IRS Is Suing Facebook Over Asset Transfers In Ireland (fortune.com) 97
An anonymous reader quotes a report from Fortune: The Internal Revenue Service (IRS) has sued Facebook on Wednesday to force it to comply with summonses related to a 2010 asset transfer. Fortune reports: "According to documents the IRS filed in San Francisco federal court, the agency suspects Facebook and its accounting firm, Ernst and Young, understated the value of intangible assets transferred to Ireland by billions of dollars. The IRS says it is seeking an order to enforce six summonses that asked Facebook to appear at the agency's offices in San Jose, Calif., and to produce papers and others records. According to IRS agent Nina Stone, Facebook failed to show up at the appointed date of June 17, and nor did it provide the documents. The dispute arose as a result of an ongoing audit of Facebook by IRS that stretches back to 2010. In that year, the company chose to designate Facebook Ireland as the rights-holder for its worldwide business outside of the U.S. and Canada, and also to transfer intellectual property assets such as its platform and 'marketing intangibles.' The crux of the disagreement between Facebook and the IRS turns on the arcane question of whether the assets in question could be transferred in their entirety or if, as the agency argues, they are 'interdependent.' [The agent's declaration can be found here.] Such arrangements are common among U.S. tech companies, and seek to reduce tax payments by scoring revenue in low tax jurisdictions like Ireland, while having higher tax countries (especially the U.S.) reduce profits by paying to license intellectual property from overseas subsidiaries."
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Re: Imagine that... (Score:1)
Maybe it is time to lower the us corporate tax rate to a realistic level to avoid this ?
Re: Imagine that... (Score:5, Insightful)
Those poor oppressed corporations! That mean nasty government! How dare the government demant FB pay its fair share...
Re: Imagine that... (Score:4, Interesting)
Legal does not equal fair (Score:4, Insightful)
This seems to be a case of Facebook going one step too far (and they deserve to be hunted down for it), however current laws mean for the most part their fair share is SFA or Zero.
I completely disagree that "fair share" equals what they are legally obligated to pay. Just because they found a clever loophole in the tax law doesn't mean what they are doing is fair or right. Just because what Facebook does complies with the law doesn't make it right. Or to use an extreme example are you arguing that things like Jim Crow [wikipedia.org] were fair because they complied with the law of the day? Because that is basically what you are arguing (legal = fair = right). Sometimes the laws are poorly written but that doesn't make the law fair or compliance with the law right. All it really means is that if they are doing something legal but wrong that we should change the laws to outlaw it in the future.
tax laws need to change, lower corporate laws with harsher and stricter rules for moving assets offshore would help to fix this. It is far better to get 10% of billions than 30% of nothing.
Agreed that the tax laws need to change. Particularly the bits relating to transaction locations, locating intangible property, and probably taxation as a function of gross receipts instead of profits for multinational corporations. If a company finds it worthwhile to devote a large staff towards finding convoluted ways of minimizing their tax burden then something is clearly amiss with the tax laws.
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If people were allowed to keep their stuff more, they wouldn't try to move it overseas.
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Those poor oppressed corporations! That mean nasty government! How dare the government demant FB pay its fair share...
There's nothing "fair" about what the ridiculously large mafia-style variable-rate kickbacks the IRS and US government is attempting to extract from enterprises and members of the public.
I say kudos to Facebook, and any company who manages to still exist in the US and provide jobs and valuable goods and services without being raped by the IRS.
Unfortunately, the mafiaaIRS is powerful,
Just say you don't like taxes (Score:5, Insightful)
There's nothing "fair" about what the ridiculously large mafia-style variable-rate kickbacks the IRS and US government is attempting to extract from enterprises and members of the public.
That's a rather tortured way of saying you don't think they should be obligated to pay taxes. Why not just come out and say it?
I say kudos to Facebook, and any company who manages to still exist in the US and provide jobs and valuable goods and services without being raped by the IRS.
So as a taxpayer I'm supposed to be ok with picking up the tax burden that Facebook is dodging because they found some sneaky loophole to get out of paying their tax bill? Maybe you're fine with that but I'm not. I don't give a shit if what they did is legal or not. We have a $17 TRILLION national debt and I think it's quite appropriate that Facebook help out with that. They enjoy the benefits of being a US corporation without the responsibilities.
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That's a rather tortured way of saying you don't think they should be obligated to pay taxes. Why not just come out and say it?
And "How dare the government demant FB pay its fair share..." is a rather tortured way of saying you think they should have to pay more taxes to the US for profits made overseas.
Money laundering by any other name (Score:2)
And "How dare the government demant FB pay its fair share..." is a rather tortured way of saying you think they should have to pay more taxes to the US for profits made overseas.
It's called sarcasm. Chuckle more. It's good for the soul. You don't have to agree with it.
But seriously, arguing that those profits were made overseas is a very murky question. I'm an accountant so I ought to know. Facebook like many other companies has set up what amounts to a legal fiction regarding where profits were actually made. They set up operations in a country where they do basically no significant labor and have minimal assets and merely run the money through that jurisdiction. Arguing th
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Or maybe it's time to close the tax evasion loopholes, so corporations pay taxes like every person. They wanted to be treated like people, didn't they?
Landed Gentry (Score:1)
Interesting (Score:4, Interesting)
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Why should this hurt them? Is any of that "negative press" negative for their customers? Did the private data they harvest and deal in somehow become tarnished or invalidated? Did the value of that data somehow diminish? If not, then how should this hurt them?
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The larger the amount owed the more money they will be willing to spend on lawyers to avoid paying it, and thus the harder to becomes to collect.
The trick is to create a legal system that reduces the power lawyers have to increase costs, drag things out and argue over points of law. To make it fair the best option is to have the tax authority made available to clear up any ambiguity in the rules. If there is any doubt you ask them and pay what they tell you to, and if you disagree you can argue it in court
Zuckerberg (Score:2)
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I'm confused (Score:2, Insightful)
I thought that tech companies, like Facebook and others, leaned toward supporting Democrats. The Democrats constantly crow about how the rich aren't paying their fair share when it comes to taxes. If Facebook's executives are so committed to the cause, then why all the accounting chicanery? Why not leave the assets in the US and pay their "fair share" of taxes? Or do moves like this imply that the US tax rate is too high? So confusing ...
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Zuckerberg is a liberal. He gives big money to people with D's at the end of their names. He also supports liberal groups, notably (for the Slashdot audience anyway) FWD.us, an open borders and pro-H1B group.
None of that is an attack on Zuckerberg. He can vote for whoever he wants and use his money to support whoever he wants. It's simply inaccurate to call him a conservative.
As for the Keystone Pipeline being at risk of creating an environmental disaster, not even
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Zuckerberg is a liberal. He gives big money to people with D's at the end of their names.
These two statements are sharply contradictory.
As for the Keystone Pipeline being at risk of creating an environmental disaster, not even the EPA belives that. There's pipelines all over the place.
Yes, and most of them are environmental disasters. What's the statistic? In normal operation, African pipelines commit a Valdez every year? We have the technology to build double-walled pipes with leak monitoring which essentially never leak (see: chip fabs) but that would cost money so we don't do it with oil. Fuck the environment, anyway.
Also, burning fossil fuel is an environmental disaster all on its own, so there's really no defending oil pipelines no matt
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Much better than the environmental disaster of shipping the same oil over rail as has been happening. This is the reason for all the recent oil train derailments, which have been causing all sorts of environmental harm. Any environmentalist who doesn't support pipelines really should turn in their environmentalist cards, as they aren't in favor of protecting the environment at all.
Pipelines > oil transport over rail.
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What kind of name is "Zuckerberg" anyway? When I'm president, I'm going to deputize him with that fancy six-pointed star from the Frozen coloring book, which is in no way a Star of David, no siree. A big yellow one that he'll have to wear on his stupid Zuckerberg t-shirt. Because who is Zuckerberg anyway? I don't even know who he is, because he's just a stupid loser. And that wife of his, I mean, what's that al
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This is the third time today I've seen you bitching about that meme on Slashdot, and IIRC, none of the three threads had anything to do with Trump. There's plenty to oppose the man
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That's right, we're both smart - very very intelligent - and have all the best words. And we're both going to #MAGA.
Re:I'm confused (Score:4, Insightful)
Democrats do lean towards supporting tech companies. Not sure if you've seen the ACTUAL Dem platform - more H1B, attaching green cards to foreign students' diplomas, fewer taxes on the tech industry. The only people the Dems want paying taxes is the Republicans, not big companies but the middle and lower middle class that pays 95% of the taxes in this country.
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As a green card owner, the first several years (as long as you have the accent) your wages will be depressed, your employer has to jump through hoops (although minor) to file paperwork with DHS and you can't engage just about any job - jobs with security clearance (a lot of government, military and other contracts) or with extensive out-of-country travel is out of reach.
Vote left (Score:2)
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Bernie lost and Obama isn't all that left leaning imho.
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So, since Hillary is more right wing than Trump, who would we vote for in your world?
https://www.politicalcompass.o... [politicalcompass.org]
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The current Democrats are the old Republicans with yoga pants and social justice cause "likes" on Facebook.
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Cuckerberg just wants to see *YOU* get screwed.
Unpossible (Score:3)
No way, I simply cannot believe that a giant, faceless, mega-rich company like Facebook would play fast and loose with the books.
Next you'll tell me that Anna Nicole didn't marry for love!
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She married for the same reason Melania married. Because they get their minks the same way minks get minks.
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Because they get their minks the same way minks get minks
I don't get it; is that some kind of yo-dawg joke or something?
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I don't get it; is that some kind of yo-dawg joke or something?
Think, my friend...how do most women get their minks, and realize that's how minks get minks.
asked Facebook to appear at the agency's offices (Score:1)
You think they can cram all those people in there?
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We should at least try.
Good. (Score:1)
I'm sorry, but Facebook is an American corporation and should be paying taxes to the IRS. You want to pretend you're a foreign entity, you want to do your Irish Double Dutch Sandwich bullshit, don't be surprised when the piper comes calling. Everyone knows your income is being earned in USA.
If you feel you're a foreign corporation, fine, surrender your big California headquarters and go live in Dublin, Zuck. See how that works out for you.
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Even better - regardless of where your headquarters are, if you make profit in a country with rules of law, stable government, etc. then you should pay that country's taxes on that profit.
Why exactly should they get double taxed when they bring their (locally taxed) foreign earned income back to the US then?
Where was the profit made? (Score:3)
Even better - regardless of where your headquarters are, if you make profit in a country with rules of law, stable government, etc. then you should pay that country's taxes on that profit.
This exactly illustrates why companies are able to get away with this crap. It is fairly trivial for an internet company to put the assets that are responsible for the profit in a different country and voila, the profit was made there and not here. If the customer in the US and the server is in France, the company is based in Ireland and the money is exchanged in Costa Rica, where was the profit made? This is not a trivial problem. Where profit is made is not as simple a concept as it seems and I'm a ce
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I agree and I think it's not just the USA that's fed up with this technique.
I expect taxes will be gathered based on the location of the transacting individuals. i.e. if you see an ad while sitting in texas, you can expect to pay both texas and federal taxes on your profits. And fake franchising fees are not going to stand much longer.
It would be too much to hope they would put some of these people in prison. But that's the way to fix it. Put Zuckenburg and several of his executives in federal prison (o
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I would've said to harvest his organs so a human being could be saved, but we can start small first if we have to.
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I would've said to harvest his organs so a human being could be saved, but we can start small first if we have to.
A human would probably reject his organs, or turn into a serial killer or something...
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Of course you must not use the brain. Or the hair. Let Trump be a warning to the world!
Tax laws and constraints (Score:2)
I expect taxes will be gathered based on the location of the transacting individuals.
While it's probably the most elegant solution in theory, the challenge in that is that it runs afoul of innumerable existing tax laws and practical constraints. If I live in Ohio and I buy something from XYZ.com in Washington, the State of Washington is not allowed to tax me in Ohio and even if they were they have no mechanism to collect those taxes. It's even worse internationally because the US cannot collect taxes from a citizen of Ireland thanks to sovereignty. And for a company like Facebook they ar
That's business (Score:3)
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The UK is much more civilised. No need to bend the rules, you just take the head of the tax authority to an expensive restaurant and explain that you aren't going to pay more than a token amount this year and perhaps next year you will include a post-dinner trip to an exclusive Soho club.
Did Tech's Tax Shenanigans Contribute to Brexit? (Score:2)
1. Facebook paid no UK corporation tax in 2012. [telegraph.co.uk] 2. Google's UK tax deal is a joke at our expense. [theverge.com] 3. Microsoft pays no UK tax on £1.7bn of online revenues. [telegraph.co.uk] 4. Apple pays just £12m UK tax on £2bn profit. [dailymail.co.uk]
Wrong TLA for the job (Score:2, Funny)
Its the IRA that has jurisdiction in Ireland, not the IRS
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Not to mention that the IRA at least has the decency to give you a reason for blowing you up.
this gave me a smile (Score:4, Funny)
watching two entities fight, neither of which are my friends, provides interesting entertainment.
its also the only time I could imagine wanting the the IRS to win ;)
there must be a german word for this (is there?)
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https://en.wikipedia.org/wiki/Schadenfreude
This is the German word you're looking for, except in this case, it's for BOTH sides!
IRS Suing Facebook. (Score:1)
Fake AND Gay.
Facebook is the least of the concerns facing tax evasion, such as the Clinton foundation for one.
Try suing one of your untouchables there IRS and see how that works out for ya.
Mighty Big Coincidence... (Score:1)
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Why hasn't this happened to Google, Apple, etc. (Score:2)
I've wondered forever why this hasn't happened to all of the major companies. Clearly they all have done such gross undervaluation of corporations IP assets, otherwise it wouldn't avoid any taxes for them.
Perhaps licensing is the issue (Score:1)