When social media took us by storm in the early 2000's many users thought the latest platform was a great way to stay connected with friends and family, voice their opinions, or promote a brand. As time went on we soon realized personal social media pages were also being used by hiring managers and recruiters to screen job candidates. Then Police Departments began using social media to build community alliances and solve crimes. Now the latest user is Uncle Sam. Only this time its illegal and maybe violating federal laws on government data collection and discrimination as a result of its algorithms.

The below outlines how the IRS is using your social media and your private email as part of its data mining and analytics to glen information that may lead to an audit in and out of tax season.

Private Emails

Private emails are private, right? Well not exactly. Two Washington State University professors in a 2017 report on IRS data mining, The Use of Big Data Analytics by the IRS: Efficient Solutions or the End of Privacy as We Know It? concluded that the IRS was reading private emails without a warrant. Via the Electronic Communications Privacy Act (ECPA), IRS investigators can obtain everything in an email account except for unopened emails or voicemails stored with a provider for 180 days or less. In fact, the 2011 IRS auditor's training manual told investigators exactly how to do it. The IRS has since agreed to stop reading taxpayer's emails without warrant in response to a Senate Finance Committee hearing but to date no ECPA amendments have passed.

Are you discussing possible deductions, perhaps business entertainment expenses or cash transactions, maybe even business losses? These are all common audit triggers for small businesses that you may want to avoid discussing electronically. Think about all the emails you have received from your attorneys, accountants, and bankers that have a confidentiality disclaimers; well that may not mean much these days. As a rule of thumb, you may want to communicate in person or via carriers if you want to avoid an audit trail.

Social Media

Posting pictures of recent, large purchases? Giving status update of your global excursions? Tweeting about things happening in the office? If you answered yes to any of these questions know that the IRS is using all these social media sites to look for suspicious patterns and tax payer information. According to CNET, the IRS uses online activity trackers to look through mass amounts of public internet data for potentially incriminating information.

Think of its this way, if the IRS uses social media tools to share the latest information on tax changes, initiatives, products and services it's not a stretch of the imagination to think they may be using the same tools to investigate you. Be careful and consistent with the information you disseminate via public and private platforms to warn off an audit.

While the IRS has historically used tax returns to audit businesses, they are now becoming sophisticated with its investigative tools. If the IRS decides to audit your business there is little you can do to stop it. You may however avoid being singled out with the tips above based on this new information coming to light as a result of the American Civil Liberties Union filing a Freedom of Information Act.