Bloomberg reports that the IRS investigation is related to Facebook's headquarters in Ireland. The IRS asked a federal magistrate judge in California to force the company to turn over detailed internal corporate records related to the value of the assets moved to Ireland. They included all operations outside the US and Canada.
The IRS claims Facebook’s tax adviser Ernst & Young undervalued the company’s property as it was transferred to Facebook Ireland Holdings by evaluating pieces of the online platform separately, according to court filings. However, Facebook employees told the IRS that the property was "interdependent", and that "it would be difficult to isolate one from the other", the government said.
The statute of limitations for the IRS to continue requesting documents was set to lapse on 31 July. By serving Facebook with the tax bill, the IRS can continue its court fight.
