Benjamin Alarie (Osler Chair in Business Law, University of Toronto; CEO, Blue J Legal), et al., Automated Tax Planning: Who’s Liable When AI Gets It Wrong?, 180 Tax Notes Fed. 2297 (Sept. 25, 2023):

Considering the continued proliferation of and rapid advancement in artificial intelligence technology, tax professionals are increasingly finding themselves confronted with novel accountability questions. If I render erroneous tax advice based on the output of an AI, to what extent will I be held professionally responsible? How do I navigate situations in which the AI’s tax analysis differs from my own, even if I struggle to document or even explain why I expect a different outcome? As AI becomes more powerful and is responsible for informing a greater number of important decisions, the challenge of assigning and apportioning this liability becomes progressively more difficult.

Inevitably, tax professionals will increasingly turn to AI-driven tools for assistance. Forty percent of legal professionals use or plan to use generative AI, and 50 percent believe that generative AI will transform legal practice. What do tax practitioners need to know before they dive into using generative AI in their daily work? This installment of Blue J Predicts explores the novel liability considerations that will arise as professional firms implement AI tools for automated assistance with tax planning and analysis. It examines the ways in which AI frustrates and upends traditional legal concepts of liability by complicating who is liable when an AI-informed analysis is flawed. It also explores approaches that regulators and tax practitioners can take to shield themselves against adverse AI consequences as they integrate computational tools into their workflow. Ultimately, it notes that the blame game is perhaps the same as it ever was — the responsibility for competent advice lies with the tax professionals who employ these and other tools.

Blue J Tax Notes Federal articles:

• An Unprofitable Pretax Venture Can Still Be a Partnership, 171 Tax Notes Fed. 1951 (June 17, 2021)
• Economic Substance Doctrine: Still Giving Perrigo Heartburn?, 172 Tax Notes Fed. 599 (July 26, 2021)
• Captive Insurance Appeal in Reserve Mechanical Will Likely Fail, 172 Tax Notes Fed. 1431 (Aug. 30, 2021)
• Seventh Circuit Affirms Spouse Is Not So Innocent on Appeal, 172 Tax Notes Fed. 2149 (Sept. 27, 2021)
• Would Management Fees by Any Other Name Still Be Deductible?, 173 Tax Notes Fed. 499 (Oct. 25, 2021)
• Battling Uphill Against the Assignment of Income Doctrine: Ryder, 173 Tax Notes Fed. 1253 (Nov. 29, 2021)
• Predicting Worker Classification in the Gig Economy, 173 Tax Notes Fed. 1733 (Dec. 20, 2021)
• Using Machine Learning To Crack The Tax Code, 174 Tax Notes Fed. 661 (Jan. 31, 2022)
• Using Machine Learning to Evaluate the Existence of a Trade or Business: Olsen, 174 Tax Notes Fed. 1231 (Feb. 28, 2021)
• Timing Is Everything: The Step Transaction Doctrine in GSS Holdings, 174 Tax Notes Fed. 1849 (Mar. 28, 2021)
• The Debt-Equity Distinction and Tribune Media, 175 Tax Notes Fed. 593 (Apr. 25, 2022)
• Disguised Distributions and Management Fees: Aspro Revisited, 175 Tax Notes Fed. 1401 (May 30, 2022)
• Reserve Mechanical Microcaptive Insurance Arrangement Denied On Appeal, 175 Fed Tax Notes 2037 (June 27, 2022)
• Situational Awareness: Accurate Financial Recordkeeping and Business Deductions, 176 Tax Notes Fed. 713 (Aug. 1, 2022)
• Deducting Legal Expenses: Unpacking the IRS's Appeal In Mylan, 176 Tax Notes Fed. 1419 (Aug. 29, 2022)
• Tax Credits That Bond a Partnership: Revisiting Cross Refined Coal, 176 Tax Notes Fed. 2069 (Sept. 26, 2022)
• Chemoil: Economic Substance, Tax Credits, and Unprofitable Ventures, 177 Tax Notes Fed. 719 (Oct. 31, 2022)
• Cashaw: Conflicting Duties And The Trust Fund Recovery Penalty, 177 Tax Notes Fed. 1257 (Nov. 28, 2022)
• The Rise of the Robotic Tax Analyst, 178 Tax Notes Fed. 57 (Jan. 2, 2023) 
• The Intersection Between Tax Credits And Trade Or Business, 178 Tax Notes Fed. 689 (Jan. 30, 2023)
• Relief of Innocent Spouses — Not So Podlucky, 178 Tax Notes Fed. 1339 (Feb. 27, 2023)
• Overcoming Accuracy-Related Penalties With Reasonable Cause, 178 Tax Notes Fed. 2145 (Mar. 27, 2023)
• Unbridled Losses: Harnessing Machine Learning for Tax Analysis, 179 Tax Notes Fed. 637 (Apr. 24, 2023)
• The Rise of Generative AI for Tax Research, 179 Tax Notes Fed. 1609 (May 29, 2023)
• Conflicting Duties And The Trust Fund Recovery Penalty In Cashaw 179 Tax Notes Fed. 2197 (June 26, 2023)
• The Ethics Of Generative AI In Tax Practice, 180 Tax Notes Fed. 785 (July 31, 2023)
• Implications Of The Legal Singularity For Tax Professionals, 180 Tax Notes Fed. 1455 (Aug. 28, 2023)