Facebook Being Investigated By The IRS

Posted: Jul 7 2016, 3:21pm CDT | by , in Latest Business News


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Facebook Being Investigated by the IRS
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The US Justice Department just filed a petition in court so that Facebook would be forced to comply with the ongoing IRS investigation about whether or not the company understated the value of its property transferred to an Ireland subsidiary. It did this as part of a complex system to reduce tax payments.

The issue happened all the way back in 2010, when Facebook shifted the rights for its worldwide business, excluding Canada and the US, to Facebook Ireland. The IRS believes that Ernst & Young, the accounting firm that was tasked with valuing the assets, may have "understated" how much they were worth by "billions of dollars" according to CNNMoney.

The IRS has worked on this case for years with limited cooperation.

Facebook did not comply to Nuna Wu Stone, an investigator with the IRS, when she asked them to produce records related to the transfer.

"Facebook complies with all applicable rules and regulations in the countries where we operate," a Facebook spokesperson said in a statement.

The Justice Department and the IRS declined to comment.

The Justice Department's suit comes just as the statute of limitations was set to expire.

"Even if the court acts quickly and Facebook produces the information immediately, it is unlikely the IRS will be able to analyze it by July 31," says J. Richard Harvey Jr., a law professor at Villanova. "Either Facebook will need to agree to extend the statute of limitations or the IRS will likely propose a very large audit adjustment."

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<a href="/latest_stories/all/all/46" rel="author">Noel Diem</a>
Noel passion is to write about geek culture.




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