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.
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%.
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.
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.
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.
https://archive.ph/2026.02.24-124153/https://www.nytimes.com...
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.
Are you claiming this link was manipulated? Because otherwise that's irrelevant to this discussion.
IIRC, the archive.today has a grudge against someone trying to figure out their identity, and the manipulations and other shady behavior have been solely focused on that person.
> The Wikipedia guidance points out that the Internet Archive and its website, Archive.org, are “uninvolved with and entirely separate from archive.today.”
[ERROR] Isn't archive.ph associated with .org?
[EDIT] ERROR tag added. In fact, it is not, thanks to replies for fixing my ignorance.
No.
> Guidance published as a result of the decision asked editors to help remove and replace links to the following domain names used by the archive site: archive.today, archive.is, archive.ph, archive.fo, archive.li, archive.md, and archive.vn.
Absolutely not about this, as is clearly reported in the linked article.
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.
Kafka was trained as an attorney, after all.
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?
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.
The technology for legal review is extremely fast and effective.
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.
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.
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.
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.
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.
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?
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.
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.
I take it you've never been party to a civil lawsuit between business entities or with the government.
>> 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.
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.
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.
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.
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.
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...
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/
*edit: since my words were take in bad faith
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.
Of course, it may not make sense to select returns uniformly at random for audits...
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.... they were audits according to IRS. This is from the FOIA'd audit numbers from IRS via TRAC.
I think you misread the parent comment, who said exactly the opposite.
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.
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>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."
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.
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.
Which would suggest that perhaps that level of wealth doesn't need to exist in our society.
But then the inquisition arrives saying this is socialism or whatever.
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.
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.
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...
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.
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.
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.
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.
"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.
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...
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.
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.
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.
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.
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 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.
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?
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.
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.
Soon: "I.R.S. auditors have been pursuing Meta for about [a decade + length of current administration term]"
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.
Simple enough lesson to me!
There. I fixed it for you. Now you have a meaningful headline
https://www1.wdr.de/nachrichten/landespolitik/offshore-steue...
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.
I'd like to know how much less income tax would be, if we could tax multinationals properly.
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.
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...
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...
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)
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.
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.
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.
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.
Will those nations survive Maduragate? Won't in essence it make easier to deal with if they aren't under souvereign law, only international?
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.
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
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.
> China
China has capital controls and can still have billionaires "disappeared" (Jack Ma). And yet its industrial strategy seems to be working.