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The Tax Man in Your Website Logs – A Horror Story Part II

February 7th, 2007

If you’ve been scouring your website logs for a bot named “Xenon” since reading our last post, you can stop now. While Google’s spider is easy to recognize by the familiar moniker “Googlebot,” the TaxMan won’t be so easy to spot.

The bot names, or ‘user agents’ for the web savvy, of the spiders used by the tax cartel have not been released. Nor will they. Marten den Uyl of data mining firm Sentient Machine Research says the user agent (bot name) is likely to be variable or configurable on the tax investigator’s part.

For the web savvy, that means you cannot add a modifier to your robots.txt file to keep the tax man out.

Generally, it’s easy to distinguish bot traffic in your server logs by the sheer speed at which a spider (bot) can traverse web pages. When it comes to keepign the TaxMan out, think again, and think covert.

Where a typical search engine bot can hit thousands of pages in a second, Xenon uses a slow search paradigm that mimics human surfing. The TaxMan’s spider could take minutes, hours or even days to digest your website.

The slow search prevents Xenon’s bot from creating excess traffic or drawing attention to itself in the website’s server logs.

Xenon’s spider can even be configured to target specific niches… industries that traditionally have a high incidence of non-filing. While you may not know which industries have a high rate of tax evasion, rest assured that the TaxMan does.

Once the web pages are crawled and documented, Xenon’s Identity Information Extraction Module will interface with national databases that contain information such as names, city names and streets. It will then cross refer all the information it’s gathered with national tax records.

“Of course it’s not illegal,” Par Strom, a noted privacy advocate in the world of Swedish IT, says. “I don’t feel quite comfortable having a tax office sending out those kind of spiders.”

If you’re a little nervous about the idea of TaxMan spidering your website, let us help you clean up your tax records now. Browse our website to learn how the DioGuardi AmnestyRX™ lawyer-negotiated settlement can protect you from criminal prosecution for tax evasion and protect your personal financial records from the TaxMan. Or call us directly at 1-877-TAXRX-02.

Posted in Tax Evasion, Technology, The Tax Man |

Beware New Search Bot in Your Website Logs – It’s the TaxMan

January 31st, 2007

“Websites around the world are getting a new computerized visitor among the Googlebots and Yahoo web spiders: The TaxMan. 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 track operators of online shops, poker and porn sites.”

Wired News, January 25, 2007

eye_spy500.jpgThe program, named “Xenon” in reference to the auto headlights that light up dark places, started in the Netherlands in 2004 and has been expanded with the assistance of Amsterdam-based data mining firm Sentient Machine Research.

The five nations participating in the tax enforcement cartel are Canada, Austria, Denmark, the Netherlands and the UK. Sweden is set to join this year.

Colette Gentes-Hawn, of Canada Revenue Agency, (CCRA) has confirmed participation in this online tax crackdown.

“We need more sophisticated tools for the new age of commerce. Now we need a spider,” Gentes-Hawn said in a Toronto Star article on Jan 29, 2007. “There’s no difference between a business on the Internet, a Sears catalogue and a business down the street. They’re all businesses and they all have to pay their taxes.”

The Xenon is basically a spider that crawls websites, determines the website’s probable owner, and then cross-references data from the site with national databases and tax records to help find tax evaders.

If you are earning income from a web-based business and aren’t reporting it on your tax return, it’s only a matter time of time before the TaxMan turns his cyber-eyes on you. Browse our website to learn how the DioGuardi AmnestyRX™ lawyer-negotiated settlement can protect you from criminal prosecution for tax evasion and protect your personal financial records from the TaxMan. Or call us directly at 1-877-TAXRX-02.

Posted in Tax Evasion, Technology, The Tax Man |

$88 Billion Stashed in “Tax Havens” May Be Subject to Taxes

December 17th, 2006

Last year, Statistics Canada revealed that in 2003 Canadians invested $88 billion in off-shore “tax havens”, a figure that’s eight times greater than in 1990. According to Auditor General Fraser, Canadians have avoided hundreds of millions of dollars in taxes through the use of tax havens, located primarily in Barbados, Bermuda, the Cayman Islands, the Bahamas and Ireland.

The Canadian Government has become increasingly concerned about this loss of tax revenues.

In late November, Finance Minister Jim Flaherty announced that Ottawa is reviewing the use of tax havens to avoid taxation. Financial experts suggest that the 2007 budget will include amendments to the income tax act to “ensure that income earned by Canadians through foreign jurisdictions, including tax havens, is subject to tax as if it had been earned in Canada.”

Now, the House of Commons is weighing in on the issue. According to an article in The Toronto Globe & Mail; “The federal government [should] eliminate the use of tax havens in an effort to ensure that all corporations, businesses and individuals pay their fair share of taxes,” the House of Commons finance committee said yesterday in a report making suggestions on what should be in the 2007 budget.

Tax lawyer Paul DioGuardi says this legislation has been in limbo since 2001, and if Flaherty includes this amendment in his 2007 budget, it may very well be made retroactive to 2001. That means billions of dollars will be subject to tax collection by the Canada Revenue Agency. It also exposes Canadians with offshore accounts to potential charges of criminal tax evasion and crippling civil penalties if they fail to take steps to report this income on their Canadian tax returns.

Canadians with unreported offshore income can resolve their tax situation without prosecution or penalty by seeking a tax amnesty disclosure.The DioGuardi AmnestyRx lawyer-negotiated tax settlement ensures that the taxpayer’s identity remains confidential until such time as a settlement is presented to the tax authorities and accepted in principle.

If you have income offshore in Barbados, Bermuda, the Cayman Islands, the Bahamas or Ireland, contact DioGuardi Tax Law to arrange a telephone consultation before new legislation exposes you to the scrutiny of the TaxMan.

Posted in Tax Evasion, Tax Law, The Tax Man |

Press Release from the Government of Canada

June 8th, 2006

A Press Release issued from the Government of Canada, June 7, 2006:

Alert: Tax evasion has consequences!
Paying the taxes you owe is not only your responsibility – it’s the law.The Canada Revenue Agency (CRA) uses many tools to identify those who fail to file an income tax return, register their business account, or provide the CRA with complete and accurate information.The CRA has the authority under the Income Tax Act and the Excise Tax Act to use a number of tools to get delinquent filers to comply, including civil and criminal prosecution that can lead to fines, penalties, and even jail.Don’t let it happen to you!

If the CRA suspects that you failed to meet some or all of your tax obligations, it may decide to conduct an audit. Once this audit is completed, and if an adjustment is required, the CRA will send you a Notice of Reassessment. If you do not pay any amount owed, plus applicable interests and penalties, CRA collections officers will take action to collect it and any interest and penalties that apply.

If you do not file the required returns and statements, the CRA can also seek a court order for you to comply. Alternatively, the CRA can recommend to the Department of Justice that you be prosecuted for failing to file the required returns and statements.

On summary conviction, the court may fine you 50% to 200% of the tax evaded and sentence you to a jail term of up to two years. When proceeding by indictment, the court may fine you 100% to 200% of the tax evaded and sentence you to a jail term of up to five years.

In cases of gross negligence, the Income Tax Act and Excise Tax Act allow the CRA to also assess a penalty of up to 50% of the unpaid tax or the improperly claimed benefit.

The CRA publicizes court convictions to maintain confidence in the integrity of the self-assessment system and as a deterrent to increase compliance with the law. The information released to the media comes only from court records and not from confidential information held by the CRA.

If you wish to come forward and correct previously omitted or erroneous information, you can do so through the CRA’s Voluntary Disclosures Program. If you make a full disclosure before any compliance action or investigation is started, you may only have to pay the taxes owing plus interest.

Posted in Tax Amnesty, The Tax Man |

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