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United States District Court for the Northern District of California, San Francisco Division
June 19, 2017, Decided; June 19, 2017, Filed
Case No. 16-cv-05884-LB
ORDER GRANTING IRS'S SUMMARY-JUDGMENT MOTION; DENYING FACEBOOK'S MOTION TO COMPEL
Re: ECF Nos. 28 & 38
This is a Freedom of Information Act ("FOIA") case regarding the IRS's audit of Facebook's 2008-2010 tax years.1 Facebook disagrees with the results of the audit, which increased its 2010 income by $84,915,248, and so it challenged the IRS's determination in Tax Court and separately requested audit-related documents through two FOIA requests. After the government requested a FOIA response-deadline extension, Facebook sued the IRS to compel the production of responsive documents. The IRS has since produced thousands of pages of documents.
Facebook now moves to compel production of electronic, native-form documents that contain metadata.2 The IRS moves for partial summary judgment on that request, [*2] though, because it says Facebook did not ask for such documents in its FOIA requests and thus did not exhaust its administrative remedies.3
The court held a hearing on the motions on June 15, 2017. The court grants the IRS's motion because Facebook did not exhaust its administrative remedies with respect to its request for electronic documents and metadata. The court denies Facebook's motion to compel. This order also documents the IRS's agreements about the form of production.
The IRS audited Facebook's 2008, 2009, and 2010 tax years.4 The audit focused "on the 'transfer price' at which Facebook licensed certain technology and other intangibles to [its] Irish affiliate."5 And it resulted in a July 2016 notice of deficiency, in which the IRS alleged "that the intangible property transferred . . . had a net present value of $13,883,630,000, thereby increasing Facebook's income in 2010 by $84,915,248."6 The IRS determined that Facebook had an income-tax deficiency.7
According to Facebook, the IRS "did not provide any economic analysis or otherwise express its position."8 So, Facebook sued the IRS in Tax Court "by filing a Petition for a redetermination of its deficiency," and separately [*3] sought audit-related documents through FOIA — the subject of this litigation.9
Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.
2017 U.S. Dist. LEXIS 94200 *; 2017-1 U.S. Tax Cas. (CCH) P50,259; 119 A.F.T.R.2d (RIA) 2017-2250
FACEBOOK, INC. AND SUBSIDIARIES, Plaintiff, v. INTERNAL REVENUE SERVICE, Defendant.
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