By Jay R. Nanavati
Bloomberg BNA Daily Tax Report
November 12, 2012
Have you ever been surprised by Facebook or Linkedln’s ability to suggest people to whom you
may be connected, when even you had forgotten how you were connected to those people?
Perhaps the social networks’ technology crunched data that you provided on your home town, Boy Scout troop, high school, first job at McDonald’s, or flyfishing hobby, to find latent connections between you and a long-lost acquaintance.
Use of such data-mining technology is widespread, and the Internal Revenue Service has adopted it to find taxpayers with undisclosed offshore bank accounts.
U.S. taxpayers who are still considering whether to disclose their accounts need to understand that IRS’s data-mining software increases their risk of being detected. They should act accordingly and seek legal advice immediately.
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