Case 3:16-cv-03777 Document 1 Filed 07/06/16 Page 1 of 4

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CAROLINE D. CIRAOLO
Assistant Attorney General

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JAMES E. WEAVER
Senior Litigation Counsel, Tax Division
AMY MATCHISON (CA SBN 217022)
Trial Attorney, Tax Division
United States Department of Justice
P.O. Box 683, Ben Franklin Station
Washington, D.C. 20044
Telephone: (202) 305-4929
Email: James.E.Weaver@usdoj.gov
Amy.T.Matchison@usdoj.gov
Attorneys for Petitioner
THE UNITED STATES OF AMERICA

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IN THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF CALIFORNIA

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UNITED STATES OF AMERICA,

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Petitioner,
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v.
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FACEBOOK, INC. AND SUBSIDIARIES
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(a Consolidated Group),
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Respondent.
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_______________________________________)

Case No.
PETITION TO ENFORCE
INTERNAL REVENUE SERVICE
SUMMONSES

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The United States of America, through undersigned counsel, petitions this Court for an

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order enforcing Internal Revenue Service (“IRS”) summonses served on respondent Facebook,

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Inc. and Subsidiaries (a Consolidated Group) (“Facebook”) pursuant to 26 U.S.C. § 7602.

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In support of this petition, the United States alleges as follows:

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1.

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This is a proceeding brought pursuant to Sections 7402(b) and 7604(a) of the

Internal Revenue Code (Title 26, United States Code) for judicial enforcement of the IRS

Petition to Enforce Internal
Revenue Service Summonses

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summonses described below.
2.

The Court has jurisdiction over this proceeding pursuant to Sections 7402(b) and

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7604(a) of the Internal Revenue Code and 28 U.S.C. §§ 1340 and 1345. Venue properly lies

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within this district.

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3.

This proceeding is appropriate for assignment to the San Francisco or Oakland

Divisions since Facebook is headquartered in San Mateo County.
4.

The IRS is conducting an examination of the federal income tax liability of

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Facebook for the tax period ending December 31, 2010. Part of the IRS’s examination concerns

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matters arising under certain agreements between Facebook Inc. and Facebook Ireland Holdings

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Limited (“Facebook Ireland”) purporting to transfer rights associated with Facebook’s

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worldwide business to Facebook Ireland, with the exception of the United States and Canada.

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Declaration of Revenue Agent Nina Wu Stone (“Stone Decl.”) at ¶¶ 2, 17-18.

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5.

Nina Wu Stone is a Revenue Agent employed in the Large Business and

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International Division of the IRS, assigned to the aforementioned Facebook examination.

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Revenue Agent Stone is authorized to issue administrative summonses pursuant to 26 U.S.C.

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§ 7602, 26 C.F.R. § 301.7602-1, and IRS Delegation Order No. 25-1. Stone Decl. ¶¶ 1, 4, 5.

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6.

In furtherance of the examination for 2010 and in accordance with 26 U.S.C.

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§ 7602, on June 1, 2016, Revenue Agent Stone issued six IRS summonses directing Facebook to

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appear at 55 South Market Street, 6th floor, San Jose, California, 95113 on June 17, 2016, at

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1:00 p.m. and to produce for examination books, records, papers and other data as described in

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the summonses. Stone Decl. ¶ 6 & Exs. 1-6.

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7.

In furtherance of the examination and in accordance with 26 U.S.C. § 7603, on

June 1, 2016, Ms. Stone served an attested copy of each of the summonses on Facebook by

Petition to Enforce Internal
Revenue Service Summonses

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personal delivery to David Wehner, the Chief Financial Officer for Facebook. Stone Decl. ¶ 7,

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Exhibits 1-6.

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8.

Facebook failed to appear on June 17, 2016, the date scheduled for compliance

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with the summonses, and did not produce the books, records, papers, and other data demanded in

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the summonses. Facebook’s failure to comply with the summonses continues to this date. Stone

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Decl. ¶ 8.

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9.

The books, records, papers, and other data demanded in the summonses are not

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already in the possession of the IRS. During the course of the examination, Facebook has

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provided the IRS with some documents; however, Facebook has not provided documents in

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response to the summonses at issue here. To the extent Facebook earlier provided documents

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that would also be responsive to a summons request, the IRS is not seeking production of those

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documents. Stone Decl. ¶ 10.

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10.

All administrative steps as required by the Internal Revenue Code for issuance

and service of the summonses have been followed. Stone Decl. ¶ 11.
11.

There is no “Justice Department referral,” as that term is described in Section

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7602(d)(2) of the Internal Revenue Code, in effect with respect to Facebook for the taxable

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period ending December 31, 2010. Stone Decl. ¶ 12.

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25.

In order to obtain enforcement of a summons, the petitioner must establish that

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the summons: (1) is issued for a legitimate purpose; (2) seeks information relevant to that

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purpose; (3) seeks information that is not already within the IRS’s possession; and (4) satisfies

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all administrative steps required by the Internal Revenue Code. United States v. Powell, 379

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U.S. 48, 57-58, (1964).

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26.

In further support of this Petition and incorporated herein by reference, the United

Petition to Enforce Internal
Revenue Service Summonses

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States submits the Declaration of Revenue Agent Nina Wu Stone. The United States has met the

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Powell factors through these documents.

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WHEREFORE, petitioner, the United States of America, seeks the following relief:

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A. That this Court enter an order directing Facebook to show cause in writing why it

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should not fully comply with and obey the aforementioned IRS summonses and every

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requirement thereof as enumerated in the Declaration of Revenue Agent Nina Wu

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Stone;

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B. That this Court enter an order directing Facebook to appear before Revenue Agent
Stone, or any other proper officer or employee of the Internal Revenue Service, and

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produce for examination books, records, papers and other data as required by the

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summonses;

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C. That the United States of America recover its costs in this action; and

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D. That the Court grant such other further relief as it deems just and proper.

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Dated this 6th day of July, 2016.
CAROLINE D. CIRAOLO
Assistant Attorney General

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/s/ James E. Weaver
JAMES E. WEAVER
Senior Litigation Counsel, Tax Division

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/s/ Amy Matchison
AMY MATCHISON (CA SBN 217022)
Trial Attorney, Tax Division
United States Department of Justice
P.O. Box 683, Ben Franklin Station
Washington, D.C. 20044
Telephone: (202) 305-4929
Email: James.E.Weaver@usdoj.gov
Amy.T.Matchison@usdoj.gov

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Petition to Enforce Internal
Revenue Service Summonses

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