The Taxman's Web Spider Cometh

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.

Comments

How's this work then?

[grassy_knoll]

From TFA:

The spider can also be configured and trained to look at particular economic niches -- a useful feature for compiling lists of business in industries that traditionally have high rates of non-filing. "For instance, weight control (yields) 85,000 hits, some for products ... also services," says Sweden's Hardyson.

Once the web pages are screen-scraped, Xenon's Identity Information Extraction Module interfaces with national databases containing information like street and city names. It uses that data to automatically identify mailing addresses and other identity information present on the websites it has crawled, which it puts into a database that can be matched in bulk with national tax records.

So the spider scrapes a publically available site for the business or shipping address, adds that to a database and then someone at a later point checks to see if there's an income tax form from that address.

Wouldn't that generate false positives if the billing address is, say, a post office box while the corporate tax forms are filed from the home office?

Re:How's this work then?

[Anonymous Coward]

Look to Europe for a "solution" to that: Every website by or for Germans that isn't strictly private is required by law to link to an imprint from every page. Non-private includes every site with a banner ad, every site with regular editorial content and of course every for-profit site. So far this has been very profitable for lawyers who send costly cease and desist letters on behalf of competing businesses to site owners who don't follow that rule. Besides, most websites already identify their owner via the domain name Whois records...

Re: the tax man cometh

[Snarfangel]

I guess this is further evidence that there are two things one cannot escape - death and taxes.

Yeah, but death only comes for you once.

Interesting.

[JKConsult]

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.

Re:Interesting.

[Fezmid]

Woah, I just saw a big spider walk by, read your post, make some marks in a notebook, and then walk away! Freaky!

Re:Interesting.

[iminplaya]

Now, I don't claim my online poker winnings...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.

Yeah, baby! Right on! Hey, buddy. The amount don't matta. Just like Christmas, it's the thought that counts. Cheating is cheating. Fascinating bit of "logic" you got there. I have a teeny, tiny problem with people who think that a "little" cheating is ok, and that anybody who cheats more than they do is a filthy crook.

Tax cheats are tax cheats.

You think?

Re:Interesting.

[pla]

In the abstract, I'm not against it. Tax cheats are tax cheats.

Why? Why do people so readily accept the idea of "death and taxes"???

If our taxes actually went to reasonable uses, I'd agree with you. Infrastructure improvement, national -de-fense, international negotiation.

But no, instead we pay (in the US, at least) a third of our income toward fuck-all. I work so a quarter of the population who could work can sit at home and munch cheetos all day watching soaps. I work so some starving artist doesn't starve. I work so unappreciative kids can get their socialized babysitting and social indoctrination. I work so our oligarchy can squeeze their kids through low-GPA MBAs and perpetuate the lines of power. I work so we can kill arabs who inconveniently live too near "our" oil.



I can think of few more noble crimes than "tax cheat".

Re:Interesting.

[JKConsult]

The amount don't matta.

I knew I should have made myself more clear. Yes, I am cheating on my taxes. And yes, it's "just as bad" (I don't really think it is, and neither do you, because volume does matter, but we're both accepting this as part of the argument) as someone who sets up shady tax shelters to save billions.

What I was saying is that I win about $100 every year playing online poker. Yes, I could go to all the trouble of trying to get some sort of documentation, add it to my income, and pay the taxes. Or, I could pocket the $30 and forget about it. I do the latter. As I said, if busted, I would freely admit to it, and would accept the punishment, as I realize that I am cheating on my taxes.

There is a logic to my position. Part of the FASB (Financial Accounting Standards Board) standards include the concept of "cost-benefit" and "relevance" to reporting financials. The first may not apply here, as it basically states that if the cost of gaining the information (depreciating, say, light bulbs) outweighs the benefits of the users of the filings having it, then you don't need to worry. The second does matter. It basically states that (as opposed to something large, like property or equipment), if you're IBM and you buy a $5,000 desk for someone, they could give a flip whether you expense it or depreciate it. Because it doesn't matter. I consider my $100 winnings online versus my salary and go with the latter option, that it's so small as to be irrelevant. If the IRS disagrees, then I'm willing to pay the piper.

Re:Interesting.

[iminplaya]

That's not what I'm talking about. My point is that I'll declare what's required. I won't try to hide anything. He thinks he's getting away with something, and that it's ok because it's "just a little". So you're kind of off base here. And my second cousin-twice removed, who works at the DMV in Kansas City and has a neighbor whose mother-in-law works in the Pentagon says I'm NOT stupid!

Re:Interesting.

[UnknownSoldier]

> Is the IRS going to spend $300 on an auditor to collect $30 of taxes? Think about it.

This is the government we're talking about...

get mining

[Anonymous Coward]

The software in question is called DataDetective (win32)
http://www.sentient.nl/

parent company
http://www.smr.nl/

details are sketchy

[PhantomHarlock]

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

Re: the tax man cometh

[kfg]

Yeah, but death only comes for you once.

Well can you tell him that? I don't mind the company, per se, when spends some time sitting at the foot of my bed, but I could do without the anticipatory gleam in his eye. It's very disconcerting.

I think he's hoping that a bit of insomnia might just push me over the edge.

KFG

In the UK

[joe 155]

it is worth noting that (in the UK) the tax men don't need to be able to prove anything has actually been done wrong in order to follow up with an investigation - at which point you have to prove that you are innocent rather than them having to prove guilt. They can ask for your tax returns and bank info etc. for the last 10 years, if you don't have it its because you're committing tax fraud... I guess this might just be able to point them in the right direction rather than doing all the work, so even with just a name it might be enough...

I just hope I don't have the same name as someone whose on the make

Re:I for one ...

[macadamia_harold]

I for one welcome our new octopedic taxiverous overlords

What do you mean "new"?

Re:The funding for this program

[Handover Phist]

Yeah, but after taxes death is just a tired feeling...