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IRS is investigating Facebook over its assets in Ireland

IRS is investigating Facebook over its assets in Ireland


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Facebook is being investigated by US tax authorities over whether the company has possibly undervalued its asset transfers to its Irish subsidiary by billions of dollars. first reported the news of the investigation.

The investigation is part of an examination of Facebook's federal income tax liability in 2010. According to, the IRS says that Facebook's outside accountants valued the company's various intangibles (such as its user base and online platform) as standalone assets during the transfer to Facebook's Irish subsidiary, while Facebook employees value these as "interdependent."

As the Financial Times points out, investigations around transfer pricing aren't uncommon. Apple, Microsoft, and Amazon have all been probed by the IRS over tax issues in foreign countries.

The issue here appears to be that Facebook has not yet complied with six requests from the IRS for more financial information around its asset transfers in Ireland. The IRS has demanded that Facebook deliver the records by June 17th, and lawyers with the Justice Department's tax division have filed a petition to compelling Facebook to respond.

In a statement to The Verge a Facebook spokesperson said, "Facebook complies with all applicable rules and regulations in the countries where we operate."