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>The IRS claims Facebook’s tax adviser Ernst & Young LLP undervalued the company’s property as it was transferred to Facebook Ireland Holdings Ltd. by evaluatin
by rm999 10y ago
>The IRS claims Facebook’s tax adviser Ernst & Young LLP undervalued the company’s property as it was transferred to Facebook Ireland Holdings Ltd. by evaluating pieces of the online platform separately, according to court filings ... “I don’t think Facebook is necessarily hiding anything, but it’s a fight over pricing,” said Stephen Hamilton, a tax lawyer in Philadelphia. “This is what companies do when they transfer their own assets; they try to value them as low as possible and when the issue is litigated, they usually end up somewhere in the middle."
It's kind of sad that a team of E&Y accountants and lawyers have probably added more "value" to Facebook by playing this legal tax evasion game with the IRS than an entire team of developers and product managers adding a big new feature.
- tn13 10y agoAccountants and Lawyers end up doing value addition because government regulations are far too complex.
- hiou 10y agoNope. Accountants and Lawyers end up doing value addition because corporations like Facebook take things to the legal gray border of the regulations. The whole double irish is barely useful if you give your assets fair market value. Don't be so gullible to believe this needed to be complex.
- ErikVandeWater 10y agoAccounting and law firms hire lobbyists to persuade the government to make the law more complex. This is value destruction.
- sp332 10y agoThe only reason for Facebook to move assets to Ireland is to take advantage of more complexity in the interactions of multiple legal systems instead of sticking with the relative simplicity of one.
- wyager 10y agoI'm not sure why you put value in scare quotes. By avoiding excessive US taxes, Facebook is now a more efficient company. That is how taxes work. The government introduces friction into economic transactions, which sucks up some amount of productivity from those who produce value, which the government can then use for its own ends. By moving to a country with more reasonable taxes, Facebook's economic interactions now have less friction and higher efficiency.
- billyhoffman 10y agoThis has nothing to do with taxes or business efficiency. The IRS is saying that Facebook undervalued their assets when transferring them to Ireland. It's the implications of that deal that are being discussed
- sp332 10y agoThis is 100% about taxes. The only reason the IRS cares about valuing assets is for the amount of tax they can levy on them. And saving $5B sounds darn efficient to me.
- jsprogrammer 10y agoIt is stealing, if it was intentionally undervalued to avoid a tax.
- jonhankok 10y agoDo you consider it stealing if a bakery takes back bread that was stolen from their store? Taxes are theft by force. Try to skip paying and see how quickly the authorities steal it straight out of your accounts.
- edanm 10y agoYou're using the word "theft" in a way that's unlike what almost anyone else means. And you're trying to convey a complex philosophical point in two sentences by doing it.
- branchless 10y agoE&Y denies yet another country tax income. When are govts going to blacklist these guys from govt contracts? The UK was supposed to be excluding such companies.
- ciaran0 10y agoIreland has nothing to do with the UK.
- unabst 10y agoYes, but without those developers there would be no facebook :) (pat yourself on the back)