No "Gold Standard" (It's Also Promoted by Proponents of Back Doors)
I'm not too sure why Debian or the ACLU would wish to associate with this
Next Year Will be the Year of Quantum, Just Like 2020, 2015, 2010, 2005 and So On
"Quantum" is the future
The Silent Power of Coercion Over Speech
The important thing is optics
Kazakhstan Doesn't Need GAFAM Datacentres (Spy Hubs)
Suffice to say, as far as we can gather nothing came out from the empty (false) promises of GAFAM's "data centers in Kazakhstan"
So Simple That You Can Touch and Feel It
In light of recent experiences
Christmas Music Project: Back to When Music Was Music
now Canonical (or Ubuntu) says we should make available tens of gigabytes of disk space
Internet Relay Chat (IRC) Under Attack by Cross-Network Spam Floods
So far we've been spared (our network has not been targeted at all) [...] Let's hope the spam won't discourage the hundreds of thousands of people worldwide who still use IRC
An "AI-Infused" Windows
Microsoft Windows isn't becoming a worthless pile of garbage by accident
Microsoft Laid Off Over 30,000 People This Year, Coders Are "Too Expensive"
Go get some popcorn. Microsoft "slopware" is about to get real!
Critics Have Long Said Microsoft Produces "Slopware", Microsoft Wants to Prove Them Right
Slop instead of code is a step in the right direction?
The Top 8 Innovations of IBM in 2025
What innovations will come out from IBM in 2026?
And as the Year Turns...
The significance of new years isn't based on geology or astronomy or anything like that
Appliances Versus Computers
Replacing a computer inside an object of some kind or inside an appliance (which nowadays includes "modern" cars) isn't simple and isn't cheap
A Dark Side of Europe
They try hard to silence people who speak about these issues
Why People Love Techrights (and Also Loved "Boycott Novell")
I will continue to publish for many decades to come
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Thursday, December 25, 2025
IRC logs for Thursday, December 25, 2025
Browsing Techrights With a GUI and 10 Megabytes of RAM Per Tab
Some people say it's not possible in 2025, maybe in part because they depend on very bloated software
A Tribute to Richard Stallman
It's about knowledge and sharing
Links 26/12/2025: Impermanence, Salt and Thermometer, Freetube
Links for the day