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Report: Facebook could owe $5 billion in taxes

(Photo: MGN Online)

Yes, that is billion with a “b.”

Facebook disclosed on Thursday that is could owe billions due to an IRS investigation into the way it moved assets to an Irish subsidiary to avoid higher taxes, CNN reports.

According to the Securities and Exchange Commission, the tax penalty could be up to $5 billion plus interest.

The IRS investigation dates back to 2010 when Facebook shifted the rights for its worldwide business, excluding the U.S. and Canada, to Ireland as part of a “complex maneuver to reduce tax payments,” CNN says.

Facebook disagrees with the IRS and says they will file a petition with the United States tax court challenging the notice,

An investigator with the IRS alleges she issued six summons last month for Facebook to produce records related to the asset transfer and they failed to comply.

Earlier this week, the IRS disclosed that Facebook allegedly ignored a seventh summons as well.

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