Tax Lawyer's Blog

Back in 2008 I wrote about a group of Oklahoma college students who had bragged on MySpace about how much money they were making in their party business. Unfortunately for them, a state tax investigator was one of their “friends”:

Five current and former University of Central Oklahoma students bragged on MySpace that their party business had served thousands. Actually, a lot more than thousands. And that boast was enough for the Oklahoma Tax Commission to issue the erstwhile businessmen a six-figure state tax bill.

Now, it seems the IRS has followed Oklahoma’s lead. WebCPA reports that the IRS is increasingly using social networking tools like Facebook to help catch tax cheats:

What kinds of tools is the IRS using to uncover tax evasion? One of them is social networks. The Electronic Frontier Foundation has released documents uncovered from Freedom of Information Act requests, showing that the IRS as well as the FBI and other government agencies have been using social media sites like Twitter and Facebook to collect information for investigations.

The EFF posted a 2009 training course that describes how IRS employees could use various Internet tools — including social networking sites, search engines and Google Street View — to investigate taxpayers.

However, the EFF commended the IRS for prohibiting employees from using deception or fake social networking accounts to obtain information. IRS policies generally limit employees to using publicly available information. The EFF also found that the IRS does not allow employees to use government computers to access social networking sites like Facebook or MySpace for personal communication, and cautions them to be careful to avoid any appearance that they’re speaking on behalf of the IRS when making personal use of social media.

That’s good advice in general. Be careful what you say on Facebook or Twitter, particularly when it comes to your personal finances.

Related Posts:

• Tax Agents Spying on Twitterers, Facebookers and MySpacers?

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