Agency focus will shift attention to wealthy from working-class taxpayers; key changes coming to reduce burden on average taxpayers while using Artificial Intelligence and improved technology to identify sophisticated schemes to avoid taxes
New York Times, I.R.S. Deploys Artificial Intelligence to Catch Tax Evasion:
The Internal Revenue Service has started using artificial intelligence to investigate tax evasion at multibillion-dollar partnerships as it looks for ways to better police hedge funds, private equity groups, real estate investors and large law firms.
The announcement on Friday was intended to show how a more muscular I.R.S. is using some of the $80 billion allocated through last year’s Inflation Reduction Act to target the wealthiest Americans and tackle the kinds of cases that had become too complex and cumbersome for the beleaguered agency to handle.
The agency’s new funding is supposed to help the I.R.S. raise more federal revenue by cracking down on tax cheats and others who use sophisticated accounting maneuvers to avoid paying what they owe. But the allocation has been politically contentious, with Republicans claiming that the I.R.S. will use the funding to harass small businesses and middle-class taxpayers. Earlier this year, Republicans succeeded in clawing back $20 billion as part of an agreement to raise the nation’s borrowing cap.
The political fight has put the onus on Democrats and the Biden administration to show that the funding is primarily enabling the I.R.S. to target wealthy Americans and corporations who may have engaged in tax evasion.
“These are complex cases for I.R.S. teams to unpack,” Daniel Werfel, the I.R.S. commissioner, said in a briefing with reporters. “The I.R.S. has simply not had enough resources or staffing to address partnerships; in a real sense, we’ve been overwhelmed in this area for years.”
The fight over I.R.S. funding is continuing, as the House and the Senate try to agree on spending legislation to avert a possible government shutdown at the end of the month. …
As part of its recruiting strategy, the I.R.S. has been looking to hire data scientists to develop new in-house artificial intelligence tools. Mr. Werfel said that the agency is also collaborating with outside experts and contractors on the project.
Last month, the I.R.S. said it had increased its full-time staff to nearly 90,000, a level not seen in more than a decade.
- Bloomberg Law, IRS Uses AI to Chase Tax Cheats, Catch Up After Underfunded Era
- Forbes, IRS Plans To Ramp Up Enforcement On Millionaires, Partnerships, And Crypto—And To Harness AI
- Wall Street Journal, IRS, With AI Help, Readies Audits of Large Hedge Funds, Real Estate Firms
- Washington Post, IRS to Use AI to Crack Down on Ultra-Rich Taxpayers and Partnerships
