Microsoft, known for owning the Xbox and its considerable financial resources, is facing an unexpected challenge: a whopping $29 billion tax bill.

This news surfaced in a recent CNBC report, following an 8-K filing by the tech giant. The company has expressed disagreement with the proposed adjustments and plans to challenge them in court if necessary. However, before reaching that stage, Microsoft will undergo an administrative appeal with the IRS, which may take several years.

The disagreement lies in the distribution of profits from 2004 to 2013. Microsoft's tax allocation across various countries and jurisdictions during this period is in question. The company contends that up to $10 billion in already paid taxes is not reflected in the IRS's calculations.

Microsoft is confident that they have consistently followed IRS rules and paid all necessary taxes, both in the US and globally. As one of the top U.S corporate income taxpayers, the company has paid over $67 billion in taxes to the U.S since 2004. They do not foresee a resolution or significant shift in their tax contingencies in the coming year but assure their income tax provisions are sufficient.

On another note, Microsoft is closing a deal to acquire Activision Blizzard for $69 billion. This agreement's completion date is due this week, putting an end to the pursuit of the creator of well-known games like Call of Duty, World of Warcraft, and Candy Crush. Activision Blizzard affirms that gamers should not anticipate titles like Call of Duty: Modern Warfare 3 and Diablo 4 to be available on Xbox Game Pass soon, but it plans to add its games to the subscription service starting from 2024.