Facebook Inc (NASDAQ:FB) Taxing Times
The US government is expected to hit Facebook with a bill for between 3 billion and 5 billion in back taxes, the social network has disclosed.
Facebook said it would challenge the Internal Revenue Service (IRS) assessment in the US Tax Court when it becomes final.
The tax bill relates to a previously disclosed review of the pricing of assets Facebook transferred to its Irish subsidiary.
FACEBOOK INC A closed down -1.060 at 123.940. Volume was 39% above average (neutral) and Bollinger Bands were 30% wider than normal.
Open High Low Close Volume___
124.650 125.840 123.710 123.940 35,058,804
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 121.86 117.26 109.66
Volatility: 20 23 37
Volume: 30,144,838 21,538,710 28,226,256
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
FACEBOOK INC A is currently 13.0% above its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. Our volume indicators reflect moderate flows of volume into FB.O (mildly bullish). Our trend forecasting oscillators are currently bullish on FB.O and have had this outlook for the last 15 periods.
In a filing with regulators Thursday, Facebook said it had received a notice this week from the IRS about the review.
“While the notice applies only to the 2010 tax year, the IRS states that it will also apply its position for tax years subsequent to 2010, which, if the IRS prevails in its position, could result in an additional federal tax liability of an estimated aggregate amount of approximately 3.0 billion to 5.0 billion, plus nterest and any penalties asserted,” the filing said.
“We do not agree with the position of the IRS and will file a petition in the United States Tax Court challenging the notice.”
The news comes after Facebook reported Wednesday a huge quarterly profit jump, with net income leaping 186 percent from a year ago to 2.05 billion and revenues surging 59 percent to 6.4 billion.
The IRS revelation is the latest highlighting tax questions on the global operations of big tech companies.
European Union officials have looked at the tax liabilities of companies including Google, Amazon and Apple. Some of the firms have taken advantage of tax breaks offered from Ireland, Belgium and Luxembourg.
Ireland has long been a favorite location for multinationals because its 12.5 percent corporate tax rate is the lowest in the 28-nation EU.