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Tax Dodgers Beware: The IRS is Watching You Online

IRS Monitors Facebook, Twitter, MySpace

 

Nobody likes to pay taxes, that’s just a given. Of course, that doesn’t mean you shouldn’t pay your taxes. Why? Well, for one thing, if you’re caught dodging taxes, the penalties can be severe. Besides, even if you think you could get away with it, remember, this is the IRS we’re talking about. They put away Al Capone and he practically ran the city of Chicago in the early 20th century. Plus, the IRS is much smarter now. Don’t believe me? Just check out this article from Laura Saunders at the Wall Street Journal.

Tax deadbeats are finding someone actually reads their MySpace and Facebook postings: the taxman.

State revenue agents have begun nabbing scofflaws by mining information posted on social-networking Web sites, from relocation announcements to professional profiles to financial boasts.

In Minnesota, authorities were able to levy back taxes on the wages of a long-sought tax evader after he announced on MySpace that he would be returning to his home town to work as a real-estate broker and gave his employer’s name. The state collected several thousand dollars, the full amount due.

Meanwhile, agents in Nebraska collected $2,000 from a deejay after he advertised on his MySpace page that he would be working at a big public party.

In California, which has recently been so strapped for revenue it has had to pay some bills with IOUs, agents are also using social Web sites. When one delinquent was identified as a rigger of sails, a curious collection agent searched his name and the term online and found a discussion board used by local riggers. In one thread someone asked where the rigger was because his store had closed, and a reply was posted, “Oh, he moved across the bay.” The agent found the man and collected a four-figure sum.

The article goes on to cite a number of other instances where tax evaders have been wrangled by the IRS through social networking sites, forums, or simple Google searches.

Naturally, there are limitations to IRS data mining. For instance, the IRS can only search information you’ve shared publicly on a social networking site, as well as standard information such as bank records, employment records, motor-vehicle records, and tax returns. In other words, if your Facebook page is set to private, it would be illegal for an IRS agent to connect with you as a friend under a false identity and then use your information.

So far, only a few states use data mining techniques to find delinquent tax payers, however it would be reasonable to expect that number to increase as government agencies become more facile with web technology. The fact that we’re still in a serious recession doesn’t hurt either. With a deficit expected to increase to $1.58 trillion, you can bet that the government will be looking for ways to increase revenues.

 

1 comment so far ↓

#1 Twitted by repdef on 09.01.09 at 5:15 pm

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