Facebook continues fight over US taxes after Ireland move

Facebook is carrying on its fight with the US Internal Revenue Service over taxes relating to its transfer of global operations to Ireland in 2010 even as the social media giant pledged co-operation with the government's investigation.

The company is prepared to comply with seven “extraordinarily broad summonses” demanding information “about virtually every aspect of Facebook’s core business”, but needs more time to do so, it said in a filing Tuesday in San Francisco federal court.

The dispute stems from IRS’s claims that Facebook’s tax adviser Ernst and Young undervalued the company’s property as it was transferred to Facebook Ireland Holdings Ltd by evaluating pieces of the online platform separately.

Facebook assigned a base value to the transferred assets in 2010 of $5.8 billion, not including intellectual property, while the IRS estimate is closer to $13.9 billion, according to a filing Tuesday in the Washington-based US Tax Court.

Facebook has estimated the value of its future liabilities in the case at $3 billion to $5 billion.

– (Bloomberg)