According to Bloomberg, the Internal Revenue Service filed a petition on 6 July in San Francisco federal court seeking documents and records from Facebook for the 2010 tax year, claiming that the social media giant missed a deadline last month to hand over the information. During 2010, Facebook giant moved the global rights for many of its intangible assets to a subsidiary in low-tax Ireland and IRS claims that the company understated the value of those assets by billions of dollars for tax purposes.
Facebook ‘complies with all applicable rules and regulations in the countries where we operate,’ spokeswoman Bertie Thomson told Blomberg in a statement.
Tighter scrutiny
The petition is the latest evidence that the agency is applying new, tighter scrutiny to large IP-driven companies. It announced in 2013 that it would begin seeking court orders if companies didn’t hand over documents requested during audits, with Laurence Bambino, co-head of the global tax group at Shearman & Sterling in New York commenting: ‘It appears to be one of the first instances where they’re seeking to pursue the enforcement remedy.’
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