Tax Evaders, Beware! Agents Using MySpace, Facebook to Hunt You Down!

If you're a member of an Internet site like MySpace, Facebook, or Twitter, you might want to rethink posting everything and anything about your life. The tax man could soon be knocking at your door.

The Wall Street Journal reports that some state tax agents are scouring social networking sites looking for information on people who owe back taxes. Anything that can be utilized to locate these individuals will be. For instance, one tax evader announced on his MySpace account that he would be moving back to Minnesota to accept a new job and even gave the name of his employer. Tax agents looked up the employer, found the individual, and collected several thousand dollars in back taxes. A deejay in Nebraska forked over $2,000 in taxes due after he informed folks from his MySpace page that he was working at a large public party. And being vague about your personal information may not be enough to protect you. One individual in California identified himself as a rigger of sails. An ingenious tax agent did an on-line search, discovered a discussion board used by local riggers, and learned the individual in question had closed his store and moved across the bay. One face-to-face later, the agent was collecting a check.

Most searches for tax evaders starts with examination of public records, such as motor vehicle, bank, and employment records. When agents run into a dead end, more are turning to the Internet and Googling these individuals. Failing that, they turn to social networking sites, discussion boards, and chat sites as last-ditch efforts to find their quarry.

MySpace is turning out to be a more productive site for locating tax dodgers because of its layout. Adults who use MySpace allow all members to view their profiles by default. Facebook, on the other hand, allows users to keep their profiles private and only display them to friends. Since agents are only allowed to access publicly-available data, MySpace works to their advantage. Agents are not allowed to "friend" people on other social networking sites using false information.

In the workplace, the tendency these days is for employers to block access to Web sites that would detract from employee productivity. That would include social networking sites. However, some state government agencies are reconsidering that policy. Several are looking at the success rates of states like Nebraska, Minnesota, and California that already use these sites, and checking into the possibility of launching similar programs. (For the record, the Wall Street Journal reports that a spokeperson from the IRS declined to comment on whether its agents were using similar methods to locate federal tax evaders.)

Bottom line? You might think you're pulling one over on the tax collector, but be warned: Being open on the Internet could end up making you open your wallet.