Crypto bros and those of you with 'creative' accountants, heads up - the IRS is beefing up its ability to flag accounts for audits. Not only is this the first year that major US-based custodial crypto brokers are reporting gross proceeds to the agency, the IRS is getting aggressive elsewhere. Last year they paid Palantir $1.8 million to identify cases for audits, collections, and potential criminal investigations with a high probability of success. The contract was the latest in over $200 million the IRS has paid Palantir since 2014. 

According to documents obtained by WIRED, the new tool - called the Selection and Analytic Platform (SNAP) - is designed to help IRS staff analyze unstructured data from the agency's existing internal databases. The goal is to more efficiently identify "high-value" targets amid the IRS's fragmented legacy systems, which include over 100 business systems and 700 case-selection methods built up over decades.

The pilot is currently focused on areas like Residential Clean Energy Credits, disaster-zone tax relief claims, and gift tax returns. It also helps extract key details from supporting documents, such as contracts, vendors, and related records, to flag potential fraud or underreporting more efficiently. Importantly, SNAP works only with the IRS's existing internal data - it doesn't (yet) pull in fresh external feeds like social media or third-party apps.

Those who may get SNAPped up for an audit include;

• People or businesses with big clean energy credit claims (especially if documentation is weak, inflated, or mismatched with other IRS records)

• Individuals who filed disaster relief deductions/credits that appear suspicious

• High-net-worth individuals making large gifts that may trigger gift tax issues