Social media giant Facebook is being investigated by the Internal Revenue Service over the value of intangible property it transferred to a unit in Ireland, according to published reports.
CNN Money and Law.com reported that on Wednesday the Justice Department filed a petition to force Facebook to comply with the investigation into whether the company significantly undervalued the assets, which include worldwide rights to some of its businesses.
According to the DoJ petition, the IRS investigation concerns the company’s federal tax liability for calendar 2010, when the transfers took place, and the IRS had send issued summonses to Facebook on June 1, 2016, requiring the company to bring in certain records and data to an examination on June 17, which it failed to do.
In a statement, a Facebook spokesperson said, “Facebook complies with all applicable rules and regulations in the countries where we operate.”
The report noted Big Four firm Ernst & Young had valued the assets in question, and that the IRS believed that the firm may have understated their value by billions of dollars.
