French Tax Officials To Start Digging Through Social Media Posts For Expensive Cars It Thinks You Can't Afford

(Mis)Uses of Technology

from the faking-it-til-you-make-it-possibly-a-tax-code-violation dept

In a weird announcement threatening the commencement of pointless government monitoring, a French official says tax cheats will now be outed by their own selfies. (via Reason)

France’s tax administrators will start searching through social media accounts in early 2019, a pilot project in the fight against tax avoidance, Budget Minister Gerald Darmanin told weekly business TV show Capital.

[…]

“(The fiscal administration) will be able to see that if you have numerous pictures of yourself with a luxury car while you don’t have the means to own one, then maybe your cousin or your girlfriend has lent it to you… or maybe not,” Darmanin said.

I guess French tax collectors will be scrolling through social media profiles with lists of tax dodgers and a keen appraiser’s eye. There may be several reasons people have expensive items showcased on social media, and not all of them will have anything to do with ill-gotten net gains. A very common internet pastime is presenting your life as more exciting, dynamic, and filled with material goods than it actually is. Photoshop may be involved. Some of what tax officials come across will be evidence of nothing more than self-esteem issues.

However, this statement may not actually reflect what French tax officials have in mind. This may just be an inelegant (and partially inaccurate) depiction of the program being put in place. It appears this social media monitoring will follow the UK’s lead, which doesn’t have much to do with scanning social media posts for inexplicable luxury cars. If the French are on the UK Plan, as this article suggests, auditors will bury themselves in mountains of data and hope the algorithm sorts the cheats from the dreamers.

Here’s what Her Majesty’s Revenue and Customs [HMRC] is doing to track down tax fraudsters:

Tax authorities plan to increase the amount of data Her Majesty Revenue and Customs (HMRC) hold and can analyze. They’ve done this by extending their legal right to gather data from merchant service providers and data aggregators, including those that are based outside of the UK. This is a crucial step, as many Tax Avoidance schemes use businesses and trusts based overseas. They also now have the power to hold an online market place liable if a trader sells goods in the UK without paying tax on it.

Secondly, there will be data gathering and monitoring of certain high-risk groups. These include previous tax evasion and avoidance offenders, who will have data gathered on them for several years after they are convicted. Certain affluent individuals will also be monitored as they have been identified as a high-risk group because those with overseas business assets or connections are at a greater risk of offending.

The monitoring includes social media, but it’s only a small part of the data haul.

The UK’s HM Revenue & Customs (HMRC) will “observe, monitor, record and retain internet data” which is available to everyone, including blogs and social networking sites where no privacy settings have been applied, it has specifically confirmed in an update to its guidance on criminal investigations for tax offences.

Having a public account means the public — and the government — can see everything you post. That includes stuff it may try to use against you — in this case, expensive items the government feels you can’t afford.

And, lest we think we’re any better than our European counterparts, the IRS has been doing the same thing in the States for years. And it’s possibly been breaking the law the whole time.

The Internal Revenue Service is breaking several laws by mining large data sets and combing through social media posts in its search for people to audit, a Washington State University professor says.

Kimberly Houser, a clinical assistant professor of business law, in WSU’s Carson College of Business, said the IRS is breaking federal privacy law that says citizens should be:

– Informed when the government is collecting data on them.

– Given the chance to review and correct the information.

Such policies are required by the fair information practices incorporated into the Privacy Act of 1974.

The ACLU also argues the IRS’s collection of communications violates the Electronic Communications Privacy Act and skirts warrant requirements. The IRS has agreed to stop gathering emails but made no promises about text messages and social media posts.

Of course, the IRS doesn’t need a warrant to collect publicly-viewable posts. Text messages, however, definitely aren’t public. But it isn’t really clear the IRS is collecting these without a warrant. The IRS does have Stingray devices capable of intercepting text messages, but if it has done so, nothing about this use of cell tower spoofers has made it into the public domain. More likely, the IRS has interpreted the ECPA “abandonment” rule — which allows the government to collect email older than 180 days without a warrant (treating it as abandoned physical mail) — to cover text messages and social media posts.

Basically, what the French government is threatening to do is something several other governments already do. It’s just that none have announced it quite this badly. Trawling social media posts for inexplicable wealth may trap a few tax cheats, but it’s far more likely to produce false positives and piles of mostly-useless data for investigators to dig through.

Filed Under: france, social media, taxes, uk