The IRS, following years of budget cuts that have eroded its ability to police wealthy tax cheats, is turning to the Internet for help
The agency recently acknowledged it will monitor social media to go after tax dodgers. According to Quartz:
“Businesses and individuals increasingly use social media to advertise, promote, and sell products and services,” the IRS solicitation reads. “For example, taxpayers can create ‘online stores’ on social networking sites free of cost. Much of this information is unrestricted, allowing the public, businesses and various governmental agencies to discover taxpayers’ locations and income sources. But the IRS currently has no formal tool to access this public information, compile social media feeds, or search multiple social media sites.”
Current IRS policy regarding its employees’ use of internet-based social media research is “largely prohibitive,” it continues. Workers are barred from using their personal social media accounts for work, nor are they allowed to create fake accounts to perform compliance-related tasks. The IRS also “prohibits fictitious ‘friending,’ ‘liking,’ and ‘following’ a person or business.”
The IRS is pursuing potential tax cheats online as it loses resources for more traditional enforcement.
According to an investigation by ProPublica published in The Atlantic, the IRS has been gutted by years of underfunding. According to the report:
Had the billions in budget reductions occurred all at once, with tens of thousands of auditors, collectors and customer service representatives streaming out of government buildings in a single day, the collapse of the IRS might have gotten more attention. But there have been no mass layoffs or dramatic announcements. Instead, it’s taken eight years to bring the agency that funds the government this low. Over time, the IRS has slowly transformed, one employee departure at a time.
The result is a bureaucracy on life support and tens of billions in lost government revenue. ProPublica estimates a toll of at least $18 billion every year, but the true cost could easily run tens of billions of dollars higher.
The cuts are depleting the staff members who help ensure that taxpayers pay what they owe. As of last year, the IRS had 9,510 auditors. That’s down a third from 2010. The last time the IRS had fewer than 10,000 revenue agents was 1953, when the economy was a seventh of its current size. And the IRS is still shrinking. Almost a third of its remaining employees will be eligible to retire in the next year, and with morale plummeting, many of them will.