IRS Will Use AI To Restore Tax Fairness And Stop Tax Evasion Schemes

Artificial Intelligence is a new tool of the IRS thanks to Inflation Reduction Act funding.

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IRS Announces AI Will Restore Tax Fairness

I did not expect to be writing about AI twice today. But here we are. Reader “Mark” sent a link to this IRS announcement worth discussing.

IRS announces sweeping effort to restore fairness to tax system with Inflation Reduction Act funding

Capitalizing on Inflation Reduction Act funding and following a top-to-bottom review of enforcement efforts, the Internal Revenue Service announced today the start of a sweeping, historic effort to restore fairness in tax compliance by shifting more attention onto high-income earners, partnerships, large corporations and promoters abusing the nation’s tax laws.

The effort, building off work following last August’s IRA funding, will center on adding more attention on wealthy, partnerships and other high earners that have seen sharp drops in audit rates for these taxpayer segments during the past decade. The changes will be driven with the help of improved technology as well as Artificial Intelligence that will help IRS compliance teams better detect tax cheating, identify emerging compliance threats and improve case selection tools to avoid burdening taxpayers with needless “no-change” audits.

As part of the effort, the IRS will also ensure audit rates do not increase for those earning less than $400,000 a year as well as adding new fairness safeguards for those claiming the Earned Income Tax Credit. The EITC was designed to help workers with modest incomes.

Prioritization of high-income cases. In the High Wealth, High Balance Due Taxpayer Field Initiative, the IRS will intensify work on taxpayers with total positive income above $1 million that have more than $250,000 in recognized tax debt. Building off earlier successes that collected $38 million from more than 175 high-income earners, the IRS will have dozens of Revenue Officers focusing on these high-end collection cases in FY 2024. The IRS is working to expand this effort, contacting about 1,600 taxpayers in this category that owe hundreds of millions of dollars in taxes.

Expansion of pilot focused on largest partnerships leveraging Artificial Intelligence (AI). The complex structures and tax issues present in large partnerships require a focused approach to best identify the highest risk issues and apply resources accordingly. In 2021, the IRS launched the first stage of its Large Partnership Compliance (LPC) program with examinations of some of the largest and most complex partnership returns in the filing population.

 

Earned Income Tax Fraud

The IRS publication on the Earned Income Tax Credit contains this amusing statement: “IRS estimates that between 21 percent to 26 percent of EITC claims are paid in error. Some of the errors are unintentional caused by the complexity of the law, but some of the claims are intentional disregard of the law.”

“It’s critical that the agency addresses fundamental gaps in tax compliance that have grown during the last decade,” said IRS Commissioner Danny Werfel (first link).

So let’s not focus on EIC with a known 21-26 percent error rate. Instead, let’s go on fishing expeditions.

Why not do both? I suppose a fundamental error rate at least one in five is not fundamental enough. Alternatively, it’s simply not fair.

 

Artificial Intelligence vs Screen Writers and Actors

Fearful of losing jobs to AI, the writers and actors went on strike starting July 14. Did you notice?

On July 24,I asked If the Screen Actors and Writers Strikes Went on Forever, Who Would Care?

 

Who’s Better at Generating Innovative Ideas, ChatGPT or M.B.A. Students?

Earlier today I asked Who’s Better at Generating Innovative Ideas, ChatGPT or M.B.A. Students?

I compare and contrast the protests by the Screen Writers and Actors guilds to that of the UAW.

It’s really the same story. Change happens. It’s disruptive whether by AI or any other technology.

“What, me worry?”

Some on Twitter predict, even cheer for my demise to AI writers for my stance against the UAW.

I am so small no one would even want to bother to try to replace me.

If I am replaced by AI, so be it. No one is owed a living. Not the Screen Actors Guild, not the UAW, and not me.

 

Tax the Robots

AI is so threatening that Paul Krugman and Bernie Sanders want to tax the robots.

For discussion, please see Will AI Replace Skilled Programmers? When? Should We Tax Robots?

To Stop AI, Lunatics Are Willing to Risk a Global Nuclear War

On April 3, I noted To Stop AI, Lunatics Are Willing to Risk a Global Nuclear War

If somebody builds a too-powerful AI, under present conditions, I expect that every single member of the human species and all biological life on Earth dies shortly thereafter says Eliezer Yudkowsky, an American artificial intelligence researcher.

Yudkowsky also said countries should be “willing to run some risk of nuclear exchange if that’s what it takes to reduce the risk of large AI training runs.”

I commented …

 

Seriously Crazy

Any scientist seriously proposing AI is certain to kill all of mankind and that preemptive nuclear war is preferable, is seriously crazy.

Should Yudkowsky resign from his current job and undertake a new career for which he is highly suited, that being a science fiction writer?

The answer isn’t clear, actually. Yudkowsky now looks like a raging mad lunatic. As a science fiction writer he might be taken far more seriously. 

 

Nuclear War Risk Less Than AI Risk

Not to worry, a nuclear exchange wouldn’t kill everyone but it is certain that AI would.

So there you have it. We should resort to a nuclear war, if necessary, to stop AI.

Hooray! That would save the Screen Writers Guild. As an added bonus, nuclear war would rein in the IRS for those still living.

This post originated on MishTalk.Com

Thanks for Tuning In!

Mish


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