1. Monthly archive
  2. July 2016

July 2016

Facebook could owe $5 billion in back taxes

Facebook is digging in over its fight with the Internal Revenue Service. The social network said that it faces a potential $5 billion tax bill after moving some of its assets to Ireland. The company’s tussle with tax authorities dates back to its decision in 2010 to transfer many of its global “intangible” assets — those not in the United States or Canada — to its Irish holding company. The transfer allowed the company to pay a lower tax rate on the profits made from those assets, tax experts say. (The corporate tax rate in Ireland is 12.5 percent, compared with 35 percent in the United States.)

The IRS said in court documents the way the assets were valued was “problematic” and that the “transferred intangibles” may have been undervalued by “billions of dollars." On July 28, Facebook, which reported more than $2 billion in profits during its second quarter, said it received a "deficiency" notice from the IRS and could end up with a tax bill of $3 billion to $5 billion, plus interest and penalties. "We do not agree with the position of the IRS" and will challenge the decision, the social network said in an Securities and Exchange Commission filing. If the IRS prevails it "could have a material adverse impact on our financial position." The tussle comes amid a worldwide reexamination of the tax strategies employed by US multinational corporations. French authorities raided the Paris headquarters of Google and McDonald’s in May and the European Commission is investigating tax deals that Amazon and Apple reached in Luxembourg and Ireland.

National Association of Broadcasters: FCC Maintaining Crossownership Ban Is Inexplicable

The National Association of Broadcasters says it has filled the Federal Communications Commission's quadrennial media ownership review docket with numerous examples of the "challenges" faced by newspapers, including declining ad revenues and even the fate of sidewalk newspaper boxes. In its latest filing at the FCC, NAB said that on that evidence of continuing newspaper challenges, an outright ban on crossownership "becomes increasingly inexplicable." It is trying to convince the FCC to change course and eliminate the newspaper-broadcast crossownership rules. The FCC is proposing a variation of its current failing-station waiver for failing newspapers.

But the ban would remain—and that despite the fact that FCC chairs from both parties have in the past conceded the rule is no longer necessary. Keeping the ban, says NAB, can only hasten the demise of print and can hardly be in the public interest. But the Democratic majority has voted not to eliminate the ban, and that will be the result unless the Republicans can convinced the majority to adjust the item in the next couple of weeks. NAB's latest filing is a story about the New York Times emphasizing digital over its print product. "To the extent that Commission’s rationale for restricting print newspaper ownership relates to viewpoint diversity or independent 'voices,'” NAB told the FCC, "a newspaper that has closed its doors can no longer provide a viewpoint or serve as a 'voice.'"

FBI probes hacking of Democratic congressional group

The FBI is investigating a cyberattack against another US Democratic Party group, which may be related to an earlier hack against the Democratic National Committee, apparently. The previously unreported incident at the Democratic Congressional Campaign Committee, or DCCC, and its potential ties to Russian hackers are likely to heighten accusations, so far unproven, that Moscow is trying to meddle in the US presidential election campaign to help Republican nominee Donald Trump.

The Kremlin denied involvement in the DCCC cyber-attack. Hacking of the party's e-mails caused discord among Democrats at the party's convention in Philadelphia (PA) to nominate Hillary Clinton as its presidential candidate. The newly disclosed breach at the DCCC may have been intended to gather information about donors, rather than to steal money, apparently. It was not clear what data was exposed, although donors typically submit a variety of personal information including names, e-mail addresses and credit card details when making a contribution. It was also unclear if stolen information was used to hack into other systems. The DCCC raises money for Democrats running for seats in the U.S. House of Representatives. The intrusion at the group could have begun as recently as June.

AT&T raises usage allowance on U-verse, GigaPower fiber broadband

AT&T has taken another step to sate the appetite of its broadband customers by once again increasing the monthly usage allowances for its U-verse and GigaPower broadband plans. U-verse customers that are on plans with speed tiers up to and including 300 Mps will see a monthly allowance of 1 terabyte (TB) of data.

What this means is that for customers that subscribe to Internet speeds below 12 Mbps, the new plans triple their current amount of data. Likewise, customers with internet speeds ranging from 12 Mbps to 75 Mbps will see their current allowance double. Meanwhile, AT&T GigaPower customers will receive unlimited home Internet data. As an added bonus, U-verse internet and DIRECTV or U-verse can pay for services on a single bill. Customers that subscribe to the 1 Gbps speed tier on the AT&T GigaPower network will automatically get unlimited home internet data at no additional charge. AT&T customers can also sign up for unlimited home internet data for $30 more a month.

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