Facebook Sued for $9 Billion by Internal Revenue Service After Shifting Profits for Ireland
Facebook is set to be sued for $9 billion by the Internal Revenue Service, which accuses the company of undervaluing intellectual property it transferred to Ireland in an effort to avoid compliance with American tax rules.
The IRS is accusing Facebook of significantly undervaluing the cost of intellectual property it transferred to an Irish component of its company in 2010. They’ll make their argument before a San Francisco judge later this month.
Facebook expects the litigation to be settled in a matter of weeks. It’s probable that the proceedings will end with a settlement in which the Silicon Valley social media behemoth will agree to pay a portion of the back taxes it owes as a result of the 2010 tax haven move. Leading employees of the company, including Chief Technology Officer Mike Schroepfer, are expected to testify in the proceedings.
Major Silicon Valley corporations regularly shift the most profitable elements of their businesses to tax havens such as Ireland and the Cayman Islands. Other companies such as Amazon and Apple utilize Ireland as a haven to considerable effect, avoiding paying billions of dollars in American taxes as they enjoy free access to the incredibly lucrative American consumer market.
Those among conservative and libertarians who subscribe to the “Taxation is theft” meme should consider the implications of such a blanket statement. America’s wealthiest companies have no problem with taxation and public infrastructure- in fact, they’re planning on having you pick up their tab while they game the system’s rules.