The IRS is suing Facebook for US$9 billion, saying the company kept profits in subsidiaries based in Ireland.
The IRS argues that Facebook understated the value of the intellectual property it sold to an Irish subsidiary in 2010 while building out global operations, a move common among U.S. multinationals…Under the arrangement, Facebook’s subsidiaries pay royalties to the U.S.-based parent for access to its trademark, users and platform technologies. From 2010 to 2016, Facebook Ireland paid Facebook U.S. more than $14 billion in royalties and cost-sharing payments, according to the court filing.
If the IRS succeeds this would be one of Facebook’s biggest fines.
Check It Out: IRS Sues Facebook for $9 Billion Over Offshore Profits