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IRS getting sneakier in tracking tax cheats

May 12, 2014

Are we just a bit too paranoid in the wake of the Edward Snowden National Security Agency revelations?

Maybe. Maybe not.

Take taxes. (Please! Rimshot.)

Social media tax cheating clues: As almost 132 million of us were sending in our federal tax returns on April 15, reports resurfaced about the Internal Revenue Service using online activity trackers to sift through the mass amounts of data available on the Internet.

This Web-based information, according to Marketplace, supplements what the tax collector already knows about us, including our Social Security numbers, health records, banking statements and property.

"It appears from its public statements and some other reports, that [the IRS is] using data to piece together likely profiles or likely candidates for closer review," Behnam Dayanim, co-chair of the privacy and data practice at Paul Hastings, told the public radio program.

This is not new. Concern about IRS social media snooping first cropped up more than a year ago.

So while the buzz about the IRS being taxpayers' Facebook friend might have died down, the tax agency apparently has quietly been continuing its social media pre-audit investigation process.

IRS Facebook page Click image to visit the IRS' Facebook page.

As I noted back in 2013, here's how it works. If you're bragging on Facebook about buying a Ferrari but reporting only $30,000 in annual income on your Form 1040, your social media comments will probably prompt the IRS to take an interest in you.

Car tax tracking, too: The IRS also was one of several federal agencies that used the services of a vehicle license plate-tracking company.

Vigilant Solutions provided certain of Uncle Sam's offices, including the IRS, access to auto tag databases or tools used to collect plate information, according to government procurement records compiled by Bloomberg.

Federal contracts worth more than $400,000 with the Livermore, California-based company were in place since 2009. They were used primarily for criminal investigations.

Bloomberg reports that online federal procurement records show that the IRS awarded the company a $1,188 contract for "access to nationwide data" in June 2012. The contract ended in May 2013.

"Especially with the IRS, I don't know why these agencies are getting access to this kind of information," Jennifer Lynch, a senior staff attorney with the Electronic Frontier Foundation, a San Francisco-based privacy-rights group, told Bloomberg. "These systems treat every single person in an area as if they’re under investigation for a crime — that is not the way our criminal justice system was set up or the way things work in a democratic society."

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The More Tax Posts tab at the top of this page will take you to, well, more tax posts. You also can search below for a tax topic. 

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TAX-SAVVY WAYS 
TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

Comments
  • I think it would be accurate to say that no one enjoys paying tax. After all, who wants to work hard, then have someone take a chunk of your earnings? So I can understand why people try to avoid paying it, however, these people who report a lower income than they should are making it even more unfair to people who actually do their taxes returns properly. Because there are so many people that attempt to ‘cheat’ the system, I think it is right for the IRS to investigate. And those people who are silly enough to post things on social media about money they spend deserve to be caught in my opinion.

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