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Senators Question KPMG Role in Microsoft Profit-Shifting Scheme

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Summary

Three senators have written a letter to KPMG's CEO questioning the company's role in a Microsoft tax scheme, which involved transferring billions in profits to a small factory in Puerto Rico. The IRS has since sent Microsoft a bill for $28.9 billion in back taxes. The senators argued that KPMG's role in the scheme deprived the federal government of billions in tax revenue needed to pay for public services. They asked KPMG to explain their actions. KPMG had advised Microsoft on the deal and worked to make it seem legitimate. Microsoft has vowed to appeal the findings of the IRS audit and KPMG has not yet commented.

Q&As

What was the role of KPMG in a Microsoft tax scheme?
KPMG proposed that Microsoft transfer billions in profits to a small factory in Puerto Rico.

What was the result of the IRS audit of Microsoft?
The IRS sent the company a bill for $28.9 billion in back taxes.

What did KPMG do to help Microsoft save billions in taxes?
KPMG helped Microsoft transfer profits to Puerto Rico to help the software giant save billions in taxes.

What did the three senators assert about KPMG’s role in Microsoft’s tax evasion?
The three senators asserted that KPMG’s role in Microsoft’s tax evasion was “deeply disturbing.”

What have been the consequences of cutting the IRS budget?
The consequences of cutting the IRS budget have been that it is understaffed and on the defensive, which has been good news for tax cheats, the rich, and big corporations, but not for the poor.

AI Comments

👍 This article offers an in-depth look into an important story about the role of KPMG in a Microsoft tax scheme, and how it could have implications for the federal government.

👎 The story does not provide enough context to the which other companies may have been involved in similar deals, leaving readers with a incomplete understanding of the issue.

AI Discussion

Me: It's about three senators questioning KPMG's role in a Microsoft tax scheme that saved the software company billions, but then led to an IRS audit and a bill for $28.9 billion in back taxes.

Friend: Wow, that's a lot of money! What are the implications of this article?

Me: Well, the senators are questioning KPMG's involvement in helping Microsoft avoid paying taxes. This could lead to more scrutiny of KPMG and other companies that engage in similar tax avoidance schemes. It could also lead to more regulations on corporate tax avoidance practices, as well as increased enforcement of existing regulations. Additionally, it could result in a decrease in corporate profits due to higher taxes, which could have a ripple effect on the economy.

Action items

Research the history of KPMG and other Big Four consultancies to understand their role in enabling profit-shifting transactions.
Follow the progress of the Microsoft audit and other similar cases to stay informed on the latest developments.
Make a donation to ProPublica to support independent journalism and help ensure that stories like this one can continue to be produced.

Technical terms

Regulation: Rules or laws that govern the behavior of individuals or organizations.
Taxes: Money paid to the government by individuals or businesses to fund public services.
Profit-Shifting: The practice of transferring profits from one jurisdiction to another to reduce the amount of taxes paid.
IRS: The Internal Revenue Service, the U.S. government agency responsible for collecting taxes.
Audit: A review of financial records to ensure accuracy and compliance with laws and regulations.
Tax Shelter: A legal arrangement that reduces or eliminates taxes.
Big Four: The four largest accounting firms in the world: Deloitte, KPMG, Ernst & Young, and PricewaterhouseCoopers.
Privilege: A legal right or immunity granted to a person or organization.