IRS plan to use AI may affect wealthy taxpayers. Here's how

If the Democrats would allow a change in the progressive tax code, this wouldn't be necessary. Flat tax everything. Everyone pays the same and eliminates the IRS completely. No more tax havens for the rich. Create a carve out for those that make less than some arbitrary amount to not soak the poor and run with it.
But instead, the lefties will use AI as a tool to target anyone who dares use the loopholes that they themselves created.

LTC Eugene Chu
..."“Right now, you file a tax return and you play the audit lottery,” said Robert Kovacev, tax controversy partner at law firm Miller & Chevalier. “But with AI, the data is constantly being interrogated by the algorithm.”

Once fully implemented, the newly enhanced technology is more likely to catch previously missed higher-end tax issues, he said.

They can expect increased scrutiny from the IRS over the next few years.

“They can expect increased scrutiny from the IRS over the next few years,” said Kovacev. The change won’t be immediate, but within three to five years, “there will be a noticeable increase in audits of large partnerships, large businesses and high-net-worth families,” he said.

Even if you’re not subject to increased IRS scrutiny, Kovacev said it’s “more important than ever” to stay organized with tax records, including receipts to support positions from past tax returns.

“Any taxpayer should be keeping their tax returns for at least seven years,” he said, noting that it can be difficult to “reinvent the wheel” for an audit when you haven’t kept a paper trail.

Typically, there’s a three-year statute of limitations for an IRS audit, with extensions in some cases, but there’s no time limit when the agency pursues fraud or nonfilers.

There’s IRS pressure to ‘show results’

While the technology may aid compliance efforts, the plan also presents risks for the agency, according to Mark Everson, a former IRS commissioner and current vice chairman at Alliantgroup.

“There’s obviously pressure on the administration to show results,” especially with the 2024 presidential election approaching amid continued scrutiny of the IRS funding.

“They’re going to press for getting those points on the board,” Everson said. “But at the same time, they can’t afford a big mistake here.” ...

The biggest challenges I see are the cost overruns and software that barely limps on. ML (machine learning) has been around for a decade or so. ML is just being rebranded as AI now that super large models are becoming somewhat stable. It's not new. The IRS was supposedly using ML years ago. The threat is more PR than reality. Which is sad. The ability to sort through 300 million individual tax returns as well as all the corporate tax returns should have been built a decade ago. The fact that they have to LIMIT it to <5% of all returns tells me they have no clue how to write, or use software.

Oh yeah - conservative pitch now - taxation is theft!