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IRS Is Suing Facebook Over Asset Transfers In Ireland (fortune.com)
An anonymous reader quotes a report from Fortune: The Internal Revenue Service (IRS) has sued Facebook on Wednesday to force it to comply with summonses related to a 2010 asset transfer. Fortune reports: "According to documents the IRS filed in San Francisco federal court, the agency suspects Facebook and its accounting firm, Ernst and Young, understated the value of intangible assets transferred to Ireland by billions of dollars. The IRS says it is seeking an order to enforce six summonses that asked Facebook to appear at the agency's offices in San Jose, Calif., and to produce papers and others records. According to IRS agent Nina Stone, Facebook failed to show up at the appointed date of June 17, and nor did it provide the documents. The dispute arose as a result of an ongoing audit of Facebook by IRS that stretches back to 2010. In that year, the company chose to designate Facebook Ireland as the rights-holder for its worldwide business outside of the U.S. and Canada, and also to transfer intellectual property assets such as its platform and 'marketing intangibles.' The crux of the disagreement between Facebook and the IRS turns on the arcane question of whether the assets in question could be transferred in their entirety or if, as the agency argues, they are 'interdependent.' [The agent's declaration can be found here.] Such arrangements are common among U.S. tech companies, and seek to reduce tax payments by scoring revenue in low tax jurisdictions like Ireland, while having higher tax countries (especially the U.S.) reduce profits by paying to license intellectual property from overseas subsidiaries."
I thought that tech companies, like Facebook and others, leaned toward supporting Democrats. The Democrats constantly crow about how the rich aren't paying their fair share when it comes to taxes. If Facebook's executives are so committed to the cause, then why all the accounting chicanery? Why not leave the assets in the US and pay their "fair share" of taxes? Or do moves like this imply that the US tax rate is too high? So confusing ...
Those poor oppressed corporations! That mean nasty government! How dare the government demant FB pay its fair share...
putting the 'B' in LGBTQ+
This seems to be a case of Facebook going one step too far (and they deserve to be hunted down for it), however current laws mean for the most part their fair share is SFA or Zero.
I completely disagree that "fair share" equals what they are legally obligated to pay. Just because they found a clever loophole in the tax law doesn't mean what they are doing is fair or right. Just because what Facebook does complies with the law doesn't make it right. Or to use an extreme example are you arguing that things like Jim Crow were fair because they complied with the law of the day? Because that is basically what you are arguing (legal = fair = right). Sometimes the laws are poorly written but that doesn't make the law fair or compliance with the law right. All it really means is that if they are doing something legal but wrong that we should change the laws to outlaw it in the future.
tax laws need to change, lower corporate laws with harsher and stricter rules for moving assets offshore would help to fix this. It is far better to get 10% of billions than 30% of nothing.
Agreed that the tax laws need to change. Particularly the bits relating to transaction locations, locating intangible property, and probably taxation as a function of gross receipts instead of profits for multinational corporations. If a company finds it worthwhile to devote a large staff towards finding convoluted ways of minimizing their tax burden then something is clearly amiss with the tax laws.
There's nothing "fair" about what the ridiculously large mafia-style variable-rate kickbacks the IRS and US government is attempting to extract from enterprises and members of the public.
That's a rather tortured way of saying you don't think they should be obligated to pay taxes. Why not just come out and say it?
I say kudos to Facebook, and any company who manages to still exist in the US and provide jobs and valuable goods and services without being raped by the IRS.
So as a taxpayer I'm supposed to be ok with picking up the tax burden that Facebook is dodging because they found some sneaky loophole to get out of paying their tax bill? Maybe you're fine with that but I'm not. I don't give a shit if what they did is legal or not. We have a $17 TRILLION national debt and I think it's quite appropriate that Facebook help out with that. They enjoy the benefits of being a US corporation without the responsibilities.