Tax Evaders Found Through Social Networking

Social networking can be a great tool for connecting with friends or keeping in touch with family. But many times people forget that when they make something available for anyone it really means anyone, be it the police, burglars and even the taxman. For most people, revealing too much on social networks means maybe an embarrassing photo making rounds amongst their friends, but for some it can mean forking over thousands of dollars in back taxes to the government.

More and more tax authorities in the US are turning to social networks and online tools to track down tax evaders, as the Wall Street Journal reports. In one case in Minnesota, a man sought by the authorities for a long time was tracked down after revealing on MySpace that he got a job in his hometown while also naming his employer. In Nebraska a local DJ announced, also on MySpace, that he would be appearing at a big party in the area leading agents to collect some $2,000 he owed.

While most states don't have a clear strategy for social networking and many don't even allow tax agents to visit these sites at work, in the places that they are used they're becoming more and more effective. Investigations for finding these tax evaders usually involved looking through bank, employee records or other similar means but these are begging to be replaced or at least supplemented by online resources. Sometimes even a simple Google search can be enough to locate tax dodgers.

“These new supplements are often far more efficient than the older ones, such as reading the local newspaper or making inquiries at barbershops and church meetings," Jim Eads, director of the Federation of Tax Administrators, told the WSJ.

However, several rules have been implemented so that agents don't step out of line when searching for the tax evaders. The biggest limitation, but one that has to be enforced, is the fact that agents are only allowed to search through the information that is publicly available and they also aren't allowed to friend someone using false credentials.