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Tax Season Wrap Up: Beware What You Share

Social Sonar - Wednesday, April 17, 2013

As if running a small business weren't hard enough already, the IRS is focusing in on small-business owners this year. What could that potentially mean for you? While the chances of getting audited are pretty low, less than 1 percent, no one is completely exempt. Any suspicious activity on your tax returns could mean an increased risk for audit. If you've got unusually large deductions in your recently filed taxes, for example, you may already be raising a big red flag for the IRS.

So what does any of this have to do with social media? Well, if you've written off certain expenses throughout the fiscal year, you want to make sure that the story told by published activity on your social networks corroborates it. If you're the kind of user who regularly checks in or updates your status, you've already created a digital trail. Does this match up with information you've stated on tax return? An audit could reveal discrepancies.

Although it's not totally clear what kind of digital information the IRS could potentially use against you when it it comes to being audited, it's better to be safe about what you share. Some possible avenues for keeping yourself protected could include limiting the dedicated users from your business you allow to share information through your social networks. It's also a good idea to draw up guidelines or contracts stipulating what people should and shouldn't share through company channels.

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As bigger companies expand to social media outlets to connect with potential investors, the role that sharing so called “material information” online could have is undergoing constant revision. For instance, Netflix recently used Facebook as a channel to share information about viewership. It's a pioneering move that opens the doors for other businesses to do the same.

But just as sharing information about your travels and expenses in an open forum could come back to haunt you around tax time, you should also be wary about sharing material information. Sure, it could be a terrific way to attract people interested in having a stake in your business. On the other hand, you need to assure that it's accurate, up-to-date and that it doesn't misrepresent facts about your business.

It seems that the takeaway lesson here is that while increased transparency is an in incredibly beneficial part of being on social media, it's always important to identify sensitive company information that could cause more harm than good.

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