The IRS is suing Facebook for $9bn over unpaid taxes, reports Reuters, targeting its licensing of "intellectual property" to its own Irish subsidiary to shift profits to that lower-taxed jurisdiction.
Under the arrangement, Facebook’s subsidiaries pay royalties to the U.S.-based parent for access to its trademark, users and platform technologies. From 2010 to 2016, Facebook Ireland paid Facebook U.S. more than $14 billion in royalties and cost-sharing payments, according to the court filing.
The company said the low valuation reflected the risks associated with Facebook’s international expansion, which took place in 2010 before its IPO and the development of its most lucrative digital advertising products.
The practice used to be called Double Irish but has become more elaborate in recent years with changes to the law; Ireland remains the hot place to store profits. Read the rest
The IRS removed language from their Web site that listed Fortnite V-Bucks and Roblox Robux as examples of convertible virtual currencies, like Bitcoin. They were included on a page about virtual currencies
as they relate to a new question on IRS Form 1040 that asks whether the taxpayer, sold, exchanged, or acquired financial interest in any virtual currency. From Bloomberg
The language was removed hours after Bloomberg Tax asked if gamers who purchased or earned in-game currencies would have to disclose that on their 2019 tax returns.
IRS Chief Counsel Michael Desmond indicated that the inclusion of the video game currencies was a mistake, though he offered no insight on how they ended up alongside Bitcoin on the list of examples.
“It was corrected and that was done quickly—as soon as it was brought to our attention,” Desmond told reporters Thursday at a Tax Council Policy Institute conference in Washington...
Desmond demurred when asked to confirm that gamers wouldn’t need to mark ‘yes’ to the new 1040 question, but said addressing gaming currencies in the virtual currency context isn’t a major focus for the agency right now.
image: Epic Games
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When the IRS proposed providing free, pre-completed tax-returns to US taxpayers, the big tax-prep companies like Intuit/Turbotax and HR Block lobbied like crazy to kill the plan, and instead proposed "Free File," through which they would provide free online tax-prep services for people with incomes of $69k or lower.
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CNBC reports that the Supreme Court has temporarily halted a lower court order requiring accountants to turn over President Donald Trump's tax returns to congress.
Steven Portnoy: "The DC Circuit Court's mandate is stayed pending a response due at 3pm Thursday afternoon." Read the rest
In 2018, for the first time in recorded US history, the 400 richest American households paid a lower rate of tax than any other group of American taxpayers: 23%, down from 70% in 1950 and 47% in 1980.
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Immediately after a Federal judge dismissed President Trump's attempt to block a Grand Jury from reviewing his taxes, his lawyers appealed.
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A federal judge on Monday dismissed President Donald Trump's effort to prevent his tax returns from being turned over to a New York grand jury.
The ruling raises the likelihood that Trump's tax returns will be provided in response to the subpoena, although any material obtained through a grand jury subpoena is covered by grand jury secrecy rules, meaning it would likely become public only if it were used as evidence at a trial.
Dismissing Trump's "extraordinary" claim that any occupant of the White House enjoys "absolute immunity from criminal process of any kind," US District Court Judge Victor Marrero said in a 75-page opinion that such a position "would constitute an overreach of executive power."
An attorney for Trump filed an emergency notice of appeal to the 2nd US Circuit Court of Appeals minutes after the district court judge filed his decision, and the appeals court immediately ordered a temporary stay of the subpoena.
William S. Consovoy, the attorney hired by Trump last Friday, told Treasury it should not turn over Trump's tax returns until it receives a legal opinion from DoJ.
Starting in the early 1990s with a Democratic Congress (and continued by other congresses, Republican and Democrat, since), the rate of tax on "passive, unearned income" has been in decline, but someone has to pay to keep Uncle Sam's lights on, so the tax on workers' wages have diverged, until today, when the tax bite out of a worker's wage is double the tax taken on wealthy investor with the same amount in "passive income."
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Will Smith never planned on being an actor. He never planned on being broke and in debt to the IRS, either. In this video, Smith breaks down how being bad with money started him down the road to becoming one of the biggest TV and film stars in the world. Read the rest
A few weeks back, a number of external hard drives full of state taxpayer information were poached from the offices of Florida's Department of Revenue. Why these drives full of sensitive data were left out in the open where anyone could walk with one is a question I'm betting there's a really entertaining answer to. Maybe we'll get to hear it someday. In the meantime, here we go: the drives have been recovered and the criminal mastermind behind the theft was a janitor that wanted more storage in which to download Xbox games.
According to the Florida Department of Law Enforcement, Florida man (of course) Andru Rae’sion Reed was cleaning the offices of the Florida Department of Revenue when he saw the hard drives and decided to take it upon himself to liberate them from the day-to-day drudgery of storing a whack of taxpayer information. As he took them to their new forever home, Reed promised the hard drives that they could spend their days chewing on game files while they were attached to his Xbox.
On March 30, FDLE agents dropped by Reed's home to see how he was doing and see if he, I don't know, knew anything about the missing hard drives. Reed came clean on the fact that he did indeed have the drives, stating that he had no idea of what was on them. From what the FDLE has to say, it doesn't look like any of the taxpayer information on the drives was shared by Reed, but they're going to do a little more digital digging, just to make sure. Read the rest
Congratulations, America! The electronic federal tax filing system offered by the Internal Revenue Service so you can file your taxes today just crashed. Read the rest
The Dodd-Frank act mandated that publicly listed companies would have to publish an annual figure listing the ratio between their CEO's pay and their median worker's pay: now, after nearly a decade of stalling tactics from corporate lobbyists, those figures are emerging, and they're equipping cities with the tools they need to crack down on the most unequal companies in the world.
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Colorado has a booming economy and high employment, yet its schools and infrastructure are seriously underfunded. The reason, according to this Full Frontal segment, is that 25 years ago an amendment to the state constitution was added requiring any tax increase to be voted on by the people of Colorado. As you might guess, people hardly ever vote to raise their taxes. The segment focuses on the man who fought to get the amendment added to the constitution, Douglas Bruce. He's quite a character. He was imprisoned for tax evasion, once charged with assault, calls himself a freedom fighter ("Martin Luther King and I are both freedom fighters."), and thinks an invitation to hug is a "homosexual encounter." Read the rest
Bruce Bartlett served in Reagan's White House as domestic policy adviser and was an aide to Rep. Jack Kemp [R-NY], co-sponsor of the Kemp-Roth bill, which turned Reagan's campaign tax promises into law in 1981. Read the rest
Former reality television star Donald J. Trump promised late on Friday to reveal plans for a “massive” tax cut for Americans next week. “Tax reform is way too complicated,” he added. Seriously. Read the rest
President Trump refused to release his tax returns during the election campaign despite promising to do so, raising suspicion that anything from embarrassing business failures to compromising foreign debts could be revealed in them. MSNBC host Rachel Maddow tweeted that she's received Trump tax returns from 2005.
That'd be personal federal taxes. She'll be presenting the details at 9pm EST on her show. Any bets on what they contain?
UPDATE: The White House released information Trump's 2005 taxes to pre-empt the show.
Trump reported $150 million in income and $38 million paid in taxes, according to a statement from the White House. ...
The White House said Trump had a responsibility "to pay no more tax than legally required."
"Before being elected President, Mr. Trump was one of the most successful businessmen in the world with a responsibility to his company, his family and his employees to pya no more tax than legally required," the White House said.
Does he really think he gained anything be pre-empting her by minutes? It just shows there's no impediment at all to him releasing his taxes. Read the rest
The GOP is advocating for a "Border Adjustment Tax," which is something like a complicated Value Added Tax that is meant to encourage companies to on-shore or re-shore their manufacturing, without raising prices for Americans (because the US dollar is supposed to rise by up to 25% (!) as a result), while removing the complexity that allows companies to dodge tax by finding loopholes. Read the rest