The Internal Revenue Service is inaugurating a strategy involving Artificial Intelligence, AI, and boosted technology, to track approximately 1600 millionaires and 75 large business partnerships who the Service believes owe hundreds of millions of dollars in back taxes, penalties, and interest. Commissioner Daniel Werfel made the announcement on September 3rd and announced that with an increase in funding for the agency, and the help of AI tools, the Service has a new means of pursuing those who cut corners on their taxes.
According to Werfel, the unnamed individuals on average owe at least $250,000 each in back taxes. The large partnerships own assets of roughly $10 billion in assets. The Service reiterated its promise not to increase scrutiny for taxpayers earning less than $400,000 a year. If you pay your taxes on time, it should be particularly frustrating when you see that wealthy filers are not, exclaimed Werfel.
A massive hiring effort for qualified employees and private contractors is under way with a major emphasis on increasing the human resources necessary to develop and implement powerful AI research tools. The resulting boosted technology is expected to aid IRS analysts in discovering patterns and trends that were not obvious before.
Although the current effort is directed toward the very wealthy, there are concerns of potential misuse, or that the new technology will unjustly increase scrutiny on all taxpayers — the compliant as well as the rogues. As a result, there is mounting bipartisan support in Congress for increased accountability and oversight. The direction that information technology is moving will certainly bring pressure upon the delicate balance between the need for tax compliance, and the right to personal privacy.
It’s going to be a very busy fall for us, admitted Werfel. The enhanced tax collection effort began in October.
Karla morales, cpa