Microsoft is suing the United States Internal Revenue Service (IRS) for failing to disclose details of a private investigation that is believed to implicate the company and some of its tax practices in the country.
The software giant says in the lawsuit filed in the U.S. District Court for the District of Columbia that it contacted the IRS and requested information about the ongoing investigation under the Freedom of Information Act (FOIA), but the agency has so far refused to respond.
Microsoft IRS has a partnership with the law firm Quinn Emanuel Urquhart & Sullivan, an agreement signed in May 2014 and worth more than $2 million (1.8 million euros).
It appears that Quinn Emanuel Urquhart & Sullivan was specifically appointed to investigate the Microsoft case, but no documents have yet been revealed despite the company's requests.
Microsoft has so far been involved in several tax fraud investigations in the United States and many other countries around the world, and it appears that the IRS is now closely investigating this matter.
The software giant first asked the IRS to disclose information about its investigation in September, but then the agency requested an extension of the legal 20-day deadline to provide a response.
Microsoft apparently claims that the IRS does not intend to provide explanations for conducting the investigation, which is why the company referred this dispute to the court to get an answer.
“Plaintiff seeks to compel the disclosure of a government contract and related records that were unlawfully withheld by the agency (“defendant” or “IRS”) and which arise from its collaboration with the law firm of Quinn Emanuel Urquhart & Sullivan, LLP, its partners and/or employees (collectively, “Quinn Emanuel”) to assist the IRS in preparing, organizing and presenting factual and legal analysis related to defendant’s transfer pricing audits of Microsoft,” the company states.
It wouldn't be the first time Microsoft has been accused of tax violations, but the company has said it fully complies with United States law and will not resort to tax avoidance methods to minimize expenses and increase its profits.
The same thing happened in other countries around the world, especially in Europe, where Microsoft faced market researchers in countries like Denmark and Luxembourg after being accused of exploiting loopholes in local laws in order to avoid paying millions of dollars in taxes.
