The tax dispute of Facebook that had been running for a long-time with the IRS has finally reopened this month after a prolonged deferment occurred as a result of the Coronavirus pandemic.
Facebook battling with the accusations of undervaluing its intangible assets
The social media giant is opposing the allegations imposed by the IRS that the company has reported undervaluing of intangible assets held by them, that was allotted to its Irish subordinate.
It is one of a string of most prominent cases in which the IRS is battling against multinationals over transfer pricing, the worth of assets moved within related corporate establishments.
Case scheduled to move back to San Francisco by early 2022
In Washington, The U.S. Tax Court had recently listened to five days of face-to-face witness and the case is all set to move back to San Francisco by the first quarter of the next year. However, the case targets only on 2010 tax returns filed by Facebook, the company has anticipated a loss which might be the cause of a total tax obligation of $9 billion in the neighborhood and along with that, there could be an additional liability to pay interests and penalties.
Opinion of Irina Pisareva and Loren Ponds on the Facebook Case
On the episode of the weekly Talking Tax podcast of Bloomberg law, they had a conversation with a couple of tax attorneys who are pursuing the Facebook case. The former majority tax counsel to the House Ways and Means Committee, Loren Ponds, is currently a member of Chevalier & Miller in Washington. A partner with Crowell & Moring LLP in New York, Irina Pisareva, has around 25 years of experience in guiding on transaction tax and cross-border tax problems.
Both of them leaped the Facebook case, how it differentiates from the most prominent loss of the IRS against Amazon.com Inc., and what can be the decision taken by the court upon this legal dispute which has been running for a long-time.
Listen to the Podcast by clicking on the link below