IRS Signs Deal with Palantir Technologies to Catch Tax Cheats

 

A contract with Palantir Technologies will give the IRS new firepower to pursue tax cheats by connecting the dots in millions of tax filings, bank transactions, phone records, and even social media posts.

By giving the agency more tools to find and prosecute cheats, the scope of the data mining Palintir will be empowered to perform has some tax lawyers fearing they’ll be blindsided as they try to defend clients facing large fines and jail time.

“This puts the IRS in a very strong position. They’re turning over billions of documents and some could interpret it as being Big Brother-ish,” said Josh Ungerman, former IRS senior trial attorney and Department of Justice special assistant U.S. attorney.

Palantir has had access since 2013 to personal information like text messages, passport numbers, criminal history, and mothers’ maiden names, according to a 2015 IRS privacy report.

Since its 2004 founding, Palantir has provided the government’s go-to software platform Palantir Gotham, locking in more than a half-billion dollars in government contracts and harnessing its data analysis capability for the CIA, the Department of Justice, and the Department of Defense.

If a U.S. taxpayer moves assets from a European bank to the Cayman Islands and then uses various ATMs to withdraw cash to purchase a second home in Florida, Palantir’s software can connect those dots and present a package of information that can be used by the IRS to initiate an investigation.

It could also catch someone who claims a certain deduction in a tax filing and then posts pictures on social media that contradict the information.

Practitioners will need to “challenge their clients to tell them everything or else things can turn ugly,” Ungerman said.

You can read the rest of the article at Bloomberg tax.

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