The IRS is in your internets, watching your financial transactions

Richard Satran at US News has a scary little piece out about how The Internal Revenue Service collects more than your taxes: "It's also acquiring a huge volume of personal information on taxpayers' digital activities, from eBay auctions to Facebook posts and, for the first time ever, credit card and e-payment transaction records, as it expands its search for tax cheats to places it's never gone before."


  1. You know what? If they’re willing to take the time to calculate my California sales tax from out-of-state purchases for me they’re welcome to it, because I refuse to do that squirrely bullshit myself.

  2. I know I’m a broken record on this… but just imagine if a fraction of this effort was directed towards Goldman Sachs, Moody’s, AIG, and J.P. Morgan. The big refrain in 2008 was “oh it was all just too complex!”  Bullshit. Crowbar that fucking data out of their servers before spending resources going after beanie baby collectors.

    1. Why bother with all that? All those jerks are *clearly* guilty of something. We should just lock them all up for a number of years based on their net worth.

    2. Yeah…somehow tracking and holding banking and corporate entities even vaguely responsible for the 2008 circus and regulating their propensity to park squillions of dollars in offshore tax havens is beyond a government’s ability, but tracking hundreds of millions of individual tax payers or consumers to make sure they pay every last dime in taxes is a-o.k.  Frankly, I’m not the least bit surprised.  Saddened…yes.  Surprised?  No.

      1. Think of all the people employed by those entities in hiding those squillions of dollars. Can’t say the same for Joe Public, can you?

  3. Has it occurred to anybody that every businessman in the country is the tax collector for these goons?

  4. mfg it just gets better and better.

    Let alone this is happening in the USA – wait till they start selling the software elsewhere, and watch the news as Kazakhstani minorities disappear off the radar.

  5. Alarmist headline is alarmist. Buried in the article, it says this data is only used for support when an audit has already begun. In other words, no, your Facebook status isn’t going to trigger a raid from the Feds.

    The only other way I can see this being of any value at all is if you reported $10,000 of income, but have a history of purchasing…  I dunno, jet fuel or something. There are very few ways a credit card record could make any difference, because most purchases have no tax consequences.

    Having worked at IRS, I can say with confidence they don’t even have enough personnel to run audits on obvious crooks; they definitely don’t have resources to pay attention to your Facebook.

    1. Always nice to hear a voice of reason, and what you’re saying makes some sense, the fear could be overblown IF the IRS were in come kind of sealed-off silo, but you can be sure other branches of law enforcement, etc…have access to these records and DO have the resources. Law enforcement likes to say the same thing about other kinds of data gathering as your quote about audits: “we just collect it all, we can’t actually USE any of it until we are sure someone’s a criminal” but the temptation to use the data for analysis in the mean time is too great to ignore in many cases. I wish I could absolutely attribute this quote from On The Media a couple Fridays ago, or even get it right, but the gist was:  “The history of governments is riddled with examples of data being used for all kinds of off-the-book personal, and other nefarious business.”

      1.  One other thing:  The IRS generally will die a flaming death before they will share any information they have with other law enforcement agencies.

        I worked in (redacted) intelligence operations for 25 years and we never even got a sniff of anyone’s tax information or financial data via IRS except in the most extraordinary circumstances (stuff done almost at the Cabinet level had to happen along with court involvement.)

        I dislike the IRS and (usually) anyone working for it and it was one of three agencies I routinely turned down job offers from (DEA and ATF were the others if anyone cares to ask) but I always respected this one part of their ethos.

        1.  That’s interesting, I definitely was speaking based on nothing more than assumption. It would be interesting to see a comparative analysis of the levels and character of sharing between agencies. I imagine it would be a bizarre and tangled web, and perhaps a shifting one depending on the crisis of the day, sitting administration, etc…I work in the early childhood field, and even between agencies that manage our data, a clear picture and sharing can be near impossible to orchestrate.

          1. It is indeed both complex and ever-changing and *very* political (big shock).  Much of it is based on either specific legislation or what are called MOU’s (Memorandum of Understanding) signed beteween two agencies regarding details of what and how information can be shared.

            There are various “fusion” Intelligence centers that claim to be info sharing centers but the reality is more like a protracted series of turf battles and empire building. You don’t generally detail your best and brightest to work at one, it’s more of a parking lot for the third string players or agents who want to get off the street for a bit since you rarely get shot at in one..

            It gets further complicated by what is called the “third agency rule” that generally prohibits agency c being given information by agency b that they got from agency a without getting agency a’s specific permission first.

            Generally I consider this rule to be a good thing as it controls how far your private (or company) data might be sent without some sort of oversight from the agency that originated it.

            You can get around it with “parallel construction” if you can come up with the same data from open sources.  (This is especially important when dealing with classified stuff, it makes life lots easier if you can put the same (or very close) thing together from unclassified sources since sharing classified is by definition never easy.

    2. A…it says this data is only used for support when an audit has already begun.

      Thanks, Pollyanna. We all know that nobody ever uses data inappropriately once they’ve collected it.

  6. The IRS was formed the same year as the Federal Reserve.  It’s the enforcement arm for this private institution that has the facade of being a part of the U.S. government.  This system of a private bank backing our US currency is what has put a strangle hold on our economy – and quite obviously is the reason why no investigations or prosecutions will be made against the private banks for 2008 (aside from any whitewashing that may be PR stunts – we should expect a few of those soon to calm the masses).
    The board members of the Federal Reserve represent the very private institutions that have screwed the world economy – and most americans don’t understand this, and what it really means.
    We need to shed some sunshine on the innerworkings the the Fed pronto – that’s the keystone.
    And as anonymous says – end the Fed through global non-compliance – don’t take out massive loans from them, stay out of debt, find a local credit union, support your local economy, and educate yourself!

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