Facebook has disclosed that it could owe billions due to an IRS investigation into the way it moved assets to an Irish subsidiary to avoid higher taxes.
The tax issue was first disclosed publicly three weeks ago when the U.S. Justice Department filed a lawsuit forcing Facebook to comply with the ongoing IRS investigation. No figures were provided at the time for possible penalties.
The investigation dates back to 2010 when Facebook shifted the rights for its worldwide business, excluding the U.S. and Canada, to Facebook Ireland as part of a complex maneuver to reduce its tax payments.
That transfer included certain hard to quantify assets like its “user base, online platform and marketing intangibles.”