A contract with billionaire Peter Thiel’s 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.
The IRS on Sept. 27 signed the deal for $99 million over seven years, according to the contract. It comes at the end of a period when the Internal Revenue Service lost hundreds of special agents to budget cuts while being overwhelmed by data volume that reached the equivalent of 1.5 trillion text files last year, a tenfold increase in a decade.
But while 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.
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.