Big Brother is watching you on Facebook & MySpace

Are you bragging to your MySpace friends about that big job promotion while evading taxes for the past few years? Maybe you are delaying tax payments to the state but boasting on Facebook that business is better than ever? If you are active in social media then it might be a good idea for you to pay your taxes. State revenue agents could be reading your updates.

Tax deadbeats are finding out that the tax man reads their MySpace and Facebook profile and updates.

According to an article in the Wall Street Journal:

State revenue agents have begun nabbing scofflaws by mining information posted on social-networking Web sites, from relocation announcements to professional profiles to financial boasts.

There are limits to what state agents can do on the Web. In Nebraska, agents are only allowed to use information that is publicly available online. So, MySpace — owned by News Corp., publisher of The Wall Street Journal — tends to work best because its users often post more public information than do those of sites like Facebook, Mr. Schroeder said. The default settings for adults on MySpace create a public profile, while the default settings on Facebook create a profile only viewable by an approved list of friends.

“Agents are not allowed to ‘friend’ someone using false information,” Mr. Schroeder said. The same ethics rules hold in California, according to a spokesman for the state’s Franchise Tax Board.

An Internal Revenue Service spokesman declined to say whether its agents use social-networking sites to pursue delinquent taxes or assist audits.

If you set yourself to “private” on the popular social networking sites, there’s always Google. There are many ways for tax agents to find out information using Google. It truly is like Big Brother is watching. The Wall Street Journal reported that one agent collected $30,000 of unpaid tax from a resident after a Google search found him listed as a high-ranking local marketing rep for a national firm.

Not all states are using these methods to track down tax evaders, but it won’t be long before it becomes commonplace for this to be the easiest way to find those who don’t pay their taxes.