Meta Uses A.I. Data Centers to Avoid Billions in Federal Taxes
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Meta Uses A.I. Data Centers to Avoid Billions in Federal Taxes
Unofficial Hacker News client; not affiliated with Y Combinator.
djoldman · · focus · HN ↗
Previously we've seen "The Secret IRS Files" from Propublica as well as other coverage of tax avoidance that never resulted in tax evasion charges. Coverage wide enough that it's arguably safe to assume that no laws were broken because there was quite the demand for an enforcement response.
The funny thing is that a more accurate title for these pieces would be, "Federal Government Allows [tax-paying entity] a Massive Tax Break." And then the piece would be all about how the senate, congress, and president either explicitly wanted there to be this extreme tax loophole or was incompetent and allowed something they didn't mean to allow.
Folks are continually getting upset and riled up about players in the economic system instead of who and what makes the rules.
An analogous example: everyone got cranky about Martin Shkreli, mostly because he raised prices on Deraprim, although also because many would label him a brash jerk. But he went to jail for finance stuff, not raising prices. Why? Because raising prices in the way he did wasn't something the feds thought was illegal or wasn't something they thought he could be convicted of.
Folks get mad at Musk, Zuckerberg, etc... if they're doing something illegal, ok yea that makes sense. If folks are mad about actions that are legal, it makes zero sense to be mad at the actor. Be mad at the people/entities who created the legal loopholes and laws.
jeremyjh · · focus · HN ↗
tacticalturtle · · focus · HN ↗
Some of the NYT’s past articles on accounting practices have been… strange to say the least.
This one from the last year on SpaceX was one of my favorites, with one of the experts claiming without evidence that carrying forward operating losses was only ever intended for companies struggling in difficult times:
<a href="https://www.nytimes.com/2025/08/15/technology/spacex-musk-government-contracts-taxes.html" rel="nofollow">https://www.nytimes.com/2025/08/15/technology/spacex-musk-go...
But yeah, this article seems to be pointing out something that may be legitimately wrong, and Meta has disclosed that as a risk.
oefrha · · focus · HN ↗
> (yes TFA implies that Meta is breaking the law, I'm not talking about situations where entities break the law).
then
> The funny thing is that a more accurate title for these pieces would be, "Federal Government Allows [tax-paying entity] a Massive Tax Break."
The funny thing is more accurate titles for articles that are unlike this one is something unlike this one's title? Sure, whatever.
djoldman · · focus · HN ↗
"A Federal Law Gray Area Allows Meta a Potentially Massive Tax Break."
... or something similar.
The focus could be less about Meta and more about the law. It's not like there's something special about Meta. The vast majority of corporations would do this if it was profitable.
jeremyjh · · focus · HN ↗
gamblor956 · · focus · HN ↗
That's what the original purpose was and it's widely acknowledged as such by the tax community. The final law ended up being broader but at the same time there was less effort by companies to avoid taxes back then. You'd have to go back to the congressional minutes for an authoritative source but the onus for that is on you.
tacticalturtle · · focus · HN ↗
They first enacted this in 1919. And then repealed it in 1933. Then when they restored in 1939, they clarified:
> The bill, together with the committee amendments, permits taxpayers to carry over net operating business losses for a period of 2 years. Prior to the Revenue Act of 1932, such 2-year carry-over was allowed. No net loss has ever been allowed for a greater period than 2 years. In the Revenue Act of 1932, the 2-year net loss carry-over was reduced to 1 year and in the National Industrial Recovery Act the net loss carry-over was entirely eliminated. As a result of the elimination of this carry-over, a business with alternating profit and loss is required to pay higher taxes over a period of years than a business with stable profits, although the average income of the two firms is equal. New enterprises and the capital-goods indus- tries are especially subject to wide fluctuations in earnings. It is, therefore, believed that the allowance of a net operating business loss carry-over will greatly aid business and stimulate new enter- prises." (Emphasis supplied.) H. R. Rep. No. 855, 76th Cong., 1st Sess.
From the footnote in page 6 of:
<a href="https://tile.loc.gov/storage-services/service/ll/usrep/usrep353/usrep353382/usrep353382.pdf" rel="nofollow">https://tile.loc.gov/storage-services/service/ll/usrep/usrep...
There. I’ve now done more work to validate my claim than the New York Times expert ever did.
I don’t know what they were saying in 1919 - but when a provision and its legitimate justification has existed for 80+ years, I think the NYT expert is being a bit ridiculous to suggest that a principle is being abused.