The social media giant, Facebook, is now facing a possible tax penalty amounting to $3 billion to $5 billion regarding its accounts for assets it shifted offshore.
The Zuckerberg’s led company divulged the potential tax bill following its filing in Securities and Exchange Commission. FB Incorporated reiterated to the agency that the fine could affect the material on its business.
The possible fine comes amid the ongoing investigation of Internal Revenue Service (IRS) into the company’s offshore revenue recognition.
In a petition of IRS, it says that Facebook fail to spot a June deadline in providing the government agency the information about its offshore tax strategies.
IRS wanted to get information from the 2010 tax year, which was the year when Facebook moved global rights for some of its assets including intellectual property from US and Canada to Ireland.
The said investigation was been going since 2013, only on July 27 when the company received notice that it may have understated assets by billion of dollars.
The action of IRS shows a new government strategies in enforcing tactics and guidelines to go after bigger companies that earn money from IP.