The ‘Piggy’ Isn’t Playing Around – IRS Finding Tax Dodgers via Facebook, MySpace

By Social Editors • on August 29, 2009

The Wall Street Journal, By Laura Saunders

Tax evaders looking to dodge hefty bills from Uncle Sam may want to think twice about posting personal information on the Internet, especially social websites where some of the information is out in the open. According to the Wall Street Journal, state revenue agents are mining websites such as Facebook and MySpace for information leading to tax evaders.

The WSJ describes several scenarios used by the government: one deejay in Nebraska said on his MySpace page that he was working at a big public party, and now must shell out $2,000. A tax evader from Minnesota announced on his MySpace page that he would be returning to the state as a real-estate broker– even provided the employer’s name–and was caught by authorities and forced to pay thousands.

Typically searches for tax evaders begin with examinations of bank, employment, tax, and motor-vehicle records, the WSJ reports. When the evader isn’t found using that method, tax collectors head online and search for the culprits on Google. If the search isn’t productive, they head to Facebook, MySpace and other social networks and chat rooms.

Not to worry: not all state tax departments are trolling social websites… at least, not yet. Many state tax authorities actually block social sites on workplace computers to keep employees off Facebook and MySpace during working hours. Jim Eads, director of the Federation of Tax Administrators, said that may eventually change.

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