Facebook and the IRS are currently facing off in a $9 billion dispute in U.S. Tax Court.
The trial, which got underway on Tuesday, centers on a 2010 transaction in which Facebook transferred some of its intellectual property to a subsidiary in Ireland — a country with an extremely low corporate tax rate. The IRS claims that Facebook undervalued the properties in order to pay less in taxes.
While Facebook values the assets transferred at about $6.5 billion, the IRS claims the value exceeds $13 billion. According to Bloomberg, Facebook says it could be on the hook for $9 billion should the IRS prevail, as the ruling could apply to subsequent years that remain open to examination.
According to Bloomberg, Facebook is just the latest company to face a lawsuit from the IRS about sending intangible assets to foreign subsidiaries. Coca-Cola and Amazon have also seen similar scrutiny from the IRS.
According to Reuters, top Facebook executives like hardware chief Andrew Bosworth and Chief Technology Officer Mike Schroepfer could be called to testify.
In an op-ed in the Financial Times over the weekend, Facebook founder and CEO Mark Zuckerburg called for more regulation in the tech industry in terms of taxation.