Facebook Must Answer for Ignoring IRS

Facebook Inc. has been ordered by a federal magistrate to explain why it snubbed seven IRS summonses demanding information on how the company transfers rights from its worldwide business through Facebook Ireland.

On Friday, Magistrate Judge Laurel Beeler ordered Facebook to appear in court November 17 to show why it has not complied with the IRS request for information.

The IRS petitioned with court last month to order Facebook to cough up the information. The IRS is examining Facebook’s federal tax liability for 2010 and in particular, agreements between the California parent of the social media giant and its Irish subsidiary.

Facebook has shifted some of its tax liabilities through the Ireland subsidiary, which allowed it to take deductions that cut its taxes to other governments, according to court records.  In 2014, the company’s U.K. unit earned nearly £80 million in revenue but paid £4,000 taxes, according to U.K. financial filings.

Case: U.S. v. Facebook, No. 16-cv-3777


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