Facebook continues fight over US taxes after Ireland move
Facebook assigned a base value to the transferred assets in 2010 of $5.8 billion, not including intellectual property, while the IRS estimate is closer to $13.9 billion
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San Francisco: Facebook Inc. is carrying on its fight with the US Internal Revenue Service over taxes relating to its transfer of global operations to Ireland in 2010 even as the social media giant pledged cooperation with the government’s investigation.
The company is prepared to comply with seven “extraordinarily broad summonses” demanding information “about virtually every aspect of Facebook’s core business,” but needs more time to do so, it said in a filing Tuesday in San Francisco federal court.
The dispute stems from that IRS’s claims that Facebook’s tax adviser Ernst & Young LLP undervalued the company’s property as it was transferred to Facebook Ireland Holdings Ltd by evaluating pieces of the online platform separately. Facebook assigned a base value to the transferred assets in 2010 of $5.8 billion, not including intellectual property, while the IRS estimate is closer to $13.9 billion, according to a filing Tuesday in the Washington-based US Tax Court.
Facebook has estimated the value of its future liabilities in the case at $3 billion to $5 billion.
Facebook denied that it failed to respond to US summonses involving a tax bill springing from its move of global operations to Ireland in 2010.
“During the audit, Facebook produced thousands of pages of documents in response to more than 200 IRS requests, voluntarily extended the statute of limitation five times, and made employees available for interviews,” the company said in a filing in San Francisco.
IRS representatives in Washington and San Diego weren’t immediately available for comment on Facebook’s filings.Bloomberg