[HN Gopher] IRS Tactics Against Meta Open a New Front in the Cor...
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IRS Tactics Against Meta Open a New Front in the Corporate Tax
Fight
Author : mitchbob
Score : 171 points
Date : 2026-02-24 12:58 UTC (10 hours ago)
(HTM) web link (www.nytimes.com)
(TXT) w3m dump (www.nytimes.com)
| mitchbob wrote:
| > The agency is using real-world profit data to challenge how big
| companies value offshore intellectual property.
|
| https://archive.ph/2026.02.24-124153/https://www.nytimes.com...
| notyourwork wrote:
| Probably less about tax revenue and more about the executive
| branch squeezing tech companies to assert influence.
| ambicapter wrote:
| I doubt the current executive branch has enough brain trust
| to understand these sort of tactics.
| lenerdenator wrote:
| "Trump's stupid" is how we got here. You don't need to be
| smart to get where he is. You just have to have the
| willingness to engage in shady business practices, have
| enough money to outlast opponents in a courtroom, and exist
| in a society where there's no real pressure on people who
| do those things.
| bonsai_spool wrote:
| > Probably less about tax revenue and more about the
| executive branch squeezing tech companies to assert
| influence.
|
| Absolutely _not_ about this, as is clearly reported in the
| linked article.
| notyourwork wrote:
| Because the article said so? That's your rationale for
| saying the executive branch isn't weaponizing the rest of
| government offices for their own influence and benefit.
| Sorry, color me unconvinced until this administration shows
| good faith.
| bonsai_spool wrote:
| > Because the article said so?
|
| Because... the article clearly says the case began under
| the _FORMER_ administration, and goes further to say that
| it 's not clear whether the _CURRENT_ administration is
| going to drop the case.
| ryandrake wrote:
| Am I the only one who thinks it's totally bonkers that a
| lawsuit can outlast a 4 year presidential administration?
| I mean, I get it, court cases can be complex, but what on
| earth could they be continuously doing for four years? I
| would love to see an hour by hour accounting of the time
| actually spent by humans on a case like this. My guess is
| that it's like a poorly run software project: mostly
| empty, where Person X is blocked waiting on the output of
| Person Y for weeks, and so on.
| bonsai_spool wrote:
| > Am I the only one who thinks it's totally bonkers that
| a lawsuit can outlast a 4 year presidential
| administration?
|
| I take it you've never been party to a civil lawsuit
| between business entities or with the government.
| gamblor956 wrote:
| When I was still at a firm, several of our clients were
| fighting off investigations related to the Bermudan loss
| harvesting scheme that started in the 1980s. The
| investigations started in 2003 and weren't resolved until
| 2013.
| helterskelter wrote:
| This is the nature of any non-trivial litigation. It can
| take a long time just to source all the records of what's
| being argued over, then it takes a long time to argue
| over what's allowed, then a long time to argue what all
| of it means, then a long time to argue over which laws,
| jurisdictions and precedents apply, then a long time to
| figure out when the judge (who is juggling >1000 cases)
| can fit you in, then your legal counsel is on vacation,
| then the complaint gets amended and you have to
| reevaluate everything you've been fighting over for the
| past half decade, repeating much of the above, then
| opposition replaces their counsel (that's a 60 day
| pause), then the judge dies from old age, and then
| finally everybody forgets about it because space has
| expanded so much since you started the case that nobody
| can communicate anymore and the universe is going into
| heat death.
|
| Kafka was trained as an attorney, after all.
| lesuorac wrote:
| > It can take a long time just to source all the records
| of what's being argued over,
|
| It seems to me that if you can't timely procure your own
| records in a court case the case should be allowed to
| proceed with any assumptions based on them in your
| opponent's favor. Whats really the difference between
| taking 2+ years to procure a document and deleting that
| document?
| helterskelter wrote:
| Oftentimes the records aren't in the hands of either
| party and need to be subpoenaed. When you get them, they
| can open up entirely new lines of inquiry. Opposition
| will fight this tooth and nail so that the evidence can't
| be included, or they'll go on a fishing expedition under
| the guise of having all the facts on the table, and the
| court might just allow them. This process can take a very
| long time, and from what I've seen, the higher the
| stakes, the more the court will be willing to allow it to
| happen, so nobody can cry to the appeals court that
| something important was left out. Judges don't like their
| rulings overturned.
| AnthonyMouse wrote:
| It's typically not a matter of _having_ the documents, it
| 's a matter of _filtering_ them.
|
| Suppose you have a corporate mail server with all your
| mail on it, and a competitor sues you. Your emails are
| going to be full of trade secrets, prices negotiated with
| suppliers, etc. Things that are irrelevant to the
| litigation and can't be given to the competitor.
| Meanwhile there are other emails they're entitled to see
| because they're directly relevant to the litigation.
|
| What option do you have other than to have someone go
| read ten years worth of emails to decide which ones they
| get?
|
| > Whats really the difference between taking 2+ years to
| procure a document and deleting that document?
|
| The difference is obviously that they get the document in
| the 2nd+ year of the trial instead of never.
| johnnyanmac wrote:
| >What option do you have other than to have someone go
| read ten years worth of emails to decide which ones they
| get?
|
| This funnily enough sounds like the exact use case of AI
| in streamlining timely, tedious, but important matters.
| Now the that someone simply needs to verify that the
| filtered documents are relevsnt.
|
| Of course, I'm assuming a world where AI works on this
| scale. Or a world where this slow walking discovery isn't
| a feature for corporations.
|
| > The difference is obviously that they get the document
| in the 2nd+ year of the trial instead of never.
|
| Yeah, after using that year to make billions of dollars.
| That's how the current AI litigation is going. Once again
| by design. Pillage until the cows come home in 5-6 years.
| AnthonyMouse wrote:
| > Now the that someone simply needs to verify that the
| filtered documents are relevsnt.
|
| Now someone simply needs to verify that the filtered in
| documents are relevant and the filtered out documents are
| not relevant. But wait, that was the original problem.
| johnnyanmac wrote:
| If they are trusting AI to replace labor, they should
| trust AI to be accountable for bad filters. What happens
| when a human misses over a document or 2?
| AnthonyMouse wrote:
| > If they are trusting AI to replace labor, they should
| trust AI to be accountable for bad filters.
|
| Surely all of the AI hype is true and there are no
| hypocrites in Corporate America.
|
| > What happens when a human misses over a document or 2?
|
| If they were obligated to produce it and don't they can
| get into some pretty bad trouble with the court. If they
| hand over something sensitive they weren't required to,
| they could potentially lose billions of dollars by
| handing trade secrets to a competitor, or get sued by
| someone else for violating an NDA etc.
| johnnyanmac wrote:
| >Surely all of the AI hype is true and there are no
| hypocrites in Corporate America.
|
| Worst case they are right and now we have more efficient
| processing. Best case, bungling up some high profile
| cases accelerates us towards proper regulation when a
| judge tires of AI scapegoats.
|
| I don't see a big downside here.
|
| >If they were obligated to produce it and don't they can
| get into some pretty bad trouble with the court.
|
| Okay, seems easy enough to map to AI. Just a matter of
| who we hold accountable for it. The prompter, the company
| at large, or the AI provider.
| AnthonyMouse wrote:
| > I don't see a big downside here.
|
| There is an obvious downside for them which is why they
| don't do it. To make them do it the judge would have to
| order them to use AI to do it faster, which would make it
| a lot less reasonable for the judge to get mad at them
| when the AI messes it up.
|
| > Just a matter of who we hold accountable for it. The
| prompter, the company at large, or the AI provider.
|
| You're just asking who you want to have refuse to do it
| because everybody knows it wouldn't actually get it
| perfect and then the person you want to punish when it
| goes wrong is the person who is going to say no.
| johnnyanmac wrote:
| >There is an obvious downside for them which is why they
| don't do it.
|
| Well yes. This is all academic. I already said in the
| first comment that they have a financial incentive to
| stall the courts.
|
| >You're just asking who you want to have refuse to do
| it....
|
| I just want efficiency. It's a shame we can't have that
| when it comes to things that might help the people and
| hurt billionaires.
|
| So what's really wrong with what I'm asking?
| AnthonyMouse wrote:
| > I already said in the first comment that they have a
| financial incentive to stall the courts.
|
| They have a financial incentive to _not be found in
| contempt of court_. And another financial incentive to
| not disclose sensitive information they 're not supposed
| to disclose.
|
| When false positives _and_ false negatives are both very
| expensive, what 's left is a resource-intensive slog to
| make sure everything is on the right side of the line.
| "Use the new thing that sacrifices accuracy for haste" is
| not a solution.
|
| > I just want efficiency.
|
| Asking for efficiency from the court system is like
| asking for speed from geology. That's not typically where
| you find that and if it is you're probably about to have
| a bad time.
|
| The way you actually get efficiency is by having a larger
| number of smaller companies, so they're not massive
| vertically integrated conglomerates that you need
| something the size and speed of the US government to hold
| them in check.
| mlhpdx wrote:
| As someone who has built an e-discovery platform I can
| tell you that any delays these days are because they are
| helpful to minimize negative employer cash flow. In other
| words, exactly why corporate lawyers are paid.
|
| The technology for legal review is extremely fast and
| effective.
| rayiner wrote:
| The court system is designed to optimize throughput at
| the expense of latency, against the background of a
| system where authority is vested in a relatively small
| number of presidentially appointed and Senate-confirmed
| constitutional officers. About 350,000 civil cases and
| 65,000 criminal cases are filed every year, spread out
| across less than 700 district court judges.
|
| To maximize throughput, proceedings are structured like
| batch processing systems. You submit work, it waits in
| the queue until the system gets to it, some intermediate
| decision is rendered, and then you submit some more work.
| For constitutional reasons, criminal cases cut in line,
| which can further increase the latency of civil cases.
| That means that, in a four-year case, the lawyers don't
| actually work on the case for four years straight. They
| do batches of work a couple of months at a time, and then
| work on other cases while waiting for the output.
|
| Moreover, court case are, to a degree, inherently serial.
| Motions to dismiss--briefs that argue a case must be
| dismissed because its legally defective--must be filed
| before you start deposing witnesses or exchanging
| documents. You generally need to do depositions of
| witnesses after you've reviewed all the relevant
| documents. And all the fact gathering must be done before
| you file summary judgment motions--briefs that argue a
| case can be decided on the factual record without a
| trial.[1]
|
| Part of the inherent delay is that the legal system is
| already an "exception path" in the ordinary course of
| business. A lot of time is spent waiting for people
| outside your organization who don't work for you. For
| example, when you're deposing a witness, they have work
| responsibilities, vacation plans, etc., and everyone has
| to work around that.
|
| It's possible to structure cases where everything can be
| done in a year. That's what happens at the International
| Trade Commission, for example. Arbitration proceedings
| can also be structured like that.
|
| [1] This also means that legal teams aren't very big.
| Massive corporate cases with billions of dollars on the
| line are handled with core teams of a dozen or so lawyers
| --with maybe another dozen or two parachuting in to help
| with specific phases like trial. Technology was squeezed
| out a lot of the parallelizable work. The days of 20
| junior attorneys sitting in rooms reviewing boxes of
| paper documents are gone.
| samat wrote:
| Thank you so much for this explanation. Love HN for this
| type of comments!
| snowwrestler wrote:
| > what on earth could they be continuously doing for four
| years?
|
| It's not continuous. Court time in particular is a scarce
| resource. Many people are involved in complex litigation,
| and for almost all of those people it is not their only
| project / job.
|
| > My guess is that it's like a poorly run software
| project: mostly empty, where Person X is blocked waiting
| on the output of Person Y for weeks, and so on.
|
| Correct but the off times aren't empty; the lawyers and
| staff simply pick up one of the other hundreds of tasks
| in front of them while they wait.
| loeg wrote:
| I don't think that really disproves GP's hypothesis. The
| Trump admin is happy to drop lawsuits for connected
| entities. The fact that they're sustaining a Biden-
| initiated suit is plausibly because they just don't like
| Meta/Zuckerberg.
| bonsai_spool wrote:
| Help me understand the thinking.
|
| >> Probably less about tax revenue and more about the
| executive branch squeezing tech companies to assert
| influence.
|
| The case existed and presumably had the same lawyers all
| the while. How, then, can the case become less about tax
| revenue?
|
| You may say that there are ulterior motives, but, at the
| most, one can say that _additional_ concerns have
| complicated the tax revenue concern. We 're well into
| fascist times, but the OP comment simply ignores the
| facts.
| forgotaccount3 wrote:
| My only concern here is that it's using ex post facto
| information to try to dispute earlier assessments.
|
| If I 'moved' some AI 'patents' to another country 5 years ago
| and stated they were worth $x using some formula and now some
| years later the government steps in and says 'No no no, you
| earned $x + $y and lied on the original value which should have
| represented the discounted future income!' that's not disputing
| the formula used in the original point. It's just that 5 years
| ago people underestimated how far and how valuable AI would be.
| raw_anon_1111 wrote:
| With the way that Zuckerberg both kisses up to and has bribed the
| current administration by "settling lawsuits", this won't go
| anywhere.
| blinding-streak wrote:
| https://archive.ph/Vsdqd
| bilekas wrote:
| > The agency has lost more than a quarter of its staff, withdrawn
| directives to auditors to crack down on aggressive tax shelters
| and permitted other auditing efforts to falter.
|
| When you see a government doing this, you know they're not
| interested in collecting Tax from their rich buddies.
|
| This case will sit in limbo for 20x years.
| yellow_lead wrote:
| Or they'll settle with Meta in a few years for a small fee with
| no admission of wrongdoing to save face.
| InkCanon wrote:
| Meta is actually at a huge disadvantage here. The IRS has a
| litigation success rate of 93%. It's an astoundingly
| successful legal entity.
| aljgz wrote:
| What's the success rate when data is limited to only very
| large companies, say top 50 in size?
| shagie wrote:
| That's a success rate that largely is based on suing people
| who don't have the resources to fight it (no claims made
| about if they're right or not).
|
| However, the IRS has had reductions in staff and funding
| which made it _harder_ to go after the bigger accounts who
| have more forensic accounting needing to be done to find
| the money in the various tax shelters.
|
| https://www.pbs.org/newshour/nation/irs-faces-challenges-
| in-...
|
| > "The IRS is simultaneously confronting a reduction of 27%
| of its workforce, leadership turnover, and the
| implementation of extensive and complex tax law changes"
| mandated by Republicans' tax and spending measure that
| President Donald Trump signed into law last summer, Collins
| said in her report.
|
| https://www.americanprogress.org/article/the-fiscal-
| impact-o... (May 2025)
|
| > The Global High Wealth department of the IRS is designed
| to audit ultrawealthy individuals and corporations, who
| often hire highly sophisticated tax advisors to devise ways
| to avoid taxes and to respond to the IRS if they are
| challenged. But, as of late March, the department was cut
| by nearly 40 percent--and likely more by now with the
| additional RIFs.
|
| I would be willing to contend that while they've got a 93%
| overall, that's historical numbers and the teams that
| _would_ go against Meta and others are severely
| understaffed.
| johnnyanmac wrote:
| Man who spent career evading taxes weakens tax collection
| system. Who would have thunk it?
| shagie wrote:
| While he's the most recent one, it's been a systemic
| problem that's largely been from congressional budget
| cuts.
|
| 2014 The War on the IRS
| https://taxpolicycenter.org/taxvox/war-irs
|
| 2015 Poor IRS Service Reflects Congress's Deep Funding
| Cuts https://www.cbpp.org/research/federal-tax/poor-irs-
| service-r...
|
| 2018 How the IRS Was Gutted
| https://www.propublica.org/article/how-the-irs-was-gutted
|
| 2020 Congressional Budget Office Confirms That IRS Budget
| Cuts Lose Money and Benefit the Rich
| https://itep.org/congressional-budget-office-confirms-
| that-i...
| reactordev wrote:
| Exactly. This is just one big tech fighting another big tech
| using the government as a weapon.
| spiderfarmer wrote:
| At what point does the term "regime" become an accurate
| description of that government rather than a derogatory label?
| p_j_w wrote:
| When their agents execute people in the street with no
| repercussions.
| autoexec wrote:
| In that case I can't think of time my country hasn't been a
| regime I guess. Police have pretty much always been
| executing people in the streets without repercussions.
| Although there has been a small amount of progress
| recently, these days they do it on camera and _still_ face
| zero repercussions much of the time.
| kgwxd wrote:
| Yup, and the people calling it out all this time were
| consistently shrugged off as being hyperbolic. Still are.
| Always will be.
| tempodox wrote:
| Are you suggesting that an accurate description would not be
| derogatory?
| kgwxd wrote:
| Long, long time ago. Accuracy don't matter to enough people
| though.
| wiml wrote:
| "Regime" is mostly derogatory among the terminally online.
| It's an accurate description of any government, regulatory
| system, zone of applicability of a natural law, etc etc.
| mothballed wrote:
| >..withdrawn directives to auditors to crack down on aggressive
| tax shelters..
|
| The above might be a salient point, but as for the 1/4 auditors
| lost and the rest:
|
| The low income (under 25k) with EITC, were the largest audited
| group with 298,485 of 626,204 audits performed in 2022. The
| rest of those earning under 200k had 250,391 audits.[] 48% of
| audits were under 25k income w/ EITC. 87% of audits were people
| under 200k income.
|
| Kind of interferes with the idea these audits were all about
| going after the "rich buddies." They were way more about going
| after the poor than they were about going after the rich.
|
| [] IRS management audit reports obtained via FOIA by via TRAC /
| https://tracreports.org/reports/706/
| mikestew wrote:
| _Kind of interferes with the idea these audits were all about
| going after the "rich buddies."_
|
| I think you misread the parent comment, who said exactly the
| opposite.
| jcarreiro wrote:
| There are many, many more tax returns filed by people earning
| under 200k adjusted gross income than those earning more, I
| assume. So if there's a uniform chance that a return is
| audited, we would expect most audits to be done on returns
| under that threshold.
|
| Of course, it may not make sense to select returns uniformly
| at random for audits...
| mothballed wrote:
| Nowhere near 48% of the population earns enough wages for
| EITC but still under 25k. It's way way way way
| overrepresented in audits. _Nearly half of the audits are
| aimed at the poorest workers._
|
| ------- re: below due to throttling-----------
|
| .... they were audits according to IRS. This is from the
| FOIA'd audit numbers from IRS via TRAC.
| oklahomasports wrote:
| They are not audits. They are automated notices to idiots
| trying to claim the same child tax credit in multiple
| returns or hiding income(not reporting their w2 lol) to
| claim the EITC
| buttercraft wrote:
| In other words, understaffed agency goes for the low
| hanging fruit
| oklahomasports wrote:
| Weird way to frame it. The computer does it
| automatically. They would do it whether they were well
| staffed or not.
| johnnyanmac wrote:
| The computer does not do all the loopholes and tax codes
| automatically. If it did that would solve a lot of these
| problems. But we need audits in the cases companies or
| people lie/exaggerate/forget/etc.
| ryandrake wrote:
| Also, if tax cheating is uniform across the population,
| then the statement "there are more tax cheats earning under
| 200k" is true but wildly misleading, since "there are more
| taxpayers earning under 200k" is also true.
| hnburnsy wrote:
| This has been debunked as these are just data matching audits
| as EITC is full of fraud with an estimated 30% of over
| claiming and improper payments by taxpayers.
| mothballed wrote:
| Even if you change the view to _it 's mostly the poor who
| are the tax scammers_ it doesn't degrade the counterpoints
| that these auditors were by far mostly going after the
| middle class and poor -- you're just asserting the poors
| are * _disproportionately_ tax cheats that perhaps deserve
| it.
|
| *edit: since my words were take in bad faith
| hnburnsy wrote:
| They wrote a program years ago to data match EITC, little
| to no extra manpower from the IRS is needed, that is the
| point.
| fwipsy wrote:
| I think you're strawmanning a bit. They're not saying
| poor people are tax cheats, just that tax cheats tend to
| be poor. This makes sense for the same reasons other
| types of crime are also associated with poverty. This is
| not to say that wealthy people do not also evade taxes,
| but they do so in ways that are harder to catch and
| prosecute. You're implying that going after poor people
| is some sort of classist discrimination but I think it's
| far more likely that there are good reasons for it.
| SAI_Peregrinus wrote:
| Or just that there are more poor people. Say 10% of all
| people are tax cheats, evenly across income. The top 1%
| who are the rich is much smaller than the bottom 50% who
| are the poor. So in absolute numbers there will be far
| more poor tax cheats than wealthy. Even if 100% of the
| wealthy are tax cheats, that still ends up being fewer
| wealthy tax cheats than poor tax cheats. Anything
| involving absolute numbers of audits is going to be
| skewed to show more happening to the poor, because there
| are so many more poor people than rich people.
| mothballed wrote:
| Last I checked it's way closer to 28% than 48% of people
| that have earned income of at least $1 (thus EITC) and
| total income less than $25k -- which fall under the
| bucket of 48% of audits were for those with EITC and
| income under 25k. They are definitely disproportionately
| going after the poorest workers.
| breppp wrote:
| am i missing something, or is the statistic that is used
| to pinpoint someone as poor, is the same statistic that
| is gamed here? Namely the amount of income that a person
| declares to the IRS?
| axus wrote:
| And I would estimate 30% of people using tax shelters are
| underpaying their taxes. If there's profitable work to do
| for tax auditors, hire more auditors and cover both
| problems.
| idontwantthis wrote:
| Biden and democrats increased funding in order to have the
| resources to go after rich offenders and they were doing it
| successfully and earning more than it cost, but Trumpublicans
| immediately rescinded it. It's all public record go look for
| it.
| mothballed wrote:
| Yet they refused to codify the "promise" it wouldn't be
| used for under 400k income families. Look at what they do,
| not what they say. In public they make 'promises' but in
| statute it turns into ether, meanwhile real audit data
| pointing to otherwise.
|
| -------- re: below due to throttling ------
|
| >I'm very confused about where you're going with this. Are
| you upset that too many rich people are getting audited, or
| that tax cheats under 400k income might also get audited?
|
| ... this was a direct response to parent stating increased
| funding was added specifically for going after rich people.
| Yes I would be upset if I was told they were adding new
| funding specifically to go after rich tax cheats but then
| turns out to be something like "welp actually we refuse to
| codify that or make anything binding that it will be used
| for those purposes, but for the cameras we will pinky swear
| it will be used for that and please don't look at the
| historical data for inferences."
| idiotsecant wrote:
| I'm very confused about where you're going with this. Are
| you upset that too many rich people are getting audited,
| or that tax cheats under 400k income might _also_ get
| audited?
| alistairSH wrote:
| Biden's desired policy was none of the additional funding
| would be used to increase audit rates for <$400k returns.
|
| The IRS didn't follow the intended policy, getting bogged
| down in the details of how they would define that
| threshold (primarily, would somebody who understated
| their income to get below the threshold count as "under
| 400k and audited").
|
| Not really sure why the OP is so upset - either way, the
| payback on additional funding to the IRS is almost
| universally stated as revenue-positive.
| jasonlotito wrote:
| > Yet they refused to codify the "promise" it wouldn't be
| used for under 400k income families.
|
| This is a lie. They didn't refuse. They didn't have it
| codified because they were trying to figure out how to
| define that. For example, one of the challenges IRS was
| having was someone reporting $390,000 but they actually
| earned $450,000. How do you deteremine that without an
| audit? Do you need a waiver? How does that get resolved
| without breaking the promise.
|
| > Look at what they do, not what they say.
|
| They were actively working on how to respect the promise
| in a reasonable way.
| alistairSH wrote:
| Yep. Here are some details, for anybody interested...
| https://www.govexec.com/oversight/2024/09/irs-behind-
| biden-p...
| gamblor956 wrote:
| Not sure why you're being downvoted for this comment as
| it's true.
|
| Democrats increased IRS funding so it could go after more
| tax evaders. Conservative estimates are that eliminating
| tax evasion (evasion, not avoidance) by the ultra-wealthy
| could allow the U.S. to reduce rate brackets by 2-3% across
| the board while maintaining revenue.
| orwin wrote:
| What percentage of that is automated audit, and what
| percentage is manual audit? Nowaday my country is mostly sane
| with tax filings, but in the weird time between the 90s and
| the 2010s, we had an uptick in "fraud" by low-income earners.
| This was caused by inconsistencies between filed data and the
| data the IRS equivalent had, but i guarantee you no effort
| was put into thsi (except secreterial manpower for the
| hotline/mail), that was just automated system ringing.
|
| In fact my first college side-job was exactly that,
| responding to taxpayers who were "caught" by the automated
| system and needed a payment delay.
| lenerdenator wrote:
| Ayup. Trump was able to get a stay on a case on an "allegedly"
| improperly-applied tax write-off for his casino's bankruptcy.
| It's been in limbo _at least_ since 2016. Ten years. This is
| the standard operating procedure for people at that level of
| wealth.
|
| Which would suggest that perhaps that level of wealth doesn't
| need to exist in our society.
| tempodox wrote:
| > that level of wealth doesn't need to exist in our society.
|
| But then the inquisition arrives saying this is socialism or
| whatever.
| scottyah wrote:
| True, as it is just another symptom of not too much wealth,
| but the growing disconnect of what wealth is designed to
| be. Money shouldn't be power, too many people are starting
| to blame "too much money" instead of asking why money is
| turning into political power. Seemingly none of the
| politicians or rich people want that narrative because they
| all want both.
| adrianN wrote:
| Has there ever been a society were money and power didn't
| go hand in hand?
| chowells wrote:
| Is it even possible for money to not be power? Like, how
| do you separate purchasing power from influence power?
| Purchasing is a very easy route to influence.
| jandrese wrote:
| Sure, societies that don't have the concept of currency.
| The inhabitants of the Sentinel Islands for example.
|
| Some other societies have different ways of measuring
| authority and delegating power, but in general currency
| is more efficient and if they have to interface with the
| rest of the world then money will be critical. That's why
| money is usually a proxy for power.
| up2isomorphism wrote:
| It will be very naive to believe adding IRS staff will help
| with that. It is far easier to audit W2 employees than dealing
| with mega corporations.
| loeg wrote:
| > It will be very naive to believe adding IRS staff will help
| with that. It is far easier to audit W2 employees than
| dealing with mega corporations.
|
| You're saying auditing megacorps is hard, but somehow more
| staff won't help? I don't buy it.
| pimlottc wrote:
| I think they are suggesting the lack of political will to
| go after big companies is the bigger problem
| up2isomorphism wrote:
| Of course it won't help. If you have an audit target to
| meet you want target meta?
|
| This exactly why ICE agents tends to target illegal
| immigrants that actually get a job and contribute to the
| society instead of criminals. Because the former are easy
| targets.
|
| Also fundamentally the tax law in the US are intrinsically
| favor capital owners, especially large corporations, adding
| more IRS agents only cost more tax payer's money and give
| regular people more headaches.
| loeg wrote:
| > If you have an audit target to meet you want target
| meta?
|
| I don't believe the approach the IRS takes is to set
| targets and only audit the lowest hanging fruit up to
| some target. They have different sub-organizations
| pursuing different goals, and some sort of vision about
| fairness that means going after tough cases.
|
| > This exactly why ICE agents tends to target illegal
| immigrants that actually get a job and contribute to the
| society instead of criminals. Because the former are easy
| targets.
|
| This is completely orthogonal, but also untrue. It's way
| easier to go after criminals, as long as states
| cooperate. The recent Trumpian ICE is more expensive and
| less effective than earlier regimes.
|
| > adding more IRS agents only cost more tax payer's money
| and give regular people more headaches.
|
| Many, many regular people underpay the taxes they owe.
| Additional IRS agents help close the gap between taxes
| owed and taxes paid, at a cost lower than the additional
| revenue. Your argument is just "individual tax cheats
| should be able to get away with it," which I can't agree
| with.
| AnthonyMouse wrote:
| > You're saying auditing megacorps is hard, but somehow
| more staff won't help? I don't buy it.
|
| It's not so much that it's _hard_ , it's that it _has a
| lower return on investment_ , because the IRS gets money
| from finding mistakes or intentional fraud. Megacorps have
| entire legal teams dedicated to preventing those things
| from happening, while lowering their taxes by finding
| _lawful_ ways of reducing their taxes to almost nothing by
| pouring over the unfathomable complexity of the tax code to
| find obscure credits or chain together the right sequence
| of things so their profits end up in a jurisdiction where
| they 're not taxed.
|
| If you audit them you spend an enormous amount of resources
| because their accounts are so complicated and then only get
| money if they screwed up, which they're less likely to have
| done than someone with fewer lawyers, and even then it will
| typically be something like you found a credit they weren't
| allowed to take and they owe $50,000 but the thing where
| they have a hundred billion in revenue and 0.2% of that in
| taxable profit was all by the book.
|
| Meanwhile smaller entities are _far_ more likely to have
| screwed up because they have fewer resources to navigate
| the complexity of the tax code, and their accounts are less
| complicated, which makes it easier for the IRS to find
| mistakes and therefore get money. So if you give the IRS
| more resources and tell them to do audits to maximize
| recovery, those are the people they audit.
|
| But that also involves auditing a ton of individuals and
| small businesses who _didn 't_ do anything wrong in order
| to find the ones that did, and they rightfully hate that
| because nobody is paying them for the actual costs of the
| audit where the IRS found nothing, which is why they keep
| lobbying to stop the IRS from getting more resources to do
| that to them. And if the IRS had to pay the taxpayer's side
| of the audit costs then their "recovery efficiency rate"
| would go _way_ down.
| bdangubic wrote:
| > It's not so much that it's hard, it's that it has a
| lower return on investment, because the IRS gets money
| from finding mistakes or intentional fraud....
|
| Isn't this _exactly_ what all megacorps are hoping for
| _everyone_ thinks? I am not saying that you are wrong but
| these megacorps are some of the most evil the
| Civilization has ever seen (see Meta) and now you and I
| are hired as tax attorneys - pretty soon (if not right
| away) one of us will go "this shit's very much so
| illegal but _who is actually going to audit us?_ - the
| answer, per your comment is basically no one because we
| think these megacorps and their lawyers are there to play
| by the book...
| AnthonyMouse wrote:
| In order for that to make sense to them, it would have to
| be impossible for them to avoid paying taxes _without_
| breaking the law, but the very nature of applying
| "corporate income tax" to an international supply chain
| makes that relatively straightforward.
|
| The general problem is this. You have a company with its
| headquarters in Ireland that designs a product in
| California, manufactures it in China and sells it in
| Germany. In which country did they make a profit and
| therefore owe taxes? It depends on what each subsidiary
| bought from the others and how much they paid, so they're
| going to structure their operations so that the profit
| ends up in the one with the lowest taxes. That's the
| defect in "corporate income tax" for international
| companies, and why it gives international companies an
| advantage over domestic ones.
|
| In order to fix that you need a tax code that says the
| taxes have to be paid to the country where whatever
| subset of their operations you want to tax is actually
| present. But then it's not "corporate income tax"
| anymore. If you want to tax them in the location they
| have workers it's payroll tax, if it's where they have
| buildings it's property tax, if it's where they have
| customers it's VAT, etc. You need it to be something they
| can't so easily move out of your jurisdiction. Because if
| you say that it's _profit_ then they 'll just arrange to
| make their profits in Ireland or Bermuda.
| oarsinsync wrote:
| Or the US could tax it's corporations just like it taxes
| it's citizens.
|
| Doesn't care that the citizens pay tax in whatever
| country they live in. If they earn over some 6 figure
| sum, they have to pay tax in the US as well.
|
| That would put US corporations at a distinct disadvantage
| on the global scene, so it won't happen. Disadvantaging
| citizens doesn't seem to matter as much.
| AnthonyMouse wrote:
| The thing the US does to its citizens is bizarre and
| atypical and it should stop doing that.
|
| But how would that even work for a corporation? Suppose
| you did that; is anything multinational going to remain a
| US corporation? Of course not, they'll just register in
| some other country. The CEO of Stellantis nee Chrysler is
| in Michigan but how many people can guess which country
| the corporation is registered in without looking it up?
| solidsnack9000 wrote:
| The problem here is not how the US taxes corporations,
| but rather that there are _different_ corporations
| involved. A regular citizen can not establish an
| additional, foreign citizen that "owns" them or
| "supplies" them with IP (or labor hours, &c) -- this kind
| of tax management accounting is not possible for
| citizens.
| oarsinsync wrote:
| They're not different unrelated corporations, they're
| subsidiaries of a parent that is ultimately a US entity.
|
| The citizen has literally upped and moved themselves
| entirely to a foreign country.
|
| The corporation has just forked a bit of itself
| elsewhere.
|
| And yet the corporation can't be taxed, but the
| individual can.
| AnthonyMouse wrote:
| You still haven't answered the question: What are you
| going to do when Apple or Google becomes "subsidiaries of
| a parent that is ultimately _not_ a US entity "? What
| about your proposal prevents them from registering the
| parent company somewhere else while changing nothing else
| about their operations? Making them file different
| paperwork doesn't accomplish anything.
| bdangubic wrote:
| would in this case help to treat Apple and Google as
| foreign company? No government contracts (or super strict
| rules to get them), tariffs...?
| AnthonyMouse wrote:
| > No government contracts (or super strict rules to get
| them)
|
| Now you've created a disadvantage for corporations to bid
| on government contracts, reducing competition and causing
| the government to pay more for stuff. Meanwhile the
| companies that actually bid are then the ones that
| specialize in lobbying the government and register
| locally and other corporations still register elsewhere.
|
| > tariffs
|
| If you were going to use that you could just as easily
| use VAT to begin with.
| bdangubic wrote:
| foreign-owned companies already are at disadvantage
| (rightfully so) getting gov contracts. so if you gonna
| try to evade paying taxes claiming you are based in Burma
| the government should treat you accordingly. given that
| there is no bigger customer than US government the
| companies might re-think their Burmese HQ?
| AnthonyMouse wrote:
| > given that there is no bigger customer than US
| government the companies might re-think their Burmese HQ?
|
| Only if the percentage of their business represented by
| US government contracts is more than the US corporate tax
| rate, i.e. only for companies like Lockheed whose
| business is focused on government contracts. But those
| are some of the largest "domestic companies" being put at
| a disadvantage by the existing tax system because they
| _already_ can 't use the same international tax avoidance
| strategies as other companies when they're required to
| use domestic supply chains by those same government
| contracts.
|
| Meanwhile the companies that do lower percentages of
| their business with the government would just stop doing
| business with the government at all, causing the
| government to pay more for things because that company
| would otherwise have been the one to get the contract by
| being the one to offer the government the best price.
| loeg wrote:
| This is a moved set of goalposts from the comment I
| responded to -- and we know that, because the original
| author had already confirmed that replying to me before
| your comment:
| https://news.ycombinator.com/item?id=47139400 .
| AnthonyMouse wrote:
| Both of those comments are making a consistent argument:
| It's easier (and I would add more cost effective) to
| target smaller taxpayers, so that's what the IRS
| typically does when given more resources.
| jandrese wrote:
| > It's not so much that it's hard, it's that it has a
| lower return on investment, because the IRS gets money
| from finding mistakes or intentional fraud. Megacorps
| have entire legal teams dedicated to preventing those
| things from happening
|
| Or: Megacorps have entire teams of people looking for
| ways to reduce their taxes, many of which are legally
| dubious but the risk of being caught * the size of the
| fine means it makes business sense to do it regardless of
| legality.
| thaumasiotes wrote:
| No, that's a contradiction of your parent comment. In
| _your_ model, doing more audits would increase "the risk
| of being caught" and have good ROI.
| AnthonyMouse wrote:
| > Megacorps have entire teams of people looking for ways
| to reduce their taxes, many of which are legally dubious
| but the risk of being caught * the size of the fine means
| it makes business sense to do it regardless of legality.
|
| "Legally dubious" is the _problem_ , because ambiguous
| laws are supposed to be interpreted most favorably to the
| defendant rather than the government, and then all
| parties have to incur much higher costs because the
| ambiguity means it goes to litigation, and there is a
| significant chance that all of those resources are
| consumed and it comes out in favor of the corporation in
| the end. The IRS much prefers to find cases where the
| taxpayer is _clearly_ violating the law.
| kccqzy wrote:
| It is very naive to think adding staff won't help. Just look
| at what the IRS did before staff was cut; they investigated
| Microsoft aggressively and announced $29 billion in back
| taxes for 2004 to 2013, plus penalties and interest.
| AnthonyMouse wrote:
| $29B over ten years is an annual amount of less than 1% of
| Microsoft's current annual revenue. Meanwhile the company
| is appealing it so the government hasn't actually won
| anything yet (but is incurring additional costs), and on
| top of that it means there is now going to be a court
| decision about how this works, which benefits the companies
| wanting to do it by clarifying the law so that _even if
| they lose_ the courts will have told them what they need to
| do differently next time in order to win. Of course, if
| they win then it 's even better for them because then they
| can just keep doing what they were doing before.
|
| The actual problem is that "transfer pricing" is inherently
| ambiguous and subject to manipulation but it would take
| structural legislative changes to the tax code (e.g. tax
| corporations using something other than corporate income
| tax) to take it out of play.
| kgwxd wrote:
| Or they weren't happen with the amount of bribe money we
| already know they paid, and so now they're being made an
| example of. Standard Mob protocol.
| 0xy wrote:
| This is an extremely common misconception (or lie, depending on
| who's saying it). The IRS, even before the cuts, targets
| exclusively the middle class.
|
| More agents = more middle class shake downs.
|
| 63% of the IRS' audits under the Biden admin targeted those
| earning sub-$200K.
|
| People earning $25K a year are MORE likely to be audited than
| those earning $200K, too.
| adolph wrote:
| > 63% of the IRS' audits under the Biden admin targeted those
| earning sub-$200K.
|
| In 2022 92.3% of filers reported income of less than $200K
| [0]. An audit rate of 63% is lower than what one would expect
| if audit-attracting behavior was evenly distributed across
| the population.
|
| 0. https://www.irs.gov/statistics/soi-tax-stats-individual-
| stat...
| 0xy wrote:
| The notion that audits should be evenly distributed is
| nonsense. Someone making sub-$200K usually has basic W2
| income, versus someone making $20M a year who likely has an
| extremely complicated web of capital gains, deductions,
| strategies, carry-forward losses etc.
|
| It doesn't even make sense from a pure cash point of view.
| It's better for an agent to audit someone making $20M and
| win a $500K judgement than it is for them to audit 1,000
| $25K earners and fleece them $500 a piece. What a waste.
|
| Audits should be exponentially lopsided, not targeted
| exclusively at the middle class.
| mrbluecoat wrote:
| > I.R.S. auditors have been pursuing Meta for about a decade
|
| Soon: "I.R.S. auditors have been pursuing Meta for about [a
| decade + length of current administration term]"
| dfxm12 wrote:
| _The agency has lost more than a quarter of its staff, withdrawn
| directives to auditors to crack down on aggressive tax shelters
| and permitted other auditing efforts to falter._
|
| Remember the fear mongering ads [0] Republicans ran during the
| 2022 midterms about arming IRS agents to act as a shadow army to
| go after every day law abiding people? As it turns out,
| Republicans were just talking about their own plans for ICE.
| Remember, every accusation from Republicans is an admission.
| Additionally, they don't care about crime, as they are
| specifically turning a blind eye to rich people and corporations
| breaking the law.
|
| 0 - https://www.cbsnews.com/news/republicans-87000-irs-agents-
| mi...
| b112 wrote:
| Solution (for big corp)?
|
| Mega is big enough to _buy_ entire islands, and be its own
| country. A corporate country. One with a very specific
| constitution, enshrining rights, but also?
|
| No corporate taxes.
|
| If done right, you could lure away Western judges, police, and
| more as they retire. Or retire early. You could lure them away
| not with high salaries, but with shorter work days, AI
| assistance, and with it being a tropical paradise.
|
| Compared to the billions Meta would pay in taxes annually, this
| endeavour would be far cheaper. And citizens would still pay
| taxes, of course.
|
| Now imagine if Google, Musk Corps, Meta, and others all created a
| consortium to do just this, and, to build and fund the initial
| island.
|
| I agree, not fully plausible. But... these guys can do a lot of
| interesting things, and I think if it was truly a tropical
| paradise, and land and housing was cheap and aplenty, lots might
| be interested in moving there.
|
| Certainly, hiring the "glue" of society would be easy. I know so
| many people who retire to third world nations, but anyhow...
|
| Yes, holes but, maybe something to ponder.
|
| Corporate towns have existed, why not corporate nations?
|
| edit:
|
| As I've said elsewhere, it's -20C outside my door, so a tropical
| paradise with cheap housing and flying cars, and AGI and beaches
| and free coconuts may be masking my thoughts a bit.
|
| So downvote me, as you are. It burns, but by god it's -20C
| outside _so that 's just fine_.
|
| (warms hands over burning post)
| floatrock wrote:
| Sounds easier to just buy a few congressmen and a circuit judge
| or two.
| b112 wrote:
| Listen my friend. It's -20C outside my house, so I'll kindly
| ask you to allow this fantasy to continue unabated in my
| mind, OK? A tech haven, filled with flying cars, and AGI, and
| warm sandy beaches, and...
| chii wrote:
| > Corporate towns have existed, why not corporate nations?
|
| because they dont need to do that. They can already obtain what
| they want with smaller tax havens that have already established
| trade/tax treaties, have existing facilities, infrastructures,
| etc.
| b112 wrote:
| This whole article is about "not anymore that way". So now we
| need a new way. A way where it isn't -20C this morning
| outside my door, OK?
| pkilgore wrote:
| Because they know for some problems it's easier to pay for
| the service than take the CapEx.
| laylower wrote:
| This would not work. Investors are still based in actual
| countries. Jurisdictions will also always have the ability to
| tax a % of revenue at source / where it was generated and not
| on profit rolled up through spvs to a couple low tax havens ;)
| avmich wrote:
| > Corporate towns have existed, why not corporate nations?
|
| Will those nations survive Maduragate? Won't in essence it make
| easier to deal with if they aren't under souvereign law, only
| international?
| dredmorbius wrote:
| What exactly is "Maduragate"?
| dredmorbius wrote:
| Self-response: I'm suspecting a mispelling of "Madurogate",
| referring to the US's abduction of the president of a
| sovereign state.
| TacticalCoder wrote:
| One question is: does the US wants to keep its big tech leader
| ship or not? Thankfully for the US the EU is nowhere in tech
| (biggest market cap is SAP and it's tiny compared to the US
| giants). But China is becoming big and quickly.
|
| RAM makers are going to feel the heat from China soon.
| Batteries makers. China is eating the world with its EVs.
| Drones, etc.
|
| If you're not nice with your corporations, they incorporate
| elsewhere: that's why the EU is nowhere in tech. Insane taxes
| since forever and a very strong anti-entrepreneurship mindset
| (in the EU you're a loser if you tried and fail, for example).
|
| Companies like Meta, Google, MSFT, Apple, etc. should receive
| medals and thanks from the US government for the insane amount
| of money they syphon of the _other_ countries and the wealth
| they create for the US.
|
| Some countries are understanding this: in the UAE for example
| Dubai is now the world's busiest airport _in the world_ for
| international passenger traffic. Some countries _really_ fucked
| up big times to allow this to happen. Dubai is also now a very
| important hub for commodities trading. And diamonds: Antwerpen
| /Anvers (Belgium) used to be the city where the most diamonds
| exchanged hands, now it's... Dubai.
|
| There _is_ such a thing as competition between nation states
| and at some point entrepreneurs simply pick the best place to
| launch their businesses. And having the IRS using "tactics" to
| say that Meta owes them tens of billions does not send a nice
| message to people wondering in which country it's best to
| incorporate.
|
| I now live in the country with the 2nd or 3rd highest GDP per
| capita in the world and that requires a mindset where
| businesses are welcome, entrepreneurs are welcome and the IRS
| doesn't feel like they're out there to get you at any cost.
|
| And I'm here because I voted with my feet, my wealth and the
| future wealth I was going to create.
| Nevermark wrote:
| There is being hospitable to startups, and there is being
| hospitable to massive corporate giants.
|
| Turns out there is a big difference in what "hospitable"
| actually means in these two cases. Although the tech giants
| don't want people to think so. They work hard to keep up
| their "scrappy" underdog patinas.
|
| I am not for punishing any organization for being successful,
| or for being big. But actual neutral tax parity, for the
| middle class up, would be good. The rich have so many tax-
| not-neutral alternate ways to do the same thing, but with
| lower or no taxes, it is ridiculous.
|
| Progressive taxation isn't effective for the most part. And
| when it is, the high disparity in application is its own kind
| of unfairness.
|
| But inescapable neutral tax treatment would remove so many
| high paying financial, legal and lobbying jobs. Who would
| subsidize political careers if we eliminated that work, and
| cut of those perverse incentives? Not a likely scenario.
| hirako2000 wrote:
| Everything in correct. But one omission there is politics.
| People occupy nations and don't all have the same interest.
| Those (felt, or actually) left aside, not benefiting enough
| from the macro growth speak and act in their interest.
|
| The people in the E.U arguably are more successful at getting
| their demands met. They typically are less fooled by the
| "American dream", they see Zuckerberg and the others for what
| they are, a tiny number of lucky, or privileged, sometimes
| just very gifted unicorns, the extreme majority won't make it
| so they want social welfare, this tax.
|
| The IRS going after big corp may simply be the result of this
| MAGA movement, which underneath really is just a popular
| uprise for the little guy to get a slice of the lie.
|
| Of course the current head of state is a master manipulator
| so this news may just be fluff to make his electorate happy
| pjc50 wrote:
| > If you're not nice with your corporations, they incorporate
| elsewhere
|
| > China
|
| China has capital controls and can still have billionaires
| "disappeared" (Jack Ma). And yet its industrial strategy
| seems to be working.
| OsrsNeedsf2P wrote:
| Oh no! Heaven forbid nations around the world tax mega
| corporations and lead to a more balanced way of living
| zf00002 wrote:
| Snow Crash's Franchise-Organized Quasi-National Entities.
| dsr_ wrote:
| Also a Torment Nexus.
| dctoedt wrote:
| > _Mega is big enough to buy entire islands, and be its own
| country. A corporate country. One with a very specific
| constitution, enshrining rights, but also?_
|
| It's a charming thought. But it can't possibly survive the
| brute reality that the world is full of people with guns,
| planes, drones, boats/ships, missiles, etc., who feel entitled
| to call the shots, and sometimes to take whatever they can from
| whomever they can.
| trollbridge wrote:
| Operating a military, maintaining positive diplomatic relations
| with other countries, and keeping your workforce pacified might
| be more expensive than you think.
|
| Not to mention that a lot of people prefer to live in a
| democracy instead of a giant company town, unless you
| compensate them really, really, well, and even then, well-
| heeled people are notorious for starting revolutions.
| pjc50 wrote:
| This is basically describing the Cayman Islands. Or, to lesser
| extents, UAE or Malta (e.g.
| https://taxjustice.net/2026/02/24/malta-the-eus-secret-
| tax-s...).
|
| The problem with this warm Galt Gulch idea is that someone has
| to do the actual work, and if the top level government is just
| a corrupt sinecure designed to shield the corporation from
| actually paying taxes, then _nothing works properly_.
| Comfortable island living is also surprisingly expensive, you
| have to import everything.
| mcs5280 wrote:
| Surely Zuckerberg's bribe check is in the mail already
| mentalgear wrote:
| You mean send to one of Trumpo's milliard Crypto *hitcoins,
| just like civilised nations like the UAE, Russia or the saudis
| do it?
| dylan604 wrote:
| You're brave enough to post about Trump, yet chicken*hit
| enough to not type out the word shit? What standards are you
| setting for yourself?
| kotaKat wrote:
| The "check" is what's given for a political favor and the
| "balance" is what goes up once the check clears.
|
| Simple enough lesson to me!
| ceramati wrote:
| This is one of those situations where I hope both parties duke it
| out to the maximum extent and completely obliterate each other.
| raverbashing wrote:
| I wonder how much Meta wrote off with their Metaverse adventure
| rwmj wrote:
| If it wasn't every last penny of their spend then they weren't
| being honest with themselves.
| Nevermark wrote:
| Well that was a 100% certifiably genuine ridiculous loss.
|
| It is interesting how corporations develop personalities, that
| can do some things well but reliably fail at others. No matter
| the funding, personnel or efforts. And in this case, by
| developing a personality I mean enabling Zuck.
| loeg wrote:
| About $16 billion a year, every year since 2022 or whatever.
| You can see RL spending in their public financials. Every
| company deducts ("writes off") R&D spending.
| masfuerte wrote:
| > contending the company lowballed the price of trademarks,
| customer agreements, software licenses and other rights it moved
| offshore
|
| At the same time they were telling HMRC (the British tax
| authority) that IP rights, etc. were incredibly valuable and a
| significant cost of doing business (in the form of payments back
| to the mothership), and that's why they made very little profit
| in the UK and didn't need to pay much tax.
| moomin wrote:
| I see a very funny fight on our hands.
| rolandog wrote:
| Ah, the next level in determining Schrodinger's cat's outcome
| is if the detector measures Zuckerberg's profit taxability
| instead of radiation decay; the measurement's results depend on
| who is carrying them out, where they've taken place and, in all
| instances, the cat kills itself due to our inability to fix the
| crazy rich-favoring taxation systems.
| pjc50 wrote:
| Trying to trace more detail on this:
| https://www.taxwatchuk.org/seven-large-tech-groups-estimated...
|
| That mentions the digital services tax; I remember some of HN
| being quite angry that "Europe" was trying to get a share of
| the immense wealth extracted from it by American
| multinationals.
| loeg wrote:
| "Wealth extracted from it" seems like a disingenuous framing
| of "voluntary market exchange of money for services." It's
| not like Europe is a colony. Tech companies only make money
| by providing goods and services people choose to pay for.
| m4rtink wrote:
| Given all then dumping, bundling, vendor lock-in and shady
| background deals I am not sure how voluntary this often is
| in practice.
| londons_explore wrote:
| Also, almost any web product could have the core
| functionality reproduced by 3 guys in a couple of weeks.
|
| The actual value is in the brand, siloed data, lockin,
| network effect, etc.
|
| China solved that by banning most western services and
| building their own, and many of the results are better
| than the west, yet the same network effects stop those
| services expanding.
|
| These are all fairly strong arguments for regulator's to
| step in because the market clearly is no longer working
| to direct the profit towards the best products.
| philipallstar wrote:
| What you mean is American multinationals were inventing
| things people wanted to pay for and the existing government
| rent seeking wasn't working.
| Muromec wrote:
| Wealth extracted from a company sounds like taxes.
| heavenlyblue wrote:
| The have to share their wealth because they are allowed to
| operate within a stable legal framework that everybody else
| is paying for except them. It seems like US isn't using their
| own taxes efficiently enough given that CEOs dont get killed
| on the street in the EU but they do get killed in the US. And
| these corporations arent willing to pay for that, well then
| they should not be allowed to operate here either.
| numbers_guy wrote:
| The less they tax corporations the more the burden will fall on
| income tax. These big multinationals have been defrauding
| countries worldwide for decades. The issue is at the core of the
| political turmoil we are experiencing.
|
| I'd like to know how much less income tax would be, if we could
| tax multinationals properly.
| erfgh wrote:
| The income tax would be less but so would be your salary. The
| corporate tax is another cost for the company.
| shagmin wrote:
| That's a bit tenuous. Corporate taxes are a cost after
| profit, which usually means whatever is left over after
| expenses. This means companies could pay higher salaries
| specifically to avoid corporate taxes, or invest in things
| instead.
| which wrote:
| The tax avoidance schemes used by most major US companies are
| to avoid US taxes on foreign income. Most developed countries
| have territorial tax systems so their companies do not even
| need to use these fancy legal maneuvers because the income is
| largely exempt anyways.
|
| In any given year corporate income tax is like 6-10% of federal
| receipts so even if that was doubled there would not be a huge
| decline in income taxes needed. The way the US does corporate
| tax is really also not that great from an economic perspective
| because it is a form of double taxation. The Estonian model of
| only taxing distributions incentivizes investment and avoids
| many debates over depreciation etc.
| josefritzishere wrote:
| Tax evasion is so pervasive at large companies that I have come
| to the conclusion that we need to start criminally charging the
| c-suite. Without personal consequences they're never going to
| change.
| loeg wrote:
| There's no crime element here.
| x3ro wrote:
| According to the laws written by politicians who happen to
| get large donations from those exact C-level folks, of course
| only for their campaigns :)
| loeg wrote:
| "According to the laws" is simply the basis of our entire
| criminal code, of course.
| ck2 wrote:
| We cannot tariff our way out of debt by taxing consumption by
| individuals just needing to eat and live
|
| Billionaires silo-ing massive wealthy beyond multiple lifetimes
| must pay their taxes
|
| and Trillionaire corporations
|
| Each state now has several Billionaires, there are almost 1,000
| in the USA
|
| They need to pay their damn taxes, a flat tax without deductions
| for everything over a million dollars of income per year
|
| https://en.wikipedia.org/wiki/List_of_U.S._states_by_the_num...
|
| https://worldpopulationreview.com/state-rankings/most-billio...
| timacles wrote:
| Get ready for a lot more billionaires and a lot more poor
| people in the next 5-10 years
| trollbridge wrote:
| Note that the issue at hand here is almost entirely about
| corporations earning money overseas and then trying to "import"
| the money back into the U.S. whilst dodging taxes. It's quite
| germane to the same concept as tariffs, although not the exact
| same thing.
| amelius wrote:
| IRS is using AI now too.
| ur-whale wrote:
| https://archive.is/Vsdqd
| zoobab wrote:
| I wrote about this 20 years ago:
|
| http://digital-majority.wikidot.com/forum/t-5766/software-pa...
|
| In the meantime, Ireland removed their 0% tax over patent
| royalties, but Holland kept it at 0%.
|
| https://en.wikipedia.org/wiki/Double_Irish_arrangement
| bobthepanda wrote:
| Your 20y old site gave me https errors when I tried to click
| it, fyi
| q3k wrote:
| Don't access it over https then? The link is http.
| 01HNNWZ0MV43FF wrote:
| Works fine on my end. The HTTPS URL gives a 301 permanent
| redirect to HTTP, and then I ordered some boner pills and
| put my social security number to confirm.
| siliconc0w wrote:
| If Corporates can offshore their IP I should be able to offshore
| my likeness and rent it back to myself to reduce my personal
| taxes.
| jedberg wrote:
| You can. It would just cost you so much in legal to not be
| worth it.
|
| The reason it's worth it for these companies is because the
| number of zeroes involved. The legal costs are a rounding error
| for them.
| monster_truck wrote:
| Also true for just not paying taxes at all. The number of
| times I have had people tell me that they just let it float
| for years so they can settle up for a fraction later is
| unbelievable.
| cheriot wrote:
| That sounds off. There's specific situations where the IRS
| will settle for less than the amount owed and they're not
| pleasant.
| edgyquant wrote:
| Not true. It's really common for 1099 people
| nzeid wrote:
| What? You have to demonstrate financial hardship or risk
| getting convicted.
| mothballed wrote:
| The people that get convicted seems to be either rich
| people blatantly evading taxes or people that write
| entire books about not paying taxes. Last I looked at the
| data for a normal person to get convicted just for
| running late on payments you basically have to tell the
| IRS to go fuck themselves and then brag about it publicly
| and stir up enough people they have to make an example
| out of you so no one else gets ideas. I'm sure there's
| odd other examples but they seem to be rare.
|
| By and large the IRS wants to squeeze you for what they
| can get, not burn up a bunch of public resources
| convicting people and hindering their ability to earn
| more money for the IRS.
| eikenberry wrote:
| I know people who didn't pay taxes at all for years and the
| IRS came after them them several times (put them on payment
| plans that they didn't pay) before giving up. They now call
| us chumps for paying taxes. It is pretty absurd.
| kylehotchkiss wrote:
| that's some sovereign citizen thinking right there, don't get
| your car window smashed in when you get pulled over for your
| diplomat plate :D
| RobotToaster wrote:
| Didn't Stephen Colbert claim he was an actor playing the
| character Stephen Colbert as some kind of tax dodge?
| conception wrote:
| What else would you describe him as doing?
| loeg wrote:
| > [The IRS] say the company failed to report roughly $54 billion
| in income and owes nearly $16 billion in back taxes and
| penalties.
|
| That's... just not very much? The claim is that Meta's global ex-
| US income for the last 15+ years is less than a single year's US
| income? I really wonder how they came up with this number.
|
| Disappointingly little detail in the article about how the IRS
| justifies the claim that the 2010 price was low (obviously, later
| profits would not be completely foreseeable at the time -- in
| 2010 Facebook was simply a much smaller business), or any detail
| about the 1986 law. It seems pretty farcical to retcon a purchase
| for being too cheap with evidence from 16 years later.
| snowhale wrote:
| the B is specifically the delta on the IP transfer pricing --
| the IRS is saying the 2010 valuation of the intangibles moved
| to Ireland was too low, and then projecting forward what the
| income _should_ have been attributed to the US entity under arm
| 's-length pricing. it's not Meta's total ex-US income, it's the
| gap between what was reported and what IRS thinks a proper
| cost-sharing arrangement would have produced. the hard part for
| IRS is always that the 2010 valuation is inherently speculative
| -- Facebook was pre-IPO and the IP value is defined by future
| performance you can't know at transfer.
| wawaWiWa2 wrote:
| IRS Tactics Against Meta, Opens a New Front in the Corporate Tax
| Fight
|
| There. I fixed it for you. Now you have a meaningful headline
| mannanj wrote:
| Yes great, and our local governments are also focusing on going
| after US persons who decide to register their vehicles in Montana
| and transfer ownership rights to LLC for privacy reasons. "Tax
| evasion" is the only legitimate use of that, they say, only to
| the small man of course.
| persedes wrote:
| One thing I'd love the US to do was something that happend in
| Germany ~2015, where they bought a lot of "Steuer-CD"s, with
| leaked info about people hiding money in offshore accounts. Then
| they allowed everyone to self report and applied more scrutiny to
| larger corporations which in total added several billions in
| revenue.
| mothballed wrote:
| The US passed FATCA in 2010, you can't operate a foreign bank
| that touches US anything without snitching out accounts with US
| persons as ultimate beneficial owner.
| gryffyn wrote:
| Germany continues to do that, North Rhine-Westphalia just
| bought a >1TB dataset in 2025.
|
| https://www1.wdr.de/nachrichten/landespolitik/offshore-steue...
| philipallstar wrote:
| Corporation tax is so annoying, with so many r&d caveats etc.
| Just tax outflows.
| laughing_man wrote:
| Differential pricing schemes are the primary way Corporations
| avoid corporate income taxes. I remember reading an article by an
| old Africa hand where he quoted the manager of an international
| corporation being exasperated with him and saying "You think I'm
| actually trying to make money here? This is all about taxes."
|
| In theory overpaying for modules produced by your subsidiary, or
| overpricing IP, in a low tax country is illegal, at least in the
| US, but so much of that is subjective it's difficult for tax
| authorities to actually do anything unless the numbers are
| eggregious.
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