Benjamin Alarie (Osler Chair in Business Law, University of Toronto; CEO, Blue J Legal), AI and the Future of Tax Avoidance, 181 Tax Notes Fed. 1809 (Dec. 4, 2023):

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.

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)
• Automated Tax Planning: Who’s Liable When AI Gets It Wrong?, 180 Tax Notes Fed. 2297 (Sept. 25, 2023)
• Will AI Replace Tax Practitioners?, 181 Tax Notes Fed. 855 (Oct. 30, 2023)