Should the IRS Be Using AI to Track Down Tax Evaders? Florida Doesn’t Think So

The U.S. Internal Revenue Service says it’s using artificial intelligence in expanded tax enforcement efforts.

IRS commissioner Danny Werfel describes the agency’s use of AI as part of “the start of a sweeping, historic effort” to hold the wealthy and those who abuse tax laws “accountable” for their taxes.

On a recent media call, Werfel said the IRS plans to use AI to find tax avoidance patterns by “large partnerships” and to” identify possible non-filers who hold millions in foreign bank accounts.”

“This new compliance push . . . makes good on the promise of the Inflation Reduction Act to ensure the IRS holds our wealthiest filers accountable to pay the full amount of what they owe,” Werfel said. “These are laws already on the books, passed by Congress, that the IRS hasn’t had the funding for many years to actively enforce. We can’t let that situation continue.”

While certain tax demographics may not appreciate an AI-driven and more aggressive IRS, they’re not alone. Consumer advocates and government watchdogs don’t think it’s a good idea, either.

At an October 13 IRS Roundtable in Naples, Florida Department of Financial Services chief financial officer Jimmy Patronis announced new legislation that would “identify state vendors who provide Artificial Intelligence services to the Internal Revenue Service as a means to fight back against the use of these technologies being corrupted by the IRS.” The legislation also has the support of Florida Rep. Senator Rick Scott, suggesting the U.S. Senate may back the same legislation on a nationwide level.

Patronis would likely support that scenario as his view of the IRS leveraging AI to target Americans offers more risk to the country than reward.

“The idea of the IRS using Artificial Intelligence to go after law-abiding taxpaying citizens is like something from a 1980s sci-fi horror movie,” he said at the roundtable. “My constitutional duty is to protect Floridians, so for the upcoming session we will propose legislation to survey all state vendors to assess whether they’re providing AI services to the IRS.”

A Path to Oversight

Patronis sees an opening the vendors who provide services to the federal government, as they also serve the State of Florida.

“That’s an opportunity to learn more on how we can fight back,” he notes. “To the degree we can identify who these vendors are, and get better details on the level of service they’re providing, the more effective we’ll be at reining in the IRS’s targeting of Florida.”

Scott, who spoke at the same conference, agrees with that sentiment.

“It’s no secret that Washington has weaponized the IRS against Americans,” he says. “The thought of 87,000 more IRS agents is terrifying. We will arm our small businesses with the tools they need to fight back.”

Statewide business leaders are also skeptical the IRS will use AI ethically and responsibly.

“To be a successful home builder, we’re constantly navigating the recent challenges of rising prices, scarce materials, and labor shortages,” said Al Zichella, past president of the Florida Home Builders Association and director of construction of Florida-based Prime Group. “The last thing we need is an IRS audit or an overly complicated tax filing to slow us down. Our Federal Government should help businesses, not hurt them.”

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