12.14.15

Gemini version available ♊︎

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

Posted in Finance at 5:03 pm by Dr. Roy Schestowitz

“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.

Share in other sites/networks: These icons link to social bookmarking sites where readers can share and discover new web pages.
  • Reddit
  • email

Decor ᶃ Gemini Space

Below is a Web proxy. We recommend getting a Gemini client/browser.

Black/white/grey bullet button This post is also available in Gemini over at this address (requires a Gemini client/browser to open).

Decor ✐ Cross-references

Black/white/grey bullet button Pages that cross-reference this one, if any exist, are listed below or will be listed below over time.

Decor ▢ Respond and Discuss

Black/white/grey bullet button If you liked this post, consider subscribing to the RSS feed or join us now at the IRC channels.

DecorWhat Else is New


  1. IRC Proceedings: Friday, January 21, 2022

    IRC logs for Friday, January 21, 2022



  2. Peak Code — Part II: Lost Source

    "Debian and Mozilla played along. They were made “Yeoman Freeholders” in return for rewriting their charters to “work closely with the new Ministry in the interests of all stakeholders” – or some-such vacuous spout… because no one remembers… after that it started."



  3. Links 22/1/2022: Ubuntu MATE 21.10 for GPD Pocket 3, MINISFORUM Preloads GNU/Linux

    Links for the day



  4. Computer Users Should be Operators, But Instead They're Being Operated by Vendors and Governments

    Computers have been turned into hostile black boxes (unlike Blackbox) that distrust the person who purchased them; moreover, from a legislative point of view, encryption (i.e. computer security) is perceived and treated by governments like a threat instead of something imperative — a necessity for society’s empowerment (privacy is about control and people in positions of unjust power want total and complete control)



  5. Peak Code — Part I: Before the Wars

    Article/series by Dr. Andy Farnell: "in the period between 1960 and 2060 people had mistaken what they called "The Internet" for a communications system, when it had in fact been an Ideal and a Battleground all along - the site of the 100 years info-war."



  6. Links 21/1/2022: RISC-V Development Board and Rust 1.58.1

    Links for the day



  7. IRC Proceedings: Thursday, January 20, 2022

    IRC logs for Thursday, January 20, 2022



  8. Gemini Lets You Control the Presentation Layer to Suit Your Own Needs

    In Gemini (or the Web as seen through Gemini clients such as Kristall) the user comes first; it's not sites/capsules that tell the user how pages are presented/rendered, as they decide only on structural/semantic aspects



  9. The Future of Techrights

    Futures are difficult to predict, but our general vision for the years ahead revolves around more community involvement and less (none or decreased) reliance on third parties, especially monopolistic corporations, mostly because they oppress the population via the network and via electronic devices



  10. [Meme] UPC for CJEU

    When you do illegal things and knowingly break the law to get started with a “legal” system you know it’ll end up in tears… or the CJEU



  11. Links 20/1/2022: 'Pluton' Pushback and Red Hat Satellite 6.10.2

    Links for the day



  12. The Web is a Corporate Misinformation/Disinformation Platform, Biased Against Communities, Facts, and Science

    Misinformation/disinformation in so-called 'news' sites is a pandemic which spreads; in the process, the founder of GNU/Linux gets defamed and GNU/Linux itself is described as the problem, not the solution to the actual problems



  13. Links 20/1/2022: McKinsey Openwashing and Stable Kernels

    Links for the day



  14. IRC Proceedings: Wednesday, January 19, 2022

    IRC logs for Wednesday, January 19, 2022



  15. Links 20/1/2022: Linuxfx 11.1 WxDesktop 11.0.3 and FreeIPMI 1.6.9 Released

    Links for the day



  16. Links 19/1/2022: XWayland 22.1 RC1 and OnlyOffice 7.0 Release

    Links for the day



  17. Links 19/1/2022: ArchLabs 2022.01.18 and KDE's 15-Minute Bug Initiative

    Links for the day



  18. When Twitter Protects Abusers and Abuse (and Twitter's Sponsors)

    Twitter is an out-of-control censorship machine and it should be treated accordingly even by those who merely "read" or "follow" Twitter accounts; Twitter is a filter, not a news/media platform or even means of communication



  19. IRC Proceedings: Tuesday, January 18, 2022

    IRC logs for Tuesday, January 18, 2022



  20. Links 19/1/2022: Wine 7.x Era Begins and Istio 1.12.2 is Out

    Links for the day



  21. Another Video IBM Does Not Want You to Watch

    It seems very much possible that IBM (or someone close to IBM) is trying to purge me from Twitter, so let’s examine what they may be trying to distract from. As we put it 2 years ago, "Watson" is a lot more offensive than those supposedly offensive words IBM is working to purge; think about those hundreds of Red Hat workers who are black and were never told about ethnic purges of blacks facilitated by IBM (their new boss).



  22. What IBM Does Not Want You to Watch

    Let's 'Streisand it'...



  23. Good News, Bad News (and Back to Normal)

    When many services are reliant on the integrity of a single, very tiny MicroSD card you're only moments away from 2 days of intensive labour (recovery, investigation, migration, and further coding); we've learned our lessons and took advantage of this incident to upgrade the operating system, double the storage space, even improve the code slightly (for compatibility with newer systems)



  24. Someone Is Very Desperate to Knock My Account Off Twitter

    Many reports against me — some successful — are putting my free speech (and factual statements) at risk



  25. Links 18/1/2022: Deepin 20.4 and Qubes OS 4.1.0 RC4

    Links for the day



  26. Links 18/1/2022: GNOME 42 Alpha and KStars 3.5.7

    Links for the day



  27. IRC Proceedings: Monday, January 17, 2022

    IRC logs for Monday, January 17, 2022



  28. Links 17/1/2022: More Microsoft-Connected FUD Against Linux as Its Share Continues to Fall

    Links for the day



  29. The GUI Challenge

    The latest article from Andy concerns the Command Line Challenge



  30. Links 17/1/2022: digiKam 7.5.0 and GhostBSD 22.01.12 Released

    Links for the day


RSS 64x64RSS Feed: subscribe to the RSS feed for regular updates

Home iconSite Wiki: You can improve this site by helping the extension of the site's content

Home iconSite Home: Background about the site and some key features in the front page

Chat iconIRC Channel: Come and chat with us in real time

Recent Posts