Hacker News

171

IRS Tactics Against Meta Open a New Front in the Corporate Tax Fight

by mitchbob1771937894187 comments
Differential pricing schemes are the primary way Corporations avoid corporate income taxes. I remember reading an article by an old Africa hand where he quoted the manager of an international corporation being exasperated with him and saying "You think I'm actually trying to make money here? This is all about taxes."

In theory overpaying for modules produced by your subsidiary, or overpricing IP, in a low tax country is illegal, at least in the US, but so much of that is subjective it's difficult for tax authorities to actually do anything unless the numbers are eggregious.

by laughing_man1771971451
I wrote about this 20 years ago:

http://digital-majority.wikidot.com/forum/t-5766/software-pa...

In the meantime, Ireland removed their 0% tax over patent royalties, but Holland kept it at 0%.

https://en.wikipedia.org/wiki/Double_Irish_arrangement

by zoobab1771949593
Corporation tax is so annoying, with so many r&d caveats etc. Just tax outflows.
by philipallstar1771961621
> contending the company lowballed the price of trademarks, customer agreements, software licenses and other rights it moved offshore

At the same time they were telling HMRC (the British tax authority) that IP rights, etc. were incredibly valuable and a significant cost of doing business (in the form of payments back to the mothership), and that's why they made very little profit in the UK and didn't need to pay much tax.

by masfuerte1771945561
If Corporates can offshore their IP I should be able to offshore my likeness and rent it back to myself to reduce my personal taxes.
by siliconc0w1771949637
> The agency is using real-world profit data to challenge how big companies value offshore intellectual property.

https://archive.ph/2026.02.24-124153/https://www.nytimes.com...

by mitchbob1771937894
> The agency has lost more than a quarter of its staff, withdrawn directives to auditors to crack down on aggressive tax shelters and permitted other auditing efforts to falter.

When you see a government doing this, you know they're not interested in collecting Tax from their rich buddies.

This case will sit in limbo for 20x years.

by bilekas1771944595
> I.R.S. auditors have been pursuing Meta for about a decade

Soon: "I.R.S. auditors have been pursuing Meta for about [a decade + length of current administration term]"

by mrbluecoat1771944653
> [The IRS] say the company failed to report roughly $54 billion in income and owes nearly $16 billion in back taxes and penalties.

That's... just not very much? The claim is that Meta's global ex-US income for the last 15+ years is less than a single year's US income? I really wonder how they came up with this number.

Disappointingly little detail in the article about how the IRS justifies the claim that the 2010 price was low (obviously, later profits would not be completely foreseeable at the time -- in 2010 Facebook was simply a much smaller business), or any detail about the 1986 law. It seems pretty farcical to retcon a purchase for being too cheap with evidence from 16 years later.

by loeg1771952186
Surely Zuckerberg's bribe check is in the mail already
by mcs52801771944995
Yes great, and our local governments are also focusing on going after US persons who decide to register their vehicles in Montana and transfer ownership rights to LLC for privacy reasons. "Tax evasion" is the only legitimate use of that, they say, only to the small man of course.
by mannanj1771956446
IRS Tactics Against Meta, Opens a New Front in the Corporate Tax Fight

There. I fixed it for you. Now you have a meaningful headline

by wawaWiWa21771953542
One thing I'd love the US to do was something that happend in Germany ~2015, where they bought a lot of "Steuer-CD"s, with leaked info about people hiding money in offshore accounts. Then they allowed everyone to self report and applied more scrutiny to larger corporations which in total added several billions in revenue.
by persedes1771957336
by 1771957625
I wonder how much Meta wrote off with their Metaverse adventure
by raverbashing1771945132
IRS is using AI now too.
by amelius1771948794
Tax evasion is so pervasive at large companies that I have come to the conclusion that we need to start criminally charging the c-suite. Without personal consequences they're never going to change.
by josefritzishere1771946689
The less they tax corporations the more the burden will fall on income tax. These big multinationals have been defrauding countries worldwide for decades. The issue is at the core of the political turmoil we are experiencing.

I'd like to know how much less income tax would be, if we could tax multinationals properly.

by numbers_guy1771945621
[dead]
by techpulse_x1771945224
We cannot tariff our way out of debt by taxing consumption by individuals just needing to eat and live

Billionaires silo-ing massive wealthy beyond multiple lifetimes must pay their taxes

and Trillionaire corporations

Each state now has several Billionaires, there are almost 1,000 in the USA

They need to pay their damn taxes, a flat tax without deductions for everything over a million dollars of income per year

https://en.wikipedia.org/wiki/List_of_U.S._states_by_the_num...

https://worldpopulationreview.com/state-rankings/most-billio...

by ck21771946950
The agency has lost more than a quarter of its staff, withdrawn directives to auditors to crack down on aggressive tax shelters and permitted other auditing efforts to falter.

Remember the fear mongering ads [0] Republicans ran during the 2022 midterms about arming IRS agents to act as a shadow army to go after every day law abiding people? As it turns out, Republicans were just talking about their own plans for ICE. Remember, every accusation from Republicans is an admission. Additionally, they don't care about crime, as they are specifically turning a blind eye to rich people and corporations breaking the law.

0 - https://www.cbsnews.com/news/republicans-87000-irs-agents-mi...

by dfxm121771944818
With the way that Zuckerberg both kisses up to and has bribed the current administration by “settling lawsuits”, this won’t go anywhere.
by raw_anon_11111771944332
Solution (for big corp)?

Mega is big enough to buy entire islands, and be its own country. A corporate country. One with a very specific constitution, enshrining rights, but also?

No corporate taxes.

If done right, you could lure away Western judges, police, and more as they retire. Or retire early. You could lure them away not with high salaries, but with shorter work days, AI assistance, and with it being a tropical paradise.

Compared to the billions Meta would pay in taxes annually, this endeavour would be far cheaper. And citizens would still pay taxes, of course.

Now imagine if Google, Musk Corps, Meta, and others all created a consortium to do just this, and, to build and fund the initial island.

I agree, not fully plausible. But... these guys can do a lot of interesting things, and I think if it was truly a tropical paradise, and land and housing was cheap and aplenty, lots might be interested in moving there.

Certainly, hiring the "glue" of society would be easy. I know so many people who retire to third world nations, but anyhow...

Yes, holes but, maybe something to ponder.

Corporate towns have existed, why not corporate nations?

edit:

As I've said elsewhere, it's -20C outside my door, so a tropical paradise with cheap housing and flying cars, and AGI and beaches and free coconuts may be masking my thoughts a bit.

So downvote me, as you are. It burns, but by god it's -20C outside so that's just fine.

(warms hands over burning post)

by b1121771944900
This is one of those situations where I hope both parties duke it out to the maximum extent and completely obliterate each other.
by ceramati1771945127