US State Revenue Agents Like Social Media

The Wall Street Journal had a story today about how state tax/revenue agents are mining social media sites like FaceBook and MySpace looking for tax cheats.

The story says that revenue agents in Minnesota, Nebraska and California have been able to collect thousands of dollars in owed taxes by checking what people post on social media sites and then checking that against what they say on their tax forms. For instance, agents in Nebraska collected unpaid taxes from a deejay when they found out via his MySpace page that he advertised working a big public party but hadn't paid the required taxes on that income as he should have.

I know from personal experience that county tax agents in Virginia regularly review what is posted on company web pages against company tax forms.

Tax agents can only use publicly posted information, and cannot "friend" someone to get information, the WSJ says.

The WSJ story also says that the US Internal Revenue Service declined to comment on whether it used social media to pursue delinquent taxes or to conduct audits.

Given the tough economic times and the US government's voracious need for cash, I'd be highly surprised if they didn't.

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