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Tax on USA uses date mining and predictive Analytics
Material posted: Publication date: 01-09-2017
In Russia and the CIS countries, tax crimes are not considered as something extraordinary for individuals. Underpaid tax? Well, it's an extra as necessary — and free. A completely different situation in the United States. There for tax evasion can be a long time to go to jail, this is one of the most serious crimes against the state, along with treason and espionage in favor of another state. So with the IRS (the so-called local tax office) it is better not to joke.

But the IRS is becoming more intelligent. She starts to use modern technology to identify those citizens, whose expenses do not meet officially received the income. About it writes the edition of the Vanderbilt Journal of Entertainment and Technology Law , with reference to the report is an adjunct Professor of business law at the University of Washington Kimberly Hauser (Kimberly A. Houser) and Professor of accounting University of Washington Debra Sanders (Debra Sanders).

Reportedly, the IRS is now engaged in data-mining public and commercial data sets (including social networking) to create detailed profiles of taxpayers, which tax experts analyze the data.

The authors of the report say that the methods of tax inspections remain largely unknown to the General public. At the same time there are doubts about their legality. According to some jurists, the collection of data from social networks and user profiling with data mining of their income may itself violate the law. Although users can spread information to the public, but tax inspection begins to build a profile before the start of the audit. The existence of data brokers (companies that collect information on users and resell it to interested parties) and the opportunity to buy via the Internet, information about virtually any person create a situation where a person loses control over their personal data. This is especially dangerous if the person concerned is the state in the person of the tax service.

The lack of transparency and accountability in this process raises even more serious questions. Secretive government action on this fee to the state is illegal, and also can lead to discrimination.

The authors of the report list all collection methods that the IRS uses, and articles of laws that may violate the tax Inspectorate in the process of collecting and mining data.

Thus, information sources of the tax:

  • W-2 forms from the employer (standard practice).
  • Recording phone conversations. According to information from the American Union of civil liberties, the IRS was in the number of customers of equipment for wiretapping cell phones (devices, known as Stingray) in 2009-2012.
  • E-mail. The Act requests the freedom of information in 2013 showed that the IRS was going through a personal e-mail taxpayers without a warrant.
  • The social network. On request in accordance with the Law on freedom of information the IRS has confirmedthat collects information from social networking sites. In the manual the IRS seven years ago listed Facebook, MySpace and YouTube as sources of information about taxpayers.
  • Date mining involves the analysis of large data sets, which were collected with the purpose different from that with which they are tested. The goal is to identify previously unknown relationships in data. On the use of data mining reported in internal documents to the IRS. Independent sources say the IRS thus clarifies the profiles of taxpayers.

Thus, the following potential violations of the law:

  • A. Violation of fair practices for handling information.
    1. The lack of notice.
    2. A secret data collection system (a violation of the Law on the protection of individual rights, 1974 (Privacy Act of 1974)).
    3. The lack of consent of the taxpayer to contact the IRS with a third party (violation of section 7602 of the internal revenue Code (Internal Revenue Code)).
    4. Loss of control by the user over the use of personal information.
  • B. Lack of transparency in the algorithm.
    1. Violation of the Law on administrative proceedings (Administrative Procedure Act).
    2. Errors data mining: inaccurate profiles of taxpayers.
    3. Potential discrimination. After self-learning prediction algorithms will start with a prejudice is to people according to skin color, place of residence and other discriminatory characteristics.
    4. Arbitrary and whimsical action of the Agency. For all the aforementioned reasons, the use of data-mining and learning algorithm can lead to the fact that the state automated system of decision-making will be incomprehensible to the human mind solution.
  • C. data Collection.
    1. Violation of the Law 1986 about the privacy of electronic communications (Electronic Communications Privacy Act) — there are obvious violations in connection with the wiretapping and unauthorized mail reading.
    2. Searches without warrants (view mail on the server, which was stored longer than 180 days).
    3. Improper legal procedure.
    4. Self-incrimination — people actually give unfavorable testimony, expose themselves, and the compulsion of such testimony prohibited by the Fifth amendment to the Constitution.
  • D. Other Federal violations.
    1. Violation of the Law on the protection of individual rights, 1974.
    2. Violation of the Act 1988 the computer matching data and protection of privacy (Computer Matching and Privacy Protection Act 1988).
    3. Violation of section 6013 of the internal revenue Code, which States that information relating to taxes shall be kept confidential and not be disclosed in any way. We are talking about the relevant regulations for storage and protection of this information from IRS penalties for IRS employees for violations of the rules.
    4. The law on data quality (Data Quality Act) requires Federal agencies to take actions to check the quality of data collected.

Overall, the actions of the us IRS already can violate a number of Federal laws. It is possible that in the coming years, their advanced methods of data mining will adopt Russian colleagues, especially in the budget is now a large deficit — and the state imperative to increase tax revenues from the citizens.

Then you better think twice before you post in the "kontaktika" holiday photographs in the Caymans or the new car you bought, he was dragged into online tournament poker. Thought that the tax did not know about it? Now learns.


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