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The Taxman's Web Spider Cometh 178

Posted by kdawson
from the crawling-towards-an-audit dept.
Juha-Matti Laurio writes "A five-nation tax enforcement cartel has been quietly cracking down on suspected Internet tax cheats, using a sophisticated Web-crawling program to monitor transactions on auction sites and to track operators of online shops, poker, and porn sites. Austria, Denmark, Great Britain, and Canada have joined The Netherlands in pursuing the 'Xenon' program with the assistance of an Amsterdam-based data mining company. Wired News reports that the Web crawler uses so-called 'slow search' to avoid creating excessive traffic on a site or drawing attention in the sites' server logs." The article notes that the US IRS will neither confirm nor deny using similar technology.
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The Taxman's Web Spider Cometh

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  • Interesting. (Score:5, Interesting)

    by JKConsult (598845) on Saturday January 27, 2007 @05:43PM (#17785632)
    I'd be curious to see how exactly they propose to spider a gambling site. Unless you've won so much money that your name is posted on the webpage (like the winner of the Sunday Million on PokerStars), I can't really see how this is going to work. And yes, I've RTFA.

    In the abstract, I'm not against it. Tax cheats are tax cheats. Now, I don't claim my online poker winnings, but that's because they amount to such a piddlingly small sum each year that it really isn't worth my time. If I were to get audited, I'm sure I'd get busted, as the winnings deposit into my bank account, and should count as income. How they go about doing it is the key. If they just use publicly available information such as the aforementioned posting on the webpage, then fine. If you're dumb enough to win that kind of money and think you're getting away with not paying taxes, then you deserve what you get.
  • details are sketchy (Score:4, Interesting)

    by PhantomHarlock (189617) on Saturday January 27, 2007 @05:51PM (#17785680)
    After reading the article I'm still not sure exactly how it works. How do they know who is behind the particular auction ID? Do they have access to the auction houses' databases? It appears to only use whatever information is online.

    Does it also use whois information for domains? Not sure what htey are doing to correlate information. Need more details!

    --M
  • Life isn't fair (Score:1, Interesting)

    by Anonymous Coward on Saturday January 27, 2007 @05:53PM (#17785688)
    That is the way the tax code works.
    Legally some people don't pay the taxes others do.
    A man with a family and a mortgage pays less tax than someone without-eeven if he earns much more.
    Two neighbors on either side of State line pay much different taxes because of where they live.

    Extra-legally you don't have to pay taxes on money that doesn't show up on paper/electronic records.
  • by GuyFawkes (729054) on Sunday January 28, 2007 @09:38AM (#17789346) Homepage Journal
    Articles like this are a lot like the television licence (http://www.tvlicensing.co.uk/) or road fund licence (http://www.dvla.gov.uk/) FUD, (incidentally if you google "road fund licence" the increasingly irrelevant google search will give ebay as an option...) which goes along the lines of local ad campaigns saying "we know there are 14 houses in Letsby Avenue with no TV licence" cos their database says so, I don't have a TV, but the presumption is that everyone does have a TV, and anyone who doesn't is a liar and a licence fee dodger.

    In the Uk as far back as 1980, so before everything except mainframes in any meaningful sense, Banks were obliged to notify the tax man of any ammounts you had if balances or individual transfers were over 300 pounds.

    While these articles are FUD "we know what you are doing on e-bay, so pay up before we nail you", which will collect some people along the way, the reality is the system as advertised cannot work, my ebay handle is not my name, my ebay address is my mothers house (when I signed up for ebay I was moving, just not sure where, and have never bothered updating) and most of my transactions have been in cash, and I have bought and sold expensive capital items like vehicles on ebay.

    Far Far Far easier to simply crawl ebay for completed sales, total amounts, large capital items, and then match these amounts and dates to bank accounts, aha, ebay user "taxfreetrader" is Joe Bloggs.

    Of course a huge number of transactions are paid via paypal, so there is an electronic record with an even better method of searching and matching.

    People who regularly deposit 1000 bucks and over for single items may get busted, people who regularly transfer 1000 bucks and over from paypal may get busted, people who believe this crap will turn themselves in, everyone else who is smart and deals in cash or equivalents such as Postal Orders will not get busted, except perhaps second hand from the person you sold to or bought from getting busted, and them grassing you up.

    The other things they are looking for that this can help to detect is VAT (http://www.direct.gov.uk/en/MoneyTaxAndBenefits/T axes/BeginnersGuideToTax/) carousel fraud (http://www.statistics.gov.uk/articles/economic_tr ends/ETAug03Ruffles.pdf)

    The average guy on the street like me with 150 feedback spread over 3 years has fuck all to worry about.

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