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Comment by riazrizvi | Hacker News Reader

Surely this is more about political coercion than tax? Amongst all US companies that offshore profits, including the likes of Halliburton, Facebook has been singled out because the US administration wants the company to do it's bidding regarding policy and algorithms for political advertising? Especially considering all the other political reprisals and pardons that are in the news, following the impeachment acquittal. I expect this story to quietly disappear, or some mild fine to result, followed by a not-so-mysterious tweak to how political advertising is handled on the platform. I don't expect it reduce large corporation tax evasion as much as people are crowing here.

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A lot of unfounded speculation in your comment. It seems more politically-motivated than rooted in facts.

Secondly, have you done your research? Surely Facebook is not the only company being targeted by the government right now. I can assure you that, surely there are more.

Thirdly, as much as I might dislike an administration, I won't take the giant, speculative leap as to assume that I know exactly what they're thinking.

Fourthly, if this "quietly disappears", why would you automatically assume the administration's involvement? Again, there are presidents I strongly dislike, but part of remaining objective requires grounding your position in fact. Facebook has world class lawyers. Having worked in the legal field for numerous years, I am more than positive that Facebook has made many things "quietly disappear" on their own.

>unfounded speculation

It's not unfounded in the days of pardons to political donors, political donations to jury members, and firing of whistleblowers and witnesses.

You are allowed to assume bad faith when the entity has time and time again showed bad faith. This is suppose to be one of the detriments to acting in bad faith time and time again.

> the days of pardons to political donors, political donations to jury members, and firing of whistleblowers and witnesses

How long have we been in these "days," would you say?

Since the Senate voted, so about a week?

If you think this is something new, please read some history:

https://en.m.wikipedia.org/wiki/Federal_pardons_in_the_Unite...

I’m well aware of the history. What’s new is the President’s newfound knowledge that his corruption has no consequences.

If you think that's new, you're obviously not aware of the history. How would you compare and contrast the corruption and lack of consequences of say, the Iran Contra conspiracy, to Trumps scandals?

Just to throw you a bone, you'll notice that AG Barr was involved in the pardons resulting from the Iran Contra affair as well.

This President just learned he is immune to consequence. He’s not familiar with history.

Only you are smart enough to know everything. Not the dude who beat 16 establishment Republicans including Jeb!, and Hillary "it's my turn" Clinton who steamrolled Sanders with her establishment clout.

These things you're mentioning are minor issues which have been blown out of proper proportion and context by a hostile media spoon-feeding political propaganda to a willing segment of the public.

That said, none of the things you mentioned are related to investigating tax evasion.

"Oh, you sneezed on Sally when you were in first grade without apologizing? You must be guilty of armed robbery."

Corruption is never a minor issue unless you live under the rule of winnie the pooh.

I hate to say this but a lot of unfounded speculation in your comment as well.

"Secondly, have you done your research? Surely Facebook is not the only company being targeted by the government right now. I can assure you that, surely there are more."

Can you back this up with some factual information? Would love to know more about other companies. Thanks.

Just this month, the Department of Justice announced the largest-in-history FCPA case against Airbus, totaling 3.9 billion in fines[1]. The government's agenda is much larger than you're aware of, apparently.

Unfortunately, the media loves to scandalize things, throw out big names, and hype-up news. The problem is when people just take it, run with it, and parrot it back in the public square.

Anytime a company rises to the stature of Facebook, the probability that they will come into the government's cross hairs is much higher.

[1] https://www.natlawreview.com/article/airbus-to-pay-unprecede...

Bud we entered a post fact world, especially when it comes to politics, decades ago.

This is not true and just more political talking points. You're contributing to the problem you describe.

Oh what “fact-based” source do you get news from and how do they verify the “fact”? Do they use floating signifiers like “democracy”, “freedom”, “liberal”, “middle class”, “big government”? Do they have opinion columns and private ownership? It is impossible to act as if you’re both fact based and as if you’re serving your readership at the same time—the very act of choosing which stories to cover is deeply political itself, and that’s before you hit framing, what parts of the story you choose to emphasize, the goddamn headline (often written by a different person).

The National Review for instance is excellent at fact-checking, but I would not call the NR a factual paper or a paper of record.

There are no rocks on which to build these days (probably ever), just a series of private rides you can choose to be taken on.

I understand that lawyers are taught to think logically and to support their arguments, so I would appreciate your analysis on our exchange, which looks to me like this:

MY COMMENT: question / observation / speculation / hypothesis-with-circumstantial-evidence-to-support-speculation / expectation / expectation

YOUR REPLY: assertion / speculation

question / speculation / assertion

personal observation

question / self-evident-assertion / assertion / assertion

The main complaint to my comment was about unsupported speculation, which I don't see, instead I do see it in the reply. I genuinely want to do better if I should.

Funny that you broke it down like that. I think since forums like this aren't for formal arguments, it's fair for the questions to be seen as more than suggestive, especially with your phrasing.

"I genuinely want to do better if I should." I would have to respectfully call you out on that. You're main interest appears more to show how right you, or at least more right.

Also, your breakdown of the encounter is dishonest. You literally said "Surely" it was about political coercion. And you didn't even attempt to mildly address the allegations brought by the government against Facebook. Next time, you might want to use the world "might" or "potentially".

"Amongst all US companies that offshore profits, including the likes of Halliburton, Facebook has been singled out because the US administration wants the company to do it's bidding regarding policy and algorithms for political advertising"

So because other companies do it, it's okay for Facebook to do it -- that's your rationale? Not good, and all I see is a lazy attempt at utilizing "circumstantial evidence" that can't withstand the test of scrutiny. When cracking down on something, the government will almost always start with the big names in the industry to send a message. Why did you overlook that possibility, or why is that possibility less feasible? These are important questions that should've been asked and addressed.

Furthermore, the President has granted somewhere around 25 pardons; about two of those were actually controversial. The rest barely made headlines, and most haven't. You referenced this as part of your circumstantial evidence. Once again, this absolutely doesn't pass the test of scrutiny.

I didn't write your comment -- you did. Which is why I called you out on throwing claims out there, without even the slightest reference to any reasonable evidence. Throwing out overly-confident words and sloppily referencing acquittals, political reprisals, and talking about what you expect to happen is a good representation of an unfounded comment. Airbus just received the largest-in-history FCPA fine by the DoJ, totaling 3.9 billion. Is the President trying to bring them down as well? Maybe to help out Boeing? If I were to say, "Surely this is about helping Boeing", I would need much more than a couple of references to current events.

Lastly, I'm not a lawyer. Good day.

>"Especially considering all the other political reprisals and pardons that are in the news"

What news are you talking about? Whatever news you're watching is only giving you one perspective on events, so this "observation" is not helpful on its own.

The rest of your comment is similarly rooted in assumptions and speculation borne out of a hostile media's interpretation of recent events, so the conclusions you're reaching are built on a far less sturdy foundation of "evidence" than you may think.

The media is supposed to be hostile. They are always hostile to the administration. It is their job as one of the checks on power enshrined in the constitution. Why do you think freedom of the press is in Amendment one?

That's not always the case. The mainstream media - both the news media and entertainment media more broadly - was extremely accommodative and deferential to the Obama administration largely because he was on the mainstream media's political "side".

Given this, many actions taken by the Obama administration that would have dominated the news cycle as impeachment-worthy if taken by the Trump administration were simply ignored or brushed aside by the Obama administration's media allies.

> The mainstream media - both the news media and entertainment media more broadly - was extremely accommodative and deferential to the Obama administration

You don't watch FOX News much, I assume

You mean like the impeachment worthy scandal that Fox News was all over during Obama’s two terms?

The one where he wore a tan suit. Or the one where he asked for fancy mustard?

They were so hostile to him they had to find minor offenses to scream about.

And even his “friendly” press threw him under the bus for drone strikes and border detentions.

Good comment, and good way of looking at things.

However, currently it's not possible to obtain a lot of facts about the inner workings of this administration, since it is effectively above the law in terms of things like subpoenas.

The subpoenas you're talking about were purposely not taken to court.

Some were, and based on the timeline provided by the District Court it was clear that it would be nearly impossible for the matter to be resolved expediently. i.e.: before the next election, which the President was alleged to have abused his power to interfere in. It would rely on Congress trusting that the Supreme Court would deviate extraordinarily from its normal process and decide a matter in a very short time.

And on top of this, Congress has the power to grant subpoenas. The Supreme Court has affirmed this right since the 19th Century and it's absurd that defenders of the President keep insisting that every subpoena must be fought in court, all the way up to final appeal, in order to be valid. That is expressly not what Courts have said in the past. See: https://www.scotusblog.com/2019/07/cases-and-controversies-c...

The Supreme Court will deviate extraordinarily from its normal process and decide a matter in a very short time when national politics are at stake. For example see Bush v. Gore, 531 U.S. 98 (2000). The whole case took only a few weeks, and the court delivered its decision just one day after oral arguments.

"We don't know who's about to be President in a month" is a fairly uniquely urgent scenario that doesn't apply here, though.

Dahlia Lithwick described how the courts are intentionally making the political choice to slow-walk various Trump matters in order to enable his behavior:

https://slate.com/news-and-politics/2020/01/courts-slow-trum...

I guess if Congress isn't happy with the outcome, they can just impeach the president... Woops!

Sucks when the other party uses the rules against you.

If you believe you're being attacked by politically motivated partisans, it's your duty to obstruct them by whatever lawful or procedural means available.

It's all just a dog and pony show anyway. The news just want to drum up advertising because they're a dying media. The best way they have found to do that is click-bait political fighting.

Congress' unprecedented barrage of subpoenas force the administration's hand here. You may find it "absurd", but unprecedented animus requires unprecedented defensive measures.

> Congress' unprecedented barrage of subpoenas force the administration's hand here. You may find it "absurd", but unprecedented animus requires unprecedented defensive measures.

Not sure where in the Constitution this appears...

The administration's use of legal defensive measures is not itself illegal or prohibited by the Constitution.

Claiming that congress doesn't have subpoena powers and everything needs to be taken to Supreme court is not "legal defensive measures". That is the only thing that matters to this sub-thread here. Remember, it is only a while ago that the tables were turned and republicans were happy to claim then President Clinton did not have any powers to defend.

Because they'd be stuck there for years.

This emoluments suit has been going since 2017 and got tossed on appeal via a technicality instead of being evaluated on merits, for example, and it hasn't even gone to SCOTUS yet: https://www.politico.com/news/2020/02/07/appeals-court-rejec...

It may be speculation, but I honestly can't categorically state it is unfounded. I have no love for FB, and, as parent memtioned, they are hardly the only beneficiary of this particular loophole.

Then, if you recall FB recent stance on e2e, Barr's and Lindsay's comments, the question of political influence over IRS becomes much less an unlikely proposition.

It does not make it automatically true, but let us not pretend that IRS moves in mysterious ways.

To claim otherwise is to ignore context in which IRS goes after them. It may be completely unrelated, but it does raise questions.

do you really think that this isn't a case of selective law enforcement?

the IRS is famously understaffed, why Facebook? why not Apple? or Amazon? or will they go after them next??

edit: and google?

My guess: Facebook makes an enormous percentage[^1] of its revenue in the US compared to Amazon/Apple. This might make it legally more tricky to argue that its Irish profits are not actually US profits.

Also the IRS would definitely go after Amazon instead if it were politically motivated.

[1]: Can't find absolute numbers but US users have 10x revenue per user: https://www.statista.com/statistics/251328/facebooks-average...

> Also the IRS would definitely go after Amazon instead if it were politically motivated.

amazon is running computing services for the government, which makes me doubt it.

And what about Google?

Amazon is suing the government right now because of the abrupt cancellation of a 10 BILLION dollar government cloud contract that the likely were on the way to winning, that the Trump administration intervened with likely because they don't like the Washington Post (owned by Bezos) reporting of Trump's corruption.

https://www.latimes.com/business/technology/story/2020-02-13...

Also if FB is being picked out of all large companies by the Trump administration for something like this which most all large companies have been doing for decades it's easy to believe it may be to get FB back in line with the fake narrative of "stop silencing conservatives on FB" which is a narrative that doesn't exist, but has been pushed by Trump admin folks online for a while now.

According to Complianceowl, they may also be in the crosshairs (I have no idea myself):

> Secondly, have you done your research? Surely Facebook is not the only company being targeted by the government right now. I can assure you that, surely there are more.

But, if this administration does have something to do with targeting Facebook, why would they not go after Amazon if this is politically charged? Trump has been vocal about his hatred of Bezos and Amazon, and his base would love to see it. It would be a fairly safe thing to go after, and honestly even I would have trouble being outraged by it as a non-Trump person.

Also, does the IRS need staff to sue an entity? If they wanted to audit Facebook, sure, they would need staff. But in this case, it's a lawsuit. All you need is lawyers. And since lawyers aren't busy doing IRS audits, they probably have a lot more free time to handle billion dollar lawsuits.

> including the likes of Halliburton

Halliburton uses a different scheme. Its assets are physically offshore, though there are R&D and depreciation shenanigans (buy out of American profits, depreciate against onshore expenses, and tax the production where it happens).

Facebook, on the other hand, claims most of its assets, which are principally intangible, live in Ireland. Its American sub is charged massive licensing fees by the Irish sub, thereby shifting away profits.

Legally speaking, apples and oranges.

This literally sounds like apples and apples to me, unless you really think "cloud computing" occurs in space or something. If the servers are in Ireland, then their physical assets are offshore.

Except, the vast majority of Facebook's servers aren't in Ireland. They couldn't be for the platform to work. There is a datacenter in Ireland, but there are 11 datacenters in the US. I guarantee the majority of data and compute power is in those US datacenters.

> If the servers are in Ireland, then their physical assets are offshore

This is correct. But the fraction of assets which are physical are high for Halliburton and low for Facebook.

Data is a physical asset. I'm pretty sure that is their largest asset class.

It was started under the last administration. After going for four years, it's a bit late to "quietly disappear". https://money.cnn.com/2016/07/29/technology/facebook-irs-pen...

Damned if you do, damned if you don't. Might as well get $9 Billion to go with it.

Does the US administration have the authority over the IRS to file and pull the suits at their will?

Yes. The commissioner of the IRS is appointed by the President (current one appointed by Trump) and can be dismissed at any time without cause. So if you want to continue in that role, you will do what the President wishes. You can always resign if you find the instructions not to your liking, of course.

Richard Nixon demanded that the IRS investigate his enemies, but the IRS commissioner at the time refused to do so and eventually testified against Nixon on this issue.

The IRS is a part of the Dept. of Treasury, which is run by Steven Mnuchin, a member of Donald Trump's cabinet.

No. That won't stop accusations of influence however. Each side believes that when the other side is in the White House they use the IRS to go after political enemies. Republicans particularly were very loud in accusing Clinton and Obama of using the IRS to go after people and groups. For example:

https://en.wikipedia.org/wiki/IRS_targeting_controversy

Not the same ballpark.

https://www.macrotrends.net/stocks/charts/HAL/halliburton/ne...

https://www.macrotrends.net/stocks/charts/FB/facebook/net-in...

https://www.macrotrends.net/stocks/stock-comparison?s=net-in...

> Surely this is more about political coercion than tax?

What's the difference? It good anyway for the US because it would set an important precedent for future litigation on the matter of profit offshoring.

I think the problem is the precedent would effectively be "Do what the president says or we'll single you out for punishment".

and it was'nt this case in previous administrations?

Not sure about your accusation, it might be true, I can't rule it out. After all, agencies can pick and choose who to target, and we are all seeing the political climate today.

BUT, on the other hand, IRS has to win this one case and all others will start negotiating. Once this is declared illegal, it's over for all. So they had to pick one case.

With companies that huge, everything is political. It comes with the size.

Don’t you think if it were political they’d go after Twitter or Reddit who are stricter about suspending and banning accounts and so on?

Twitter has already banned political advertising, and Reddit simply doesn't have the audience that Facebook does (and being a pseudonymous platform is a different paradigm).

I think they banned paying for political ads but not political ads that I or anyone might share (like sharing a Sanders clip)? The latter would of course be a serious infringement on expression.

> The lawsuit was originally filed in 2016 and widely discussed at that time.

What was the "coercion" in 2016 about? Tin foil hats?

If any company does it they all must do it. Punishment has to start some place.

Are you saying Facebook isn't doing its bidding on political advertising? From what I've seen, FB has been the most welcoming of the social media platforms.

$9B looks pretty economically-focused to me.

As is usually the case with this administration, sometimes you can agree on things they do but it is never for the right reasons.

i disagree on pretty much every underlying supposition here: the tax evasion whataboutism, “why facebook when everybody evades taxes?” US allowing these other companies to offshore profits, as if the IRS has the ability to, at any point, ask for that money back; The government having any use for the facebook; facebook being capable of coercion/ memes and advertising having any effect on the way people vote.

We know people read what they want into political media. the content may affect your experience on facebook but Facebook has not been proven to have any effect on the ballots.

Facebook was probably caught in the act. IRS probably found some legal loophole to actually sue facebook and has not yet found one for google, etc. whats more important to the irs? Getting facebook to change its content policies which would have zero effect on this upcoming election given everyone already knows how theyre going to vote, or 9 billion dollars?

Are you implying in the US the law is uphold only on political basis?

Guys, everything at that level, regardless of reasons, are political...it has nothing to do with right and wrong, just interests. Of course it has to be packaged with good reasons otherwise people won't buy it, but again very often they don't bother to give good reasons and push through anyway.

That said, I do believe that tackling offshore revenue is a good move.

> US administration wants the company to do it's bidding regarding policy and algorithms for political advertising?

Unfounded conspiracy theory?

Just because they haven't gone after other companies, doesn't mean they shouldn't go after Facebook. They might believe the other companies are guilty but don't have enough evidence to win the trial.

Facebook is clearly a US company. Founded and HQ'd in the US, so they should be paying US taxes.

Facebook does pay US taxes. That is not in dispute. But facebook does business all over the world. The question is about the proper handling of overseas income. How much of that should face local tax rates vs US tax rates?

It's a complex area of tax accounting and there are a lot of judgement calls to be made. This lawsuit is about one of those judgement calls.

> Facebook is clearly a US company. Founded and HQ'd in the US, so they should be paying US taxes.

If most of the advertisers are outside the US, most of the users are outside the US, and most of the servers are outside the US, I think you will agree that it's not reasonable to say ALL of the profit should be taxed in the US.

Which part of the profit should go where is an endless debate among pundits, politicians and academics.

Except Facebook makes most of its money from US users not from international users.

Also hard to argue that their campus that houses the majority of their employees in the US isn’t the one generating the IP.

Those things are true, but not really the point.

1) The entire issue here is about international revenue not US revenue.

2) Your second point is true but this IP was then sold to a subsidiary. The dispute is about the price paid in this sale, not about the origin of the IP.

> Except Facebook makes most of its money from US users not from international users.

Source? 96.75% of the world population is outside the US, of Facebook users it will be a smaller percentage, but it seems highly unlikely that most of the revenue will come from such a narrow base.

What a weird way to approach that claim. The population inside or outside the USA plays a tiny role. a) China and Russia aren't involved, so strike 2bn from that b) it's not about people "existing", it's about people being a customer (or product, whatever view you prefer), facebook is obviously more widespread in a first world, high tech society where practically everyone has a smartphone than in some thirld world country where electricity is rare and unstable and c) revenue per user. statista [1] claims it's much, much higher than in the rest of the world. With that coming in at a 3:1 or 4:1 or even 5:1, that alone would make the US a heavy weight in revenue.

[1] https://www.statista.com/statistics/251328/facebooks-average...

Does China use facebook? Don't they have their own thing?

Most of their servers aren't outside the US, though. The majority (not plurality, the majority) of datacenters are here.

The more I learn about what goes on in the world the more I ask myself "who does this benefit?" and many conspiracy theories seem to make a lot more sense. Governments and other large organizations have such a long and common history of doing shady things that it's really hard to give them the benefit of the doubt.

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