Newsmax.com
http://www.newsmax.com/Newsfront/irs-expanded-powers-facebook/2013/05/13/id/504195
The Internal Revenue Service is tapping into Facebook and eBay, and
monitoring credit card and web-transaction payments in a new bid to
catch tax cheats.
The Internal Revenue Service is tapping into Facebook and eBay, and
monitoring credit card and web-transaction payments in a new bid to
catch tax cheats.U.S. News & World Reports reveals the new strategy
is being used as the agency attempts to recoup on an estimated $300
billion it loses per year due to tax evasion and errors.
Financial experts say the expanded push to get information could push the boundaries of privacy.
“I am sure people will be concerned about the use of personal
information on databases in government, and those concerns are
well-taken,” Edward Zelinsky, a tax law expert and professor at Yale
Law and the Cardozo School of Law, told the publication.
Congressional staff sources told U.S. News’ Richard Satran the expansion
will be a “key issue” when the next IRS chief is up for approval in
front of the Senate.
As part of its modernization, the IRS has hired private industry experts
to help them digitally track financial transactions. The experts are
also given access to Social Security numbers, health records, and credit
transactions.
Other methods of keeping tabs on taxpayers, U.S. News says, include
analyzing Facebook, targeting audits by matching filings to social media
or electronic payments, and tracking Internet addresses and emailing
patterns.
The publication reports that U.S. Tax Court records show information
gathered from Facebook and eBay postings have been used by the IRS in
defending tax challenges.
It may not be as bad as it sounds so far.
U.S. News says that “in practice, the third-party data has been used only if the irregular returns merit more attention.”
One example of that is zeroing in on prisoners who were filing false claims for energy tax credits for window replacements.
Congressional staffers on the House Ways and Means Committee and the
Joint Committee on Taxation told the publication they will study the
possibility of errors in the so-called “robo-audit” monitoring and
storage of data on millions of taxpayers.
Paul Schwartz, University of California law professor and co-director of
the Berkeley Center for Law & Technology, said social media can
“make people testify against themselves. They provide a
counternarrative.”
He told U.S. News that one example might be a businessperson going to
Florida for five meetings over a week who also visits family. A casual
posting to friends about “visiting my mother in Florida” would raise a
red flag as to the true nature of the deduction.