A few years ago, the Internal Revenue Service (IRS) caused a significant stir by claiming IRS: CI had the right to read your email. Those assertions have largely gone quiet, but the question remains—is the IRS looking at your social media?
In 2013, the American Civil Liberties Union (ACLU) filed a Freedom of Information Act request (FOIA) with the IRS to better understand whether the IRS was reviewing private emails without a warrant in the interests of criminal tax investigations. The information received by the ACLU was not dispositive but appears to indicate that prior to a Sixth Circuit Court of Appeals decision in 2010, the IRS considered itself entitled to review private email without a warrant.
Since that time, social media, and the volume of information placed online has grown exponentially. In addition, the amount of private taxpayer information digitally stored and transmitted by the IRS has continued to expand. In September 2022, as reported by the Wall Street Journal, the IRS informed Congress that private taxpayer information collected by non-profit organizations on approximately 120,000 taxpayers had been inadvertently made accessible online by the IRS.
In 2018, the media outlet Quartz reported that the IRS Office of Procurement filed a Request for Information (RFI) for an IRS Social Media Vendor Supplied Research platform (registration wall). According to Quartz, the IRS notes “the IRS currently has no formal tool to access this public information, compile social media feeds, or search multiple social media sites.” Features sought by the IRS for its searchable social media tool include:
- Real-time reporting on available social media information offered or advertised by companies and businesses.
- Platform accommodation of a minimum of 25,000 users.
- Reporting on individual taxpayer presence in chat rooms, forums, and blog threads. Reporting capabilities from public-facing sites containing personal information on bankruptcies, employment, and liens were also sought.
- Provision of and reporting on biometric and personal information including taxpayer marital status, current contact information, photographs, and other information.
Bids for the RFI were due in January 2018 after which the trail goes cold. In addition to this and potentially other silent data collection systems, the IRS already has a prodigious information resource in its Automated Underreporter tool. At present, the tool is partially automated and matches your tax return with information resources used by the tool. Those data sources are significant and not to be underestimated in their reach. It is only a matter of time before the IRS uses AI in this context, if they are not doing so already.
Since then, the IRS has enjoyed a budget boost aimed at updating the chronically cash-strapped agency. Provided over a ten-year period by the Inflation Reduction Act, the funds are intended to improve customer service, retire legacy systems, and address other priorities—which may include harvesting public-facing social media and other taxpayer information.
Is the IRS interested in your social media? Between data breaches, deep data document sourcing, and potential development of platforms designed to take the work out of perusing public sites for private information, it is a good guess that the IRS would not willingly leave a stone unturned.
Questions about compliance or a potential IRS audit? We can help
The tax group at Robert J. Fedor, Esq., LLC delivers experienced representation to individual and corporate clients in matters including offshore tax investigations, foreign bank accounts, and compliance issues. When strategic tax advice is needed, call 800-579-0997 or contact us for a free consultation. We have offices in Chicago and Cleveland.