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

Firefox in Trouble in the US, Down to Lowest Level in 20+ Years
more sites will stop or intentionally neglect Firefox support
Clownflare: More Than 1 in 5 Laptops or Desktops in El Salvador Run GNU/Linux or ChromeOS
Clownflare Radar reckons it's more like 20%+ now
Omarchy is Already Dying
Same as the life cycle of slopfarms
Slop's Achilles Heel: It Increases the Workload, Not Just Costs
Set aside its inability to scale well
Improving techrights.org
Technical debt (like 17 years with WordPress) is something that's better to address early, not later
 
Gemini Links 19/08/2026: "Big Boost in Autonomy" and "Answer of E-Mail"
Links for the day
SLAPP Censorship - Part 154 Out of 200: Computer-Generated Legal Filings From Men Who Are Salaried by Mass Plagiarism Companies in Another Continent (America)
This isn't the behaviour of a moral person but of some sort of "crypto bro" or "slop bro"
Fired by IBM for Medical Leave, Rampant Censorship of IBM Critics Explained
We've already caught and showed many cases where thelayoff.com deleted comments that were not even remotely racist
Links 19/08/2026: First Amendment Under Fire by White House of Cards, "Universities Were Forced to Pay Up" for Not Censoring
Links for the day
Gemini Links 19/08/2026: What Friendship Means, Sm0lNet/SmolNet, and New Feeds
Links for the day
No, WSL (Windows With Fake 'Linux') Isn't Growing Faster Than Ubuntu, This Was Disinformation Spread by a Microsoft Propaganda Site, Then Spread by Slopfarms
Be sceptical; Microsoft is truly desperate for anti-Linux spin right now, seeing that Windows is in a freefall
Microsoft's Mass Layoffs Impact the Ability to Run Microsoft
Can Microsoft still run Microsoft?
Microsoft's Active Directory ("AD") and "Entra" Are National Security Threats
Even the US government concluded Microsoft could not be trusted for security; it issued a formal report about it in April 2024
Instant Impact: GNU/Linux Skyrockets to 10% in China Days After Policy Changes
Let's see what the 'aftermath' looks like by year's end
Links 19/08/2026: Timothy James King (AmigaDOS) Dies, GitHub Goes Offline, Finland Wants to Shun Social Control Media
Links for the day
Mass Layoffs at Dropbox, Blame the Debt, Not Slop Hype
The debt of Dropbox Inc., which isn't an imaginary (estimated) thing, is over 4 billion dollars
Microsoft is 'Angel of Death' to Developers (Even Its Own), 'Voluntary' Layoffs Happening Again
From what we are hearing and reading, there are 'voluntary' layoffs again
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Tuesday, August 18, 2026
IRC logs for Tuesday, August 18, 2026
Gemini Links 19/08/2026: Shirts, Handwriting, and Fights in Geminispace
Links for the day
Laos Leaving GAFAM Behind, Gradually
Yesterday evening it was measured at 10% for GNU/Linux at one point
They Were Wrong All Along
Two women combined won't deliver a healthy baby in just 4.5 months
A "Tech Journalist" Would Not Cover Vote on LLMs as a Sex Issue
For a moment there you have to pause and wonder, is this a "Tech Journalist" or the Daily Stormer?
20,000 by Year's End
The "New Techrights" will have 20,000 pages by year's end
Last Night GNU/Linux Measured at 9% in Africa
Nighttimes in Africa are times when GNU/Linux usage on desktop/laptop devices typically surges, based on Clownflare [...] It changes in favour of GNU/Linux
Gemini Links 18/08/2026: Google Bait and Switch (Getting College People 'Hooked' on 'Cheap' Storage, Then Backups Gone), a "Question of E-mail"
Links for the day
Bluesky is in Trouble
Bluesky is a private company (unlike Bluesky Digital Assets Corp. in Toronto, that one runs a pyramid scheme!), so it's hard to know for sure just how much money it is losing
China Says Goodbye to Microsoft
It is hardly surprising that Windows is shedding off userbase all around the world
Links 18/08/2026: US Abandons South Korea, New Legal Disputes Over Slop Plagiarism in the Music Scene
Links for the day
Linux Losing Interest in Users' Freedom, Pursues DRM Instead
"Linux" is (or was, as GNU/Linux) meant to empower - not artificially restrict - the users
GNU/Linux in Ecuador and Colombia: Growing, Still Below International Average
locals turn away from Windows and try GNU/Linux instead
IBM is Dead or Dying. Now It Asks Workers to 'Resign' Voluntarily.
To save face, to pretend no layoffs are happening (as it might alarm shareholders) [...] We keep hearing more and more stories like that
Links 18/08/2026: Sergey Brin Controlling State Policies, "Dario Amodei's (Anthropic) Wife Is Closely Linked to Jeffrey Epstein"
Links for the day
SBS News Interviews Daniel Pocock
The locals say this PR stunt (by the bigot, Farage) was a waste of money
Clownflare Sees One in 7 Web Requests in Libya Originating From GNU/Linux
GNU/Linux has taken a (foot)hold there
Openwashing and Manifestos Composed in Private by Dictators With Deliberately Addictive (and Subsidised, Bundled) 'Tech'
It's long, so make a cuppa first
SLAPP Censorship - Part 153 Out of 200: Decades of Debt, Weaponising Borrowed Money to Try to Put Their Critics in Debt
they've always had a financial report by now
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Monday, August 17, 2026
IRC logs for Monday, August 17, 2026
Gemini Links 18/08/2026: Solar Power, Kipple and Impermanence, Catastrophe Ethics
Links for the day
Evri (HermesUK) is Now Run by Bots and Hallucinating Scammers
Years ago they virtually removed support and tried chatbots instead
Less Technology, More Life
Technology is being associated (sometimes rightly) with physical and mental problems
Google Search Has Gotten Worse (a Lot Worse)
getting worse
Birthday in 80 Days
we'll start decorating and party online with our community
Loans and Massive Debt at Microsoft, This Won't End Well.
Microsoft running out of money to pay salaries (to the point of paying people for 'voluntary' layoffs) is a positive sign?
Gemini Links 17/08/2026: Life in Plain Text, Mimicking KARL, Release of Jugulans, Avoiding Slop
Links for the day
Clown Storage Without Backups
Setting up several reliable copies of the data, plus several off-site backups (this data is nowhere as sensitive as medical data), should only cost a few grand
FreeCAD is Becoming Slop-ware, Use LibreCAD Instead
It has regular releases and "Qt5 is mandatory" now [...] they at least audit what they add
Cuba and Venezuela High in Adoption of GNU/Linux
some of the "communist" nations
Links 17/08/2026: Myanmar’s Cholera Outbreak, China Sends Commercial Vessels Through Arctic
Links for the day
GAFAM Loyalty Has Come to an End, Morale Low, People Whose Future is Uncertain Choose to Become "Lifers"
morale is low and there's no loyalty anymore
SLAPP Censorship - Part 152 Out of 200: Injunctions Do Not Cover Criticism, They Have Scope
self-incriminating communications
Clownflare Sees About Quarter of Web Requests in Ireland Coming From GNU/Linux
Well, in Ireland it seems like many people adopted GNU/Linux
Clownflare: In Australia and New Zealand GNU/Linux Peaks at Over 10% During Working Hours
That right there is interesting in its own right
Slowing Down by Intention
At the moment we have 6 or 7 ongoing series
Gemini Links 17/08/2026: Chamboree, Partial Solar Eclipse, Lady Macbeth
Links for the day
Links 17/08/2026: "Bluesky Is Down Again!" and "Anti-Social Media"
Links for the day
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Sunday, August 16, 2026
IRC logs for Sunday, August 16, 2026