Meta told the IRS its AI data centers are experimental to shave $6 billion off its tax bill

Meta has utilized an experimental designation for its AI data centers in an effort to reduce its tax liability by $6 billion. This classification allows the company to claim tax credits on the AI chips purchased for its experimental facilities, which are considered "pilot models." Meta began using this tax credit two years ago, resulting in a $2 billion tax savings in 2024 and $3.9 billion in 2025.

The company is currently the largest claimant of this particular tax credit, with its Auditor, EY, approving the plan and suggesting other firms should follow suit. Meta's reserve for potential IRS challenges has increased by 45% in the past two years, from $12.9 billion to $18.74 billion. Lisa De Simone, a former EY tax adviser, expressed concern over Meta's claims of unchallengeable tax benefits, while a Meta spokesperson emphasized that the company uses tax incentives to encourage domestic investment.

According to estimates by the Joint Committee on Taxation, the experimental tax credits could cost the U.S. government $32.1 billion in 2025, with Meta's claims accounting for approximately 10% of that amount. Meta is also facing scrutiny from the IRS over $16 billion in taxes and penalties on profits allegedly routed to the Cayman Islands.