The IRS is looking to Use Social Media to Investigate Tax Fraud

IRS & Social Media

The IRS is looking to use information posted to social media in tax fraud cases. However, the IRS does not have a formal tool for combing through multiple social media sites.

You can find out a lot about a person through their social media presence. People post where they live, what cars they drive, where they work, how they spend their free time, and what they’re selling online. This last one is a huge issue; online sellers are notoriously known by the IRS as tax cheats. The IRS estimates that businesses across the United States pay $125 billion less in taxes each year than they actually owe. The IRS is on a mission to reduce that number.

How Will the IRS Use Information from Social Media?

According to a request for information from December 2018, the IRS is searching for a tool to assist in combing through multiple social media feeds for the purpose of acquiring evidence for tax fraud cases. The IRS has said that it does not intend to use such a tool to search for tax fraud, rather to investigate those they are already suspicious of.

Specifically, the agency has said, “the IRS emphasized that this tool, if the agency decides to pursue the use of it, would be done to assist with previously identified tax compliance cases. The IRS respects taxpayer rights, and such a tool would not be used to search the internet or social media sites for purposes of identifying or initiating new tax audits.” The IRS wants the tool to provide real time, customizable reports of publicly available information from social media sites that would be easily explainable in court.

Currently, the IRS is very limited in its ability to use Social Media. The IRS has very prohibitive rules regarding social media. Workers may not use personal accounts for work, including for investigations, and workers may not create fake accounts to investigate. Further, the IRS has cybersecurity which limits employees’ ability to view or access information on social media sites at work.

Do Other Federal Agencies Use Social Media?

Other federal agencies have been using social media to investigate crimes for years. One therapist stole government funds by billing for counseling sessions with disabled children which never happened. How did the agency know? The therapist posted pictures on vacation in the Caribbean at the time she billed for counseling sessions.

EPGD Business Law is located in beautiful Coral Gables, West Palm Beach and historic Washington D.C. Call us at (786) 837-6787, or contact us through the website to schedule a consultation.

*Disclaimer: this blog post is not intended to be legal advice. We highly recommend speaking to an attorney if you have any legal concerns. Contacting us through our website does not establish an attorney-client relationship.*

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Eric Gros-Dubois

Eric P. Gros-Dubois founded EPGD Business Law in 2013 and is the current head of the firm’s corporate, estate planning, and tax practice, and manages the firm’s Washington D.C. office. With a JD and MBA, and a specialization in finance, Eric is able to step back and view the legal world through a commercial lens while also acting as a trusted business advisor for his clients. He does his best to be solutions oriented, and tries to think like a business owner, not just a lawyer.


*The following comments are not intended to be treated as legal advice. The answer to your question is limited to the basic facts presented. Additional details may heavily alter our assessment and change the answer provided. For a more thorough review of your question please contact our office for a consultation.

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