Facebook May Owe $5 Billion In Taxes, See Why!

Facebook (FBTech30) revealed Thursday it could owe around $5 billion to the IRS after it moved assets to an Irish subsidiary to avoid higher taxes.

The penalty of $5 billion, plus interest could have a “material adverse impact” on its financial position, said Facebook

The U.S. Justice Department filed a lawsuit three weeks ago forcing Facebook to comply with the IRS investigation.

The investigation goes as far back as 2010 when FB moved it rights to Ireland as part of a maneuver to reduce its tax payments.

The IRS believe that Ernst & Young, the accounting firm that valued the assets in this transfer, may have “understated” the worth of these intangibles by “billions of dollars,” according to the legal filing provided to CNNMoney.

“We do not agree with the position of the IRS and will file a petition in the United States Tax Court challenging the Notice,” Facebook said.

Nina Wu Stone, with the IRS, said that she issued six summonses last month for Facebook to produce records related to the asset transfer and they did not comply.

Facebook has not received a seventh summons and has not responded either.

Don’t mess with Uncle Sam. He doesn’t care who you are, even Facebook.

 

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