Facebook Is A No Show At 7th IRS Summons

Posted on

Most of us would be petrified to even get a summons, but social network giant Facebook has just missed its 7th IRS summons and failed to show up.

This is the seventh summons from the Internal Revenue Service demanding internal corporate records from Facebook on one of its offshore tax strategies, according to an IRS court filing.

The documents in demand “may be relevant to understanding Facebook executives’ internal views regarding the transferred intangibles, Facebook’s valuation with respect to third-party investors, Facebook’s valuation with respect to the sale of stock by Facebook employees, and valuation modeling with respect to acquired companies and, and thus may be relevant to determining the value of the transferred intangibles,” the IRS said in an amended declaration filed with the updated petition.

U.S. authorities are examining Facebook’s federal income tax liability for the period ending Dec. 31, 2010. This is to figure out whether the company understated the value of global rights for many of its intangible assets outside the U.S. and Canada that it transferred to a subsidiary in low-tax Ireland.

The IRS began examining Facebook’s 2010 tax filing in January 2013 when tax officials said in a previous filing that a “problematic” approach may have been used to value the property.

Disclaimer: We have no position in Facebook Inc. (NASDAQ: FB) and have not been compensated for this article.