Bloomberg Law, Artificial Intelligence and the Future of Tax Law: A 3-part series:

Don’t Trust AI, Always Verify. Tax Law Still Needs Humans—Pt. 1:

Generative artificial intelligence is now embedded in tax practice, and that trend is unlikely to reverse. What has changed is the risk profile. Large language models generate fluent legal analysis through probabilistic text prediction rather than authoritative reasoning. In tax law, that distinction is consequential as the practice depends on hierarchical authority, technical precision, and a self-assessment regime grounded in verifiable sources. Hallucinated authority isn’t merely a drafting defect, but a substantive legal failure.

This article, the first of a two-part contribution, identifies two structural mismatches. First, probabilistic AI systems are epistemically incompatible with tax law’s demand for determinacy, particularly after the Supreme Court’s rejection of administrative deference in Loper Bright Enterprises v. Raimondo . …

Don’t Trust AI, Always Verify. Tax Law Still Needs Humans—Pt. 2:

Part 2 turns to the professional response. Because AI lacks agency, it must be treated as an instrumentality for tax practitioners rather than as a legal assistant, placing the burden of verification squarely on the attorney under the “non-delegable duty” standard articulated in United States v. Boyle . This article identifies a critical “privilege gap” where AI tools fail to qualify for Kovel protection, risking the waiver of attorney-client confidentiality, and concludes by proposing a governance framework—including judicial certification and revised Circular 230 standards—that mandates “human-in-the-loop” verification to preserve the integrity of the tax system.

In a post- Loper Bright environment, where the judiciary must interpret statutes without agency deference, the injection of hallucinated legislative history or case law is not merely a drafting error; it is a corruption of the record.

If AI cannot be trusted to self-regulate, the tax profession must regulate its use through liability rules, privilege safeguards, and governance protocols.

How AI Powers China’s Golden Tax System, Audits, Transfer Pricing:

China’s Golden Tax IV system, powered by Big Data and AI, is actively rewriting the rules of tax enforcement—intensifying audits with a precision that increasingly catches companies off guard. Compounding the pressure, the national fiscal deficit-to-GDP ratio in China has more than doubled over the past 12 years. In this high-stakes environment, companies must adopt more conservative tax policies while simultaneously strengthening their data science governance.

US multinationals began entering China more than three decades ago, benefiting for many years from tax incentives and relatively light tax enforcement. That fiscal environment has now decisively changed.

China’s fiscal pressures have intensified: The national deficit-to-GDP ratio has more than doubled over the past 12 years, while local governments are under growing strain. Against this backdrop, the 15th Five-Year Plan (2026–2030), with its emphasis on economic self-reliance and high-quality development, reinforces the broader policy rationale for stronger revenue collection. US multinationals should anticipate a marked increase in tax enforcement, driven in large part by the full implementation of Golden Tax IV system.

In the last 2 years, tax audits conducted in China have intensified and expanded into several new sectors. In addition to transfer pricing, tax authorities are increasingly scrutinizing the beneficial ownership status of overseas dividend recipients, reassessing companies’ eligibility for High and New Technology Enterprise status and its reduced tax rates, and examining companies’ claims for super deductions related to research and development expenses.

These enforcement trends will only accelerate during the current 15th Five-Year Plan (2026–2030), according to statements made at the National Tax Work Conference held by the State Taxation Administration, China’s national tax authority in Beijing on Jan. 28, 2026. At the conference, STA Director Hu Jinglin articulated the agency’s mission to “scientifically and precisely strengthen tax supervision and inspection,” establish a “full-chain, high-efficiency tax revenue governance system,” and “integrate the advancement of law-based taxation, data-driven taxation and strict taxation.” China State Taxation Administration, New Chapter in the Practice of Chinese Modern Taxation During the 15th Five-Year Plan Period .

Tax enforcement is increasingly data-driven, powered by the Golden Tax IV system. The system’s power doesn’t just come from technology, but from the state’s authority to mandate its universal adoption—a capability possible only in a command-and-control economy like China, where the state can create a “nationally unified database cutting across scores of government agencies” and demand real-time access to company data.

This means tax data isn’t siloed but can be cross-referenced with customs data (to verify import/export figures), banking data (to confirm cash flows), utility data (to check if a factory’s electricity usage matches its declared production), and even logistics data. This “360-degree view” is possible only because the state can compel all these various agencies and companies to share their data with tax authorities.

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