Thursday, January 30, 2020

Who’s Afraid Of The IRS? Not Facebook.



Facebook IRSThe social media behemoth is about to face off with the tax agency in a rare trial to capture billions that the IRS thinks Facebook owes. But onerous budget cuts have hamstrung the agency’s ability to bring the case.

In March 2008, as Facebook was speeding toward 100 million users and emerging as the next big tech company, it announced an important hire. Sheryl Sandberg was leaving Google to become Facebook’s chief operating officer. CEO Mark Zuckerberg, then 23 years old, told The New York Times that Sandberg would take the young company “to the next level.”

Based on her time at Google, Sandberg soon decided that one area where Facebook was behind its peers was in its tax dodging. “My experience is that by not having a European center and running everything through the US, it is very costly in terms of taxes,” she wrote other executives in an April 2008 email, which hasn’t been previously reported. Facebook’s head of tax agreed, replying that the company needed to find “a low taxed jurisdiction to park profits.”

Later that year, Facebook named Dublin as its international headquarters, just as Google had done when Sandberg was there. And just like Google, Facebook concocted an intra-company deal to “park profits” in Ireland, where it would pay a tax rate near zero.
Like its Big Tech peers, Facebook wasn’t much afraid of the IRS. But, as it happened, the same year that Facebook started moving profits to Ireland, the IRS launched a team to crack down on deals like that. The effort started aggressively. As we recently reported, the IRS threw everything it had at Microsoft in the largest audit in the agency’s history.


BYU To Host 2nd Annual National Storytelling Competition For Law Students

Following up on my previous post:  From Gordon Smith (Dean, BYU):
BYU Law (2020)I mentioned this time last year that my colleagues at BYU Law and I have been exploring the value and importance of story in our lives and the lives of our students. The deeper I delve into the study of story, the more I am convinced that it is a necessary part of legal education. That conviction has been borne out as our students have received clerkship interviews, job offers, fellowships, and other awards and rewards as a result of skilled storytelling.
I invite your students to participate again with ours in LawStories on the Mainstage, a national storytelling event hosted by BYU Law. We had excellent participation last year with law students from 29 schools submitting stories and 9 of the 10 finalists representing different law schools.


Adam Kern (J.D. 2019, NYU), Note, Taxing Pain and Suffering, 94 N.Y.U. L. Rev. 507  (2019):
Every year, billions of dollars are awarded as compensation for pain and suffering. A hard question—one that has vexed courts, legislators, and academics alike—is how we should tax them (if, indeed, we should tax them at all). In this Note, I articulate a new answer. If we take seriously the value of equality between injured people and uninjured people, we ought to tax compensatory damages for pain and suffering.


John A. Townsend (Townsend & Jones, Houston), Burden of Proof in Tax Cases: Valuation and Ranges — An Update, 73 Tax Law. ___ (2020):

  ABA Tax Lawyer (2019)n this article, I update a previous article, John A. Townsend, Burden of Proof in Tax Cases: Valuations and Ranges, 2001 TNT 187-37 (2001). I discuss the difficulty in many valuation cases of determining a finite valuation point by the required degree of persuasion (more likely than not in most civil cases). This point was made cogently in a frequently cited opinion of by the Delaware Court of Chancery (which I quote in the next paragraph)
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