We’re in Yur Internets, Lookin 4 Yur Tax Fraud
Yet another reason to be careful what you say online: the tax man cometh, and he’s totally reading your MySpace. According to the Wall Street Journal, state tax revenue agents have begun checking social media profiles and announcements to make sure their citizens are staying honest.
The WSJ gives multiple examples from around the country:
- 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 . . .
- . . . 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 . . . 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 IRS declined to comment on the story, but do you think they’re going to be outdone by state tax commissions?
However, before we get into a privacy uproar, let’s look at the guidelines these revenue agents are using. In Nebraska, for example, agents must only use information that is public—which means Facebook is most likely off-limits, but MySpace is usually fair game, since its profiles are available to the public by default.
Despite the WSJ’s headline (“Is ‘Friending’ in Your Future? Better Pay Your Taxes First”), agents are not supposed to falsely add people as friends to access their information. Says Nebraska tax official Steven Schroeder, “Agents are not allowed to ‘friend’ someone using false information.” California uses the same standard.
Obviously, not all states have resorted to this level of investigation yet—but many are thinking of it. The WSJ talked to Wisconsin and Oregon tax departments, which were both considering it. Massachusetts, on the other hand, noted that they don’t have a “systematic program” for monitoring social media.
What do you think? Will you be more cautious about posting about your next big deal (or will you just pay your taxes?)?