Facebook Tax Bill Over Ireland Move Could Cost $5 Billion
- IRS issues notice for 2010 tax year over operations transfer
- Facebook plans to challenge notice in federal tax court
Here's Why Facebook Might Owe $5 Billion to the IRS
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Facebook Inc.’s future cash flows and results could suffer a major blow if it loses a battle over new U.S. tax liabilities related to the transfer of its global operations to Ireland in 2010.
The Internal Revenue Service delivered a notice of deficiency to the social media giant Wednesday for $3 billion to $5 billion, plus interest and penalties, based on the agency’s audit of Facebook’s transfer pricing, the company said in a regulatory filing Thursday. Facebook, which plans to challenge the notice in federal tax court, said its balance sheet could suffer if it’s held liable.