The Internal Revenue Service has gone to court to face Facebook to cooperate with its investigation into the transfer of assets to an Irish subsidiary. The probe, first detailed on CNN Money, is examining whether Facebook understated the value of property it transferred to its subsidiary in Ireland in order to escape tax payments in the U.S.
The IRS alleges the assets were undervalued by billions of dollars.
Facebook follows other tech firms in being accused of squirreling assets in tax-friendly countries such as Ireland in order to escape paying American corporate tax.
The transfer was made back in 2010, but Facebook hasn’t been much help. Federal investigators have issued six summonses for records related to the transfer, but the company hasn’t complied with any of them.
Time is running out for Facebook – and the IRS. The statute of limitations in the case, CNN found, is due to expire at the end of July. Once that happens, the IRS’ options may be limited.