I.R.S. Tactics Against Meta Open a New Front in the Corporate Tax Fight

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by Jesse Drucker

February 24, 2026

AI-Generated Deep Dive Summary

The Internal Revenue Service (IRS) has opened a new front in its battle against corporate tax avoidance by targeting Meta, the parent company of Facebook and Instagram, over $16 billion in unpaid taxes and penalties. The agency is challenging how Meta values offshore intellectual property, such as trademarks, customer agreements, and software licenses, arguing that the company underreported its income by roughly $54 billion. This multibillion-dollar dispute marks a significant shift in IRS tactics, as it now relies on real-world profit data to challenge corporate tax strategies that shift profits to low-tax jurisdictions. The IRS has been auditing Meta for nearly a decade, contending that the company undervalued its offshore assets. The new approach in this case could set a precedent, potentially recovering hundreds of billions in taxes from other multinationals. The agency’s efforts are part of a broader push to combat aggressive tax avoidance by companies like Amazon, Microsoft, and Coca-Cola, which have historically funneled trillions of dollars to island tax havens. Meta has pushed back, suing the IRS in U.S. Tax Court to halt its enforcement actions. This litigation is one of the largest tax battles between the IRS and a company in U.S. history. The outcome could hinge on whether the IRS can effectively enforce provisions of the tax code aimed at curbing offshore profit shifting, as outlined by tax consultant Stephen Curtis in 2024 testimony before the Senate Budget Committee. The case also raises questions about the IRS’s capacity to tackle corporate tax avoidance under the second Trump administration. The agency has faced challenges, including a 25% reduction in staff and reduced enforcement efforts against aggressive tax shelters. If successful, the IRS’s new tactics could significantly alter the landscape for global corporations and their offshore profit-shifting strategies. This dispute highlights the ongoing tension between multinational tech companies and U.S. tax authorities over corporate tax compliance. The outcome of the Meta case will have far-reaching implications for corporate tax policy and could influence how other multinationals report and pay taxes on their intellectual property.

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Originally published on NYT Homepage on 2/24/2026