In 2010, Facebook was a very different company than it is today. It had fewer than a fifth of the 2.5 billion monthly users it has today. It had no mobile advertising revenue, and its total revenue was a little under $2 billion, far less than the $70.7 billion the company generated last year. 

Back then, as the company was growing, its new chief operating officer, Sheryl Sandberg, suggested that Facebook should explore ways to lower its tax burden by creating a place to park foreign profits in a friendly jurisdiction. In Facebook's case, that jurisdiction was Ireland, where other tech companies had built European offices for that same purpose.

Around the same time, the Internal Revenue Service started to crack down on these types of corporate maneuvers by tech companies. The agency launched a team to pursue big-name tech companies, and Facebook drew its attention. 

It makes sense that the IRS took an interest, since companies moved assets and profits to locations with little-to-no corporate income tax, allowing them to stash money outside the reach of the United States. The IRS argues that Facebook underestimated the value of the tangible assets associated with the entity it set up in Ireland.

In Facebook's case, that meant it avoided paying the 35 percent corporate tax rate on what the IRS says is $21 billion worth of assets. Facebook paid a lower rate as a result of a 2017 tax law and says that it is actually owed a refund since those assets were worth less ($14 billion) at the time. 

The case has been going on since 2010, though it has stalled at times due to IRS budget cuts designed to curtail what some lawmakers believed were overly aggressive investigations. In fact, Pro Publica reported that the IRS, at one point, wasn't able to move forward with a case because it couldn't afford an expert.

Now, we're about to see the fight escalate as the case goes to court in the next week. The stakes could be high for both parties, with Facebook potentially on the hook for $9 billion in taxes. The IRS also has a lot on the line. If Facebook wins (which analysts seem to believe is likely), it would set a precedent and make it harder to pursue these types of cases in the future. 

That could be a big deal for the government considering the number of tech companies with cash-flush Irish subsidiaries. For example, in 2018, Apple said it had $252 billion in cash held overseas and paid $38 billion in one-time taxes. 

If the IRS is unable to win against Facebook, it could embolden other companies to challenge the agency's determination that they owe taxes on the estimated value of assets held outside the United States. It could also encourage those companies to move even more profits to those locations. 

If Facebook loses, it could face a substantial tax bill that exceeds even its $5 billion settlement with the FTC last year over privacy violations. Considering the government's renewed efforts to rein in big tech companies, it's not hard to imagine that if the IRS wins, this will be just the first example of many. After all, you know what they say about taxes--they're inevitable.