U.S. authorities are examining Facebook's federal income tax liability for the period ending Dec. 31, 2010 and are looking at whether the company understated the value of global rights for many of its intangible assets outside the U.S. and Canada that it transferred to a subsidiary in low-tax Ireland.
While Facebook has supplied some documents to the tax authority, it hasn't provided books, records, papers and other data demanded in seven summonses, the IRS said in an amended petition filed Monday at the U.S. District Court for the Northern District of California. These include a request to show up at an IRS office in San Jose on June 29.
The documents sought "may be relevant to understanding Facebook executives' internal views regarding the transferred intangibles, Facebook's valuation with respect to third-party investors, Facebook's valuation with respect to the sale of stock by Facebook employees, and valuation modeling with respect to acquired companies and, and thus may be relevant to determining the value of the transferred intangibles," the IRS said in an amended declaration filed with the updated petition.