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People looking at their personal income tax return: Woah, this is more complicated than I expected - should probably pay a professional accountant to sort this

People looking at their personal income tax return: Woah, this is more complicated than I expected - should probably pay a professional accountant to sort this out for me People reading news articles like this: Look at these stupid professionals arguing about how international tax law in the $XB range when one side is so obviously wrong, and the correct outcome is really straight forward.

mdszy 7y ago
It's almost like the expectation that companies pay proper taxes to the countries they exist in IS pretty straight forward.
- pbalau 7y ago
  But really is not, since FB exists in US, UK, Ireland, Israel, France and many other places (see [0]). And not all the value was created in the same place. You could have (and I know examples) a piece of tech being developed in US and not make any money until a team in London picks it up, tweaks the crap out of it and makes some millions. And you need to note that engineers in London are employees of Facebook UK, a different legal entity than Facebook US. Then there are sales and solutions (custom tech built for various customers). The point is, attributing wealth to a particular area is not that clear cut. And I guess this is what this lawsuit is all about, figure out how to do that. [0] https://www.facebook.com/careers/locations/ https://www.facebook.com/careers/locations/
  - ska 7y ago
    While this is clearly true in general, it's exceedingly unlikely that attributing wealth mostly in the places where it is taxed less is really supported by the types of interactions you are talking about. International development is complex, sure, but let's not pretend particularly with respect to Ireland that corporate structuring for tax avoidance isn't actually most (by $, not effort/people) of what is going on in practice.
jjoonathan 7y ago
If a professional accountant told my buddy to do one weird trick to completely eliminate the lion's share of his tax liability, and he did it, and then the IRS went after him, I'd feel entirely comfortable judging both my buddy and his accountant, even if I didn't know the precise details.
- AnthonyMouse 7y ago
  Then you'd be judging a lot of people wrongly, because that sort of thing happens all the time for entirely legitimate reasons. For example, at various points there have been federal tax credits for installing solar panels on your house or buying certain types of green cars. For a lot of people the credit would exceed their federal tax liability for the year. You're prepared to send them all to jail for that without looking at the details?
  - three_seagrass 7y ago
    I think by implying that the IRS went after them, the "weird trick" was not as legal as previously anticipated, despite being guidance from a professional. Appealing to popularity wouldn't make it anymore legal than appealing to professionalism.
    - AnthonyMouse 7y ago
      Using the event of prosecution as proof of guilt sure would streamline some things -- we wouldn't need independent courts anymore. Isn't this the plot to Judge Dredd?
    - JoshTriplett 7y ago
      > I think by implying that the IRS went after them, the "weird trick" was not as legal as previously anticipated, despite being guidance from a professional. That's about as legitimate as "the police investigated them, so they must have done something wrong". That kind of argument has huge problems.
      - 7y ago
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- Karunamon 7y ago
  The problem with that evaluation is that credibility can only rightly be evaluated by author, not by publication, and unless we're talking about scientific journals (and sometimes not even then), editors can't be expected to be subject matter experts in everything a paper ever writes about. Example: Bloomberg is still a legitimate business paper of record despite running that unfounded story about backdoored motherboards. I'd take anything those authors put out with a shaker-full of salt in the future, but Bloomberg is still legitimate.
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ForHackernews 7y ago
I'm sure Facebook just got confused and didn't look at the details to realize that it didn't make sense for the lion's share of their profits worldwide to come from Ireland. I mean, it's well known that there are leprechauns with massive pots of gold in Ireland, so it's easy to assume they might be an extremely lucrative market for targeted ads for rainbow-dissipaters. If not for the complicated tax code, I'm sure they'd have happily paid more tax.

mdszy 7y ago

It's almost like the expectation that companies pay proper taxes to the countries they exist in IS pretty straight forward.

pbalau 7y ago
But really is not, since FB exists in US, UK, Ireland, Israel, France and many other places (see [0]). And not all the value was created in the same place. You could have (and I know examples) a piece of tech being developed in US and not make any money until a team in London picks it up, tweaks the crap out of it and makes some millions. And you need to note that engineers in London are employees of Facebook UK, a different legal entity than Facebook US. Then there are sales and solutions (custom tech built for various customers). The point is, attributing wealth to a particular area is not that clear cut. And I guess this is what this lawsuit is all about, figure out how to do that. [0] https://www.facebook.com/careers/locations/ https://www.facebook.com/careers/locations/
- ska 7y ago
  While this is clearly true in general, it's exceedingly unlikely that attributing wealth mostly in the places where it is taxed less is really supported by the types of interactions you are talking about. International development is complex, sure, but let's not pretend particularly with respect to Ireland that corporate structuring for tax avoidance isn't actually most (by $, not effort/people) of what is going on in practice.

jjoonathan 7y ago

If a professional accountant told my buddy to do one weird trick to completely eliminate the lion's share of his tax liability, and he did it, and then the IRS went after him, I'd feel entirely comfortable judging both my buddy and his accountant, even if I didn't know the precise details.

AnthonyMouse 7y ago
Then you'd be judging a lot of people wrongly, because that sort of thing happens all the time for entirely legitimate reasons. For example, at various points there have been federal tax credits for installing solar panels on your house or buying certain types of green cars. For a lot of people the credit would exceed their federal tax liability for the year. You're prepared to send them all to jail for that without looking at the details?
- three_seagrass 7y ago
  I think by implying that the IRS went after them, the "weird trick" was not as legal as previously anticipated, despite being guidance from a professional. Appealing to popularity wouldn't make it anymore legal than appealing to professionalism.
  - AnthonyMouse 7y ago
    Using the event of prosecution as proof of guilt sure would streamline some things -- we wouldn't need independent courts anymore. Isn't this the plot to Judge Dredd?
  - JoshTriplett 7y ago
    > I think by implying that the IRS went after them, the "weird trick" was not as legal as previously anticipated, despite being guidance from a professional. That's about as legitimate as "the police investigated them, so they must have done something wrong". That kind of argument has huge problems.
    - 7y ago

deleted 7y ago

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Karunamon 7y ago
The problem with that evaluation is that credibility can only rightly be evaluated by author, not by publication, and unless we're talking about scientific journals (and sometimes not even then), editors can't be expected to be subject matter experts in everything a paper ever writes about. Example: Bloomberg is still a legitimate business paper of record despite running that unfounded story about backdoored motherboards. I'd take anything those authors put out with a shaker-full of salt in the future, but Bloomberg is still legitimate.

deleted 7y ago

[deleted]

ForHackernews 7y ago

I'm sure Facebook just got confused and didn't look at the details to realize that it didn't make sense for the lion's share of their profits worldwide to come from Ireland. I mean, it's well known that there are leprechauns with massive pots of gold in Ireland, so it's easy to assume they might be an extremely lucrative market for targeted ads for rainbow-dissipaters. If not for the complicated tax code, I'm sure they'd have happily paid more tax.