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Facebook Ignores IRS for a Seventh Time

Facebook Ignores IRS for a Seventh Time

Facebook officials failed to answer an IRS summons seeking internal corporate records on one of its offshore tax strategies, according to Bloomberg BNA. It was the seventh consecutive time the internet giant simply ignored the IRS demand for internal records that prove the company’s transfer of assets to its Ireland subsidiary was done legally.

Bloomberg reports American authorities are looking into Facebook’s tax liability in 2010; specifically, they want to know if the company lowballed the value of global rights to intangible assets it transferred to the Irish subsidiary. If that was the case, Facebook could allocate web-based income to the low-tax subsidiary, instead of the U.S.

The corporate income tax rate in Ireland is 12.5 percent, in contrast to the 35-percent rate here.

The IRS had demanded company officials provide records and other documents that could be relevant to the corporate decision for the transfer and valuation.

Bob Williams

Forget genes; I’ve got words in my DNA. Communication has been part of who I am nearly all my life. From a long career in radio news to another one in newspapers – and a University of Georgia journalism degree sandwiched between the two – language has been my life. I’ve also been fortunate to have learned the tax business from the ground up here at Drake, starting with 1040.com online forms some years ago before moving on to work on the Web. In all things tax-ish, we aim to give you tools you can use.