When Sheryl Sandberg left Google to become Facebook’s COO, she set her sights on reducing the company’s tax burden. Facebook placed its international headquarters in Dublin in order to pay lower taxes. The Irish company setup by Facebook then claimed it had management in the Cayman Islands, allowing Facebook to avoid even the low Irish taxes. An IRS audit of Facebook has struggled due to budget limitations forced by Republican cuts. Nonetheless, the IRS has persisted, and Facebook could be forced to pay up to $9 billion in additional taxes if they lose in Tax Court.
Key Takeaways:
- In 2008, Sheryl Sandberg suggested moving Facebook’s operations to Europe in order to dodge high U.S. taxes.
- During the time that Facebook was growing, the IRS was shrinking thanks to the Republicans in Congress.
- It has been decades since the IRS has won a major case involving profit shifting.
“If the IRS prevails in court, it could cost Facebook up to $9 billion more in taxes, based on estimates in the company’s securities filings. It would be a notable defeat for a company that, when it comes to risky tax avoidance, has been more aggressive “than almost any other U.S. corporation”.”
Read more: https://www.propublica.org/article/whos-afraid-of-the-irs-not-facebook
