BTerrell Group Blog

Social Media and Taxes

Posted by Meredith Gooch on Thu, Sep 03, 2009

We all know that social media is now being used more often by employers to help in "researching" prospective employees. But did you know that government agencies like the Internal Revenue Service are now using social media to track down tax evaders and perform audits?

According to a recent Wall Street Journal article, revenue agents are only allowed to use publicly available information which means use of the more public MySpace and Twitter sites rather than Facebook. Agents are also not allowed to use false information when "friending" someone - so if you see that someone named "TaxMan11946" is "following" you on Twitter, you may be under the watchful eye of your local tax agency.

Some tax agencies have blocked these social media sites in the past but are now beginning to realize the cost and time-saving advantages of using them. Even performing a simple Google search may pull up results about recent business ventures and relocations of suspected tax dodgers that help state revenue agents track down these tax evaders.

One example is given by The Wall Street Journal, "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 hometown to work as a real-estate broker and gave his employer's name. The state collected several thousand dollars, the full amount due."

Use social media wisely, both as an end-user and as an employer. You never know who might be "following" you.

- Ruba Ayyat, Marketing

Source: Saunders, Laura. "Is 'Friending' in Your Future? Better Pay Your Taxes First." The Wall Street Journal. August 27, 2009. <http://online.wsj.com/article/SB125132627009861985.html>


Tags: Facebook, LinkedIn, Twitter, MySpace, social media, taxes, IRS, tax evasion