Facebook is getting sued by the IRS for not paying $9 billion in taxes
On 18th February, a lawsuit between Facebook and the IRS kicked off, with the tax authority suing the social media giant for allegedly undervaluing its intellectual property and avoiding $9 billion in tax payments. The trial could take up to four weeks.
A number of senior executives from Facebook have been summoned as witnesses, including their chief revenue officer David Fischer, CTO Mike Schroepfer, and head of hardware Andrew Bosworth. Notably, CEO Mark Zuckerberg was not called in.
The case developed after the IRS claimed that Facebook's handed over some of its intellectual property to a subsidiary in Ireland to reduce tax bill. Between 2010, when the handover took place, and 2016, Facebook Ireland paid its parent company close to $14 billion.
Facebook hit back saying that since they didn't have mobile advertising revenue and because their international business was also just starting up, there was sufficient risk involved in the 2010 IPO handover. They are standing by their 2010 valuation.If the IRS does win the case, however, Facebook could be made to pay over $9 billion, including interest and penalties.
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