The Australian Taxation Office has warned that its agents are scouring social media to catch tax cheats.
The ATO revealed to News Corp on Monday that it is using Facebook and other platforms to close an estimated $187.1 billion shortfall in tax collections.
Assistant Commissioner Graham Whyte clarified to The New Daily that the ATO is “not out there trawling social media”, snooping on a mass scale. Agents only look for the accounts of taxpayers who have been ‘red flagged’.
The agency uses complex computer algorithms to identify suspicious tax returns that, at first glance, do not seem to match other information the ATO has already obtained.
“We collect over 650 million pieces of data. With that data, we use sophisticated risk models and risk engines and various models we’ve developed which identify outliers – people that might potentially be non-compliant,” Mr Whyte said.
Once ‘flagged’, investigators may search for public social media accounts using the taxpayer’s name, address and other personal information, the assistant commissioner said.
Mr Whyte said he was unaware of any examples of the ATO asking Facebook and other companies to provide access to social media accounts set to ‘private’.
“More likely than not, what we’re doing is using the public information, so we have the same access as anyone.”
Mr Whyte was careful to point out that the official ATO Facebook and Twitter accounts are not used for investigations.
“We’re not friending people to try and look in their accounts, or those sort of things. It’s just information that’s out there.”
To illustrate how it uses social media, the ATO briefed The New Daily on the recent case of an Australian photography business that reported no income.
After the business was ‘red flagged’, agents discovered that the owner was actively promoting its services on a Facebook page. The business was caught.
Another example, reported in The Australian, was of a couple who reported combined taxable income of $140,000, despite social media posts showing the family had recently flown business class five times with their three children. They were also caught.
Tax cheats face hefty penalties, Mr Whyte warned.
And he cautioned that simply setting social media profiles to ‘private’ would not be enough to protect tax cheats, as the ATO also pulls information from eBay, the stock market, financial institutions, employers, other government departments, and more.