It has been recently reported that Internal Revenue Service agents have, in the past, used free online resources, such as Google Earth, as evidence against taxpayers in investigations. In the particular case cited, Google Street View of taxpayer property was used to determine that a homeowner’s association did not qualify for exemption from tax under 501(c)(4) (social welfare organizations).
The United States tax authority is not alone in engaging in this practice, as Lithuania, Estonia, Greece and the United Kingdom have also used such means as evidence against suspected tax-evaders.
Do not expect this type of investigation to stop. IRS publications indicate that their agents will continue to use such online tools to help determine whether an organization is properly filing. Though there has not been any direct indication that this practice has been used in connection with individual taxpayers, there is no indication to the contrary, either. For example, the IRS might conclude that an investigation into a particular taxpayer is warranted considering recent extravagant additions to property that do not seem to mesh with income reported.
The take-away from this is a rule-of-thumb that, if information is available online it is available to everyone, and that includes governmental agencies. A more obvious take-away is that it is not a good idea to lie to the IRS, because they have many tools at their disposal to uncover the truth. There are plenty of useful and completely legal methods for saving taxes. Prescott Law Group is standing at-the-ready to assist you in such an endeavor at (928) 445-1909.