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I.R.S. Deploys Artificial Intelligence to Catch Tax Evasion [1]

['Alan Rappeport', 'More About Alan Rappeport']

Date: 2023-09-08

Grover Norquist, founder and president of Americans for Tax Reform, said that the I.R.S. has a history of blaming its problems with enforcing the tax code on its algorithms. He argued that employing artificial intelligence was just another way for the I.R.S. to separate itself from future accusations of political bias or inequitable enforcement practices.

“This is one more way for them to put some distance in their decision-making,” Mr. Norquist said. “They can say, ‘Oh, we’re not auditing people we don’t like. This is science.’”

The I.R.S. has said little so far about how it intends to use artificial intelligence to crack down on tax evasion. Mr. Werfel suggested that the technology would be deployed to identify “compliance threats” that have been difficult to spot and that it would help the agency reduce unnecessary audits.

John Koskinen, a former I.R.S. commissioner during the Obama and Trump administrations, noted that the tax returns of big partnerships are among the most complex that the agency analyzes. He said algorithms that the I.R.S. already uses allow it to spot problems in tax returns, but that the ability to train computers to sift through thousands of pages of tax returns that have red flags would make it possible for the agency to more effectively determine whom to audit.

“Up until now, those partnerships have been impenetrable,” Mr. Koskinen said.

A Government Accountability Office report that was published in July found that the I.R.S. audit rate for larger partnerships had dropped below 1 percent since 2007 and that 80 percent of the audits that the agency did conduct did not find any noncompliance problems.

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[1] Url: https://www.nytimes.com/2023/09/08/us/politics/irs-deploys-artificial-intelligence-to-target-rich-partnerships.html

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