Known as Xenon, the program was developed in 2004 by the Dutch equivalent to the IRS, Belastingdienst. The program, which is primarily a spider, works by downloading webpages as well as the links on the page.
The data collected on the spidered webpages provides tax authorities with information on the commercial traffic visiting a particular site. Authorities then use the data to develop leads on suspected tax evaders.
Xenon has been adopted and enhanced by the tax authorities in Austria, Denmark, Britain and Canada.
Dag Hardyson, the national project leader for the Swedish tax authority, Skatteverket, which will begin using Xenon this year, said the program’s spider is the opposite of the spiders used by search engines such as Google.
“With Xenon it may take minutes, hours or even days to do a slow search,” he said, adding that the spider is “smart about link selection and context.”
Using a slow search, the spider scans the website without creating excess traffic or drawing attention to the site’s server log.
Marten den Uyl of the data-mining firm Sentient Machine Research, which administers Xenon, declined to give details on precisely how the program works. But he did admit that the spider could be trained to target specific niche industries that notoriously underreport tax information.
According to a Wired news article, the data collected by Xenon includes useful information such as the locations of a site’s customers, which tax authorities can then cross-reference with their own databases for a more complete taxation picture.
Par Strom, a Swedish privacy advocate, said he was troubled by his government’s decision to use the spider.
“Of course it's not illegal,” Strom said, “but I don't feel quite comfortable having a tax office sending out those kind of spiders.”
According to the report in Wired News, the U.S. is not part of the Xenon program, but the IRS would neither confirm nor deny using the spidering application in its investigations.