The IRS and California gain over $1B from Zuckerberg

Most everyone knows that Mark Zuckerberg is the founder and CEO of the popular social media site Facebook. What may not have been as well known until recently is that Zuckerberg owes more than $1 billion in taxes to the IRS and the state of California. That represents almost half of the social media mogul's income for 2012.

Zuckerberg will be paying his taxes at the top tax rates in the country. For the IRS, that means a rate of 35 percent while it means 13.3 percent in California. That means that Zuckerberg will be giving approximately 48.3 percent of his income to the federal government and the state of California. Many people are wondering why Zuckerberg is will to pay this much in taxes.

Many are saying it has to do with the type of stock that Zuckerberg purchased when his company went public in May 2012. He purchases millions of shares of what are categorized as Class B stock in Facebook. Those that own Class B stock in Facebook have more voting power than those that own Class A stock--a reported 10 times more. Through his purchase, Zuckerberg now controls somewhere in the neighborhood of 58 percent of the company he founded.

It is believed he did this in order to make sure that he retained control of the company. If this is true, then the taxes that he owes to the IRS and California may be worth it to Zuckerberg. Knowing that he will retain control of the company may make this tax bill easier to pay.

Source: abclocal.go.com, "Analyst: Zuckerberg to owe IRS more than $1 billion," March 29, 2013

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