Facebook To IRS: Refund Me, I’m Irish!
Long-time Slashdot reader theodp writes: Among the methods featured in a 2012 City Pages story on The 10 Most Corrupt Tax Loopholes was pretending to be Irish. Chris Parker wrote, “Most people associate such exhaustive money-laundering with drug cartels. But it’s now standard practice at firms like Eli Lilly, Google, Microsoft, Pfizer, and Facebook. The only difference is that when drug dealers do it, the government shows up with Kevlar and automatic weapons instead of a refund check.”
The WSJ studies that Facebook and the Internal Revenue Service will sq. off in a U.S. Tax Court case subsequent week (alt supply) that would price the social-media big greater than $9 billion and form the federal government’s means to crack down on firms’ efforts to shift income to low-tax nations, capping off a nine-year dispute over how Facebook structured its worldwide operations. The IRS argues that extra of the corporate’s income ought to have been taxed at larger charges within the U.S., quite than within the firm’s Irish subsidiary. Facebook contends that it deserves a refund.
“Facebook Ireland and Facebook’s other foreign affiliates — not Facebook U.S. — led the high-risk, and ultimately successful, international effort to sell Facebook ads,” the corporate wrote in its pretrial memo. “Facebook Ireland is entitled to profits from the foreign business it built.” Countering that argument, the federal government quoted Chief Operating Officer Sheryl Sandberg as saying that Facebook needed to name Ireland its worldwide headquarters for “tax purposes.” While this tidbit did not discover its method into the why-Ireland assertion Sandberg provided in Facebook’s official Dublin HQ press launch, it does sq. with a press release made by former Microsoft CEO Steve Ballmer, who in a 2005 second of candor defined, “Corporate tax is part of the overall advantage of doing business in Ireland. It would be disingenuous to say otherwise.”