Geolocation Data for Tax Collection

Smartphones Snitch on Fugitives, Deadbeats, Tax Evaders

Social media like Yfrog, Flickr, Twitter, Instapaper, Foursquare and innumerable others broadcast an astonishing trove of publicly-accessible geolocation data about users.

State Tax Audit
This data can be aggregated so an observer can track people who are, for example, using mobile devices to tweet, “check-in” and publish photo albums of their minute-to-minute lives.  Some mobile apps broadcast geolocation data constantly, automatically. A program aptly named “Creepy” demonstrates how to aggregate geolocation data from multiple public sources.  It can plot a social media enthusiast’s up-to-the minute movement on a Google map!

Arrest Warrants Executed

Publicly-accessible geolocation data will be a bonanza to law enforcement agents, such as police and tax collectors.

Law enforcement is limited by geographic jurisdiction.  It is easier for a government officer to enforce his state’s laws on a subject when the subject is standing within the borders of the state.  When the subject is physically located in the state, the local officer can verifiably deliver official papers to the subject, or even detain or arrest her.

Suppose a subject lives in Nevada, but Oregon has a warrant out for her arrest (perhaps for child support or a speeding ticket).  It is much easier for the State of Oregon to execute that warrant when the subject visits Oregon.

It is not news that police and tax collectors monitor suspects on social media.   But what is news is that social media are now publishing precise, real-time location data about those suspects.

Checking-in to an Airport

Fugitives and tax scofflaws beware!  You would be foolish to broadcast your location when you temporarily visit a state that wants you.

If there is a warrant for your arrest in the State of Illinois,* don’t use your iPhone to “check-in” as you transfer through Chicago's O’Hare Airport.  Local police may race to Gate B30 to greet you.

If you owe taxes in California, don’t post a geo-tagged photo on Picasa when you arrive at LAX airport in Los Angeles.

I envision tax administrators in hungry states setting up enforcement operations at major airports.

Short-term Income Tax Earnings

Here’s another prediction:  State revenue authorities will use geolocation data to support claims that people working temporarily (such as a day or a week) within their borders owe tax on the income they earn during that time.  States already look at public sources like newspaper sports pages to assert taxes on high-income earners, like professional athletes, who work temporarily within their borders.  But public geolocation data will enable states to expand their enforcement to taxpayers of lower profiles.



Attorney Wright teaches law of data security and investigations at SANS Institute.

* State of Illinois arrested tax evader, Jacob Sabu, when he arrived at O’Hare Airport.

P.S. At least one mobile phone carrier, Sprint, has set up a portal to allow law enforcement easy access to subscriber geolocation data.  Wired.com “Feds ‘Pinged’ Sprint GPS Data8 Million Times Over a Year,” December 1, 2009.