A federal judge ordered Microsoft to hand over certain documents that the Internal Revenue Service (IRS) has required for more than a decade about the possible diversion to Puerto Rico of nearly $39,000 million in order to avoid taxes.
Judge Ricardo Martínez, of the Western District Court of the State of Washington, determined last Friday that he has reached “the inescapable conclusion” that Microsoft transactions had the main purpose, “but the only one”, of “avoiding or evading the payment of federal contributions, ”according to Press.
The IRS has been in a battle with Microsoft since 2005 over its practices of transferring intellectual property to subsidiaries in Puerto Rico. The federal government examines whether through these transactions, the company has evaded the payment of $39 Billion.
Judge Martinez gave Microsoft a week to deliver the documents.
The company argued that this is confidential information, protected by United States tax laws.
In reacting to the order of Judge Martínez, the company said the decision is based on “limited information” that does not call into question “the validity of tax arrangements.”
ProPublica reviewed on Wednesday, in an extensive report, the legal and administrative battle that the IRS and Microsoft have maintained over their tax transactions in Puerto Rico. According to The Hill, Judge Martínez decided to order the delivery of documents to the IRS, after being contacted by ProPublica as part of his journalistic investigation.
In 2012, the president of the Senate Research subcommittee, then Democratic Senator Carl Levin (Michigan), released a report that reflects how between 2009 and 2011 Microsoft, transferring certain intellectual property rights to its Puerto Rican subsidiary, He was able to keep almost $21 billion out of the hands of the Treasury Department, which represented about half of its sales revenue in the United States.
