Goldburd | Goldburd McCone LLP

For nationwide tax guidance, call:
212-235-1817 or toll-free at 866-712-9505.

Goldburd | Goldburd McCone LLP

For nationwide tax guidance, call: 212-235-1817 or toll-free at 866-712-9505.

Serving Individual And Corporate Tax Clients Nationwide From Our New York, New Jersey, Florida And California Offices

Steven Goldburd and Benjamin A Goldburd

Since 1983, our tax firm has skillfully represented individuals and corporations across the United States and around the globe from our offices in New York, New Jersey, California and Florida.

Will the IRS use AI in tax audits?

On Behalf of | Dec 12, 2023 | Tax Audits

Internal Revenue Service (IRS) Commissioner Daniel Werfel recently announced he intends to make use of Artificial Intelligence (AI) to aid in tax audits. The agency is motivated to make use of this new tech as the IRS continues to struggle to deliver on promised audit results. He points to the benefits of the tech as a way to better utilize his workforce, notably use of AI for its ability to find patterns of noncompliance — a relatively tedious and time-consuming process made much more efficient through use of AI.

Thus far, the agency has made clear it will focus on two primary targets:

  1. High-income earners. Commissioner Werfel announced plans are already underway to audit 1,600 millionaires the agency claims owe $250,000 or more in back taxes.
  2. Big corporations and partnerships. Werfel also explained the agency has targeted 75 partnerships that average over $10 billion in assets.

The IRS has also stated it will also focus in on efforts regarding digital assets, Report of Foreign Bank and Financial Accounts (FBAR) violations, and labor brokers.

What could go wrong?

As the plot of many a science fiction movie has warned us, use of AI comes with risk. Although the IRS’ use is unlikely to result in a machine led uprising, reasonable concerns remain. One of the more notable includes concern use of AI will lead the feds to unfairly target taxpayers simply because they fall out of the usual patterns.

What if I am in the IRS’ crosshairs?

This is just one of the agency’s many ways to gather evidence and move forward with an audit. The law requires the agency follow specific protocol and respect taxpayer’s rights, but it does not always abide by these regulations. As such, taxpayers who find themselves under government scrutiny for their tax filings are wise to seek legal counsel to help protect their rights. The attorneys at Goldburd McCone are familiar with these strategies and can provide representation during the investigation as well as through litigation, if necessary.