kcjenkins Posted December 9, 2013 Report Share Posted December 9, 2013 Interesting Agents from the Internal Revenue Service (IRS) are using as part of their tool kit to audit taxpayers and organizations, The Daily Caller has learned. A redacted IRS letter dated Sept. 8, 2011 reveals that at least in one case the IRS’s examiners used photos of a property, obtained through Maps, as evidence to revoke the 501©(4) status of a homeowner’s association. “The road consists of a two-mile loop around the inside of the property. It goes not have any sidewalks or bicycle lanes. The examining agent printed and copied a map from Google Maps (www.google.com) into this report,” states the letter. 501©4 is a tax-exempt status that includes certain “social welfare organizations,” “local associations of ,” “homeowners associations,” “volunteer fire companies,” and certain lobbying organizations. The IRS became mired in scandal in May 2013 after a report by the Treasury Inspector General for Tax Administration found that IRS staffers had singled out tea party groups seeking 501©(4) tax-exempt status for extra scrutiny. The agency did not return The Daily Caller’s request for comment for this report. In formal guidance issued to IRS agents inspecting historical conservation sites, however, Google Maps and the online real estate Zillow are mentioned as tools to help determine whether a property meets the regulatory requirements necessary to receive charitable contributions. In addition to using freely available aerial and street photographs to survey property, agents are also encouraged to use search engines to research background information on suspected tax cheats. “The Internet ( or other similar search engine) can be an excellent source of background information relevant to the taxpayer, done organization and appraiser,” states the agency’s manual. The guidance, which is posted publicly online at the IRS’s website, was last revised on Jan. 3, 2012. An agency manual, effective Oct. 1, 2013, also lists Google, Google Maps, and a number of other Internet search tools to help agents spy on taxpayers. In July 2012, according to USASpending.gov, the Treasury Department and the IRS awarded a $9,585 contract to Virginia-based vendor ICS Nett, Inc. to pay for “Google Maps License and Maintenance.” While Google Maps is a free service, users of the licensed “business ” version are able to layer proprietary on top of Google Maps. Google’s sale of licenses to an IRS contractor is curious, however, given the company’s professed outrage over government surveillance. Nor is the use of Google Maps by government tax collectors restricted to IRS agents in the U.S. Government tax collectors in Lithuania , Estonia , Greece , and the U.K. have also used Google Maps and Google Street View against suspected tax dodgers. The TaxProf Blog warned in 2010 that the practice was coming to the U.S. after witnessing it transpire in Greece. Seeing the warning signs in Lithuania in early 2013, firm Group 11 Advisors noted in a company blog post that while it was unclear as of then whether the IRS was using Google Maps and Google Street View to monitor people, it was engaging in electronic surveillance of “high-net-worth individuals[.]” Such surveillance methods include the monitoring of Facebook posts, eBay listings and electronic credit card records. “The added investigative capabilities made possible by technology makes it that much more important to ensure all necessary documents regarding assets are completed and filed according to IRS rules,” wrote Group 11 advisors. The IRS and the Securities and Exchange Commission also came under fire earlier this year for exploiting a 1980s-era law, the Electronic Communications Privacy Act of 1986 (ECPA), to monitor without a warrant the emails of individuals and organizations the agencies placed under investigation. Privacy advocates at the Digital 4th coalition have been fighting to rein in the spying activities of both agencies by petitioning legislators and the White House to change the law so that government investigators will be required obtain a warrant for electronic communications. As of 7:15pm ET on Friday, a petition on the White House website asking the Obama administration to weigh in on reforming ECPA had reached 60,362 signatures. The petition has until Dec. 12 to reach the 100,000 signature threshold required for a response from the White House. http://dailycaller.com/2013/12/07/irs-using-google-maps-to-spy-on-taxpayers/#! Quote Link to comment Share on other sites More sharing options...
Lee B Posted December 9, 2013 Report Share Posted December 9, 2013 Is the use of available public information "spying ?" 1 Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted December 9, 2013 Author Report Share Posted December 9, 2013 Such surveillance methods as the monitoring of electronic credit card records, seems to go past " public information" to me. Mostly, though, what interested me was the whole idea that WE probably need to do some similar things, if preparing for any audit. Just to give us a chance to not be 'surprised', and have answers ready for any obvious issues. Maybe also when considering taking on a new client that raises some doubts in your mind? I'd never even thought of that before. Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted December 10, 2013 Report Share Posted December 10, 2013 How often are the images on Google Earth refreshed? The on-ground picture of my house is 4 years old. 1 Quote Link to comment Share on other sites More sharing options...
Guest Taxed Posted December 10, 2013 Report Share Posted December 10, 2013 IRS may borrow one of those Amazon drones and fit it with a camera for live shots? Quote Link to comment Share on other sites More sharing options...
SaraEA Posted December 10, 2013 Report Share Posted December 10, 2013 I agree with cbslee that use of readily available public information is not spying. How often do local police nab someone for vandalism or mugging because the hoodlum was stupid enough to post and boast on Facebook? Government doesn't need a search warrant to browse social networks like they do to enter your home or business. Remember when the IRS used to have "lifestyle" audits? They'd see what kind of house you lived in, what car your drove, whether your kids went to private school, and then question how you did it all on your reported $20k income. Now they reconstruct your income through subpoenas of bank and credit card records etc., which is much tougher than the audits they replaced. They can still do lifestyle audits if they suspect unreported income, but they have to suspect someone first. People who want to cheat or break the law better learn to be more surreptitious about it. I don't understand why people bother to rob banks or convenience stores anymore because the next day their mug is posted everywhere. So if you want to claim $10k income from your grinder shop, don't drive around in a new BWM and live in a $600k McMansion. Don't start a "church" with an address in the middle of 12 miles of cornfield you don't own. The IRS used to find out the truth about such things before, but it took them a while. Now they can use the internet, just like anyone else in the world. kcjenkins is right on that we as preparers should be using these tools too. I had a "new" business that only sold one product a month. Invoices for raw materials were for huge amounts, but there was no inventory. The company had moved during its first year and I looked it up on the internet just so I could find the date of the move so I would know which town to file the assessor's report. Lo and behold, this "new" company had had a Facebook account for three years and customer review sites had reviews going back at least that long. I can only conclude that the gal had been doing this from home for some time and only decided to make it legal when she moved into a storefront. I didn't break any laws by googling the company, did I? Not anymore than a potential customer would by using the same tools. The IRS has the same right to access that public information as the potential customer and I did. If the owner didn't want the IRS to know, she shouldn't have advertised her wares on the internet. 2 Quote Link to comment Share on other sites More sharing options...
Guest Taxed Posted December 10, 2013 Report Share Posted December 10, 2013 >>> So if you want to claim $10k income from your grinder shop, don't drive around in a new BWM and live in a $600k McMansion. Thank God for the stupidity of the crooks because that gives them away! Remember mobster John Gotti used to say that he is only a plumber! Yet he wore a $2000 suit every day. Last time I saw my plumber of 20 years he was still wearing dirty jeans and his t shirt was still too short in the back. 1 Quote Link to comment Share on other sites More sharing options...
GeneInAlabama Posted December 10, 2013 Report Share Posted December 10, 2013 >> I had a "new" business that only sold one product a month<< If that product is battleships, I'd say that was a pretty good business. I knew a man that went out of business because he lost one client, his only client, Goodyear Tire and Rubber Company. He made cardboard pallets for them. EDIT: I should have said customer - not client. Quote Link to comment Share on other sites More sharing options...
Guest Taxed Posted December 10, 2013 Report Share Posted December 10, 2013 >> I had a "new" business that only sold one product a month<< If that product is battleships, I'd say that was a pretty good business. I knew a man that went out of business because he lost one client, his only client, Goodyear Tire and Rubber Company. He made cardboard pallets for them. One more reason why I would have a bunch of small companies as clients rather than a few medium sized or large ones. I knew a CPA in town that just did 5 or 6 medium sized companies and would not take any 1040 clients unless they were somehow connected to his business clients. He used to refer me 1040 clients all the time. Now he is enjoying sunny Ft. Meyers FL. Quote Link to comment Share on other sites More sharing options...
bertrans Posted December 10, 2013 Report Share Posted December 10, 2013 I agree with cbslee that use of readily available public information is not spying. How often do local police nab someone for vandalism or mugging because the hoodlum was stupid enough to post and boast on Facebook? Government doesn't need a search warrant to browse social networks like they do to enter your home or business. Remember when the IRS used to have "lifestyle" audits? They'd see what kind of house you lived in, what car your drove, whether your kids went to private school, and then question how you did it all on your reported $20k income. Now they reconstruct your income through subpoenas of bank and credit card records etc., which is much tougher than the audits they replaced. They can still do lifestyle audits if they suspect unreported income, but they have to suspect someone first. People who want to cheat or break the law better learn to be more surreptitious about it. I don't understand why people bother to rob banks or convenience stores anymore because the next day their mug is posted everywhere. So if you want to claim $10k income from your grinder shop, don't drive around in a new BWM and live in a $600k McMansion. Don't start a "church" with an address in the middle of 12 miles of cornfield you don't own. The IRS used to find out the truth about such things before, but it took them a while. Now they can use the internet, just like anyone else in the world. kcjenkins is right on that we as preparers should be using these tools too. I had a "new" business that only sold one product a month. Invoices for raw materials were for huge amounts, but there was no inventory. The company had moved during its first year and I looked it up on the internet just so I could find the date of the move so I would know which town to file the assessor's report. Lo and behold, this "new" company had had a Facebook account for three years and customer review sites had reviews going back at least that long. I can only conclude that the gal had been doing this from home for some time and only decided to make it legal when she moved into a storefront. I didn't break any laws by googling the company, did I? Not anymore than a potential customer would by using the same tools. The IRS has the same right to access that public information as the potential customer and I did. If the owner didn't want the IRS to know, she shouldn't have advertised her wares on the internet. There are two aspects of the Internet which are simultaneously simple and diabololical: #1 the Internet is forever; and #2 therre is no reasonable expectation of privacy on the Internet. Sic transit scutum. 1 Quote Link to comment Share on other sites More sharing options...
easytax Posted December 10, 2013 Report Share Posted December 10, 2013 There are two aspects of the Internet which are simultaneously simple and diabololical: #1 the Internet is forever; and #2 therre is no reasonable expectation of privacy on the Internet. Sic transit scutum.All right --- Thus passes the glory of the "big shield" ???? I freely admit I can be dense -- help me out.I'm missing something here as my search only gives - Sic transit gloria mundi is a Latin phrase that means "Thus passes the glory of the world." It has been interpreted as "Worldly things are fleeting." AND Scutum (plural scuta) is the Latin word for "shield", although it has in modern times come to be specifically associated with the rectangular, semi- cylindrical body ... Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted December 11, 2013 Author Report Share Posted December 11, 2013 THUS PASSES THE SHIELD. In other words, no privacy [shield] on the internet. 3 Quote Link to comment Share on other sites More sharing options...
SaraEA Posted December 12, 2013 Report Share Posted December 12, 2013 My client sold baked goods. Bought about 1000 pounds of sugar and a million pounds of flour and $25k in baking equipment to sell one cake or cookie platter or box of cupcakes per month. I'd love the challenge of a client who built battleships, My hunch, though, is that the naval shipyards are HUGE corporations whose coffee machine or postage expenditures alone contain more digits than will fit into my software. Quote Link to comment Share on other sites More sharing options...
bertrans Posted December 12, 2013 Report Share Posted December 12, 2013 All right --- Thus passes the glory of the "big shield" ???? I freely admit I can be dense -- help me out. I'm missing something here as my search only gives - Sic transit gloria mundi is a Latin phrase that means "Thus passes the glory of the world." It has been interpreted as "Worldly things are fleeting." AND Scutum (plural scuta) is the Latin word for "shield", although it has in modern times come to be specifically associated with the rectangular, semi- cylindrical body ... KC got it perfectly: no more privacy. PS: I just liked the sound of the phrase and, incidentally, I'm happy that it brought out the Latin lovers!! Quote Link to comment Share on other sites More sharing options...
ILLMAS Posted December 12, 2013 Report Share Posted December 12, 2013 IRS employees have internet access? Since when, they barely have email communication. Quote Link to comment Share on other sites More sharing options...
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