Legal Calculators and the Tax System

17 Pages Posted: 30 Jun 2019 Last revised: 27 Feb 2020

See all articles by Joshua D. Blank

Joshua D. Blank

University of California, Irvine School of Law

Leigh Osofsky

University of North Carolina (UNC) at Chapel Hill

Date Written: June 28, 2019

Abstract

When consumers have questions about companies’ services and products, whether medical insurance, airline tickets or home appliances, they almost always encounter automated agents and other forms of customer service technology. Increasingly, tax authorities have begun to offer online decision-making tools to provide guidance regarding the tax law to taxpayers. The IRS’s “Interactive Tax Assistant,” for instance, asks taxpayers personal questions and then delivers answers on topics such as whether gambling losses are deductible, self-employment tax is owed and exceptions to early IRA retirement account withdrawal penalties apply. These online tools can be described as “legal calculators”: they not only perform mathematical calculations, but they attempt to calculate taxpayers’ legal consequences as well.

Legal calculators often embody a characteristic that can be termed “simplexity.” As we have theorized, simplexity occurs when the government presents clear and simple explanations of the law without highlighting its underlying complexity or reducing this complexity through formal legal changes. In earlier work, we argued that some elements of IRS publications (plain language summaries of the law for the general public), present contested tax law as clear tax rules, add administrative gloss to the tax law and fail to fully explain the tax law. In this Article, prepared for a symposium on Artificial Intelligence and the Future of Tax Law and Policy, we show that simplexity also occurs when the government offers legal calculators to deliver guidance to taxpayers. We argue that legal calculators present the potential for even more pervasive and powerful forms of simplexity than static IRS publications. After highlighting existing and potential simplexity in the IRS’s legal calculators, we present an agenda of questions for future research.

Keywords: Artificial Intelligence, Automation, Tax Simplification, Taxpayer Communication, Transparency, IRS, Tax Compliance, Plain Language

JEL Classification: H20, H23, H24, H25, H26, H29, K34

Suggested Citation

Blank, Joshua D. and Osofsky, Leigh, Legal Calculators and the Tax System (June 28, 2019). 15 Ohio St. Tech. L.J. __ (forthcoming, 2019), UNC Legal Studies Research Paper, UC Irvine School of Law Research Paper No. 2019-40, Available at SSRN: https://ssrn.com/abstract=3411748

Joshua D. Blank (Contact Author)

University of California, Irvine School of Law ( email )

401 E. Peltason Dr.
Ste. 1000
Irvine, CA 92697-1000
United States

HOME PAGE: http://www.law.uci.edu/faculty/full-time/blank/

Leigh Osofsky

University of North Carolina (UNC) at Chapel Hill ( email )

102 Ridge Road
Chapel Hill, NC NC 27514
United States

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