AI and the Future of Tax Avoidance
Tax Notes Federal, December 4, 2023, p. 1809
8 Pages Posted: 20 Dec 2023
Date Written: December 4, 2023
Abstract
This essay directly addresses the significant shift artificial intelligence (AI) is bringing to tax avoidance. AI is revolutionizing the field, previously reliant on expert human navigation, by enabling more efficient tax planning within legal parameters and empowering administrators to detect and counteract avoidance strategies. The distinction between strategic tax planning and abusive avoidance is becoming clearer thanks to AI, challenging tax professionals to reassess their roles and responsibilities in this evolving landscape.
The need for international collaboration in the development of AI for tax avoidance is emphasized, as AI can exploit gaps between different tax regimes, necessitating comprehensive responses. These systems, rich in data and analytics, will predict legislative changes and socio-economic impacts, shaping tax law application and planning.
The essay calls for immediate action in rethinking tax policy principles in the AI era. It highlights the importance of dialogue among policymakers, tax practitioners, and technology experts to ensure AI’s integration into tax planning is beneficial, maintains legal integrity, and supports fiscal fairness. The decisions made today regarding AI in tax avoidance will dictate whether the future of tax planning becomes more equitable or further widens the divide between taxpayers and authorities.
Keywords: tax avoidance, artificial intelligence, legal singularity, anti-abuse, AI
JEL Classification: H0
Suggested Citation: Suggested Citation