Lance Drury Law
Ste. Genevieve 573-883-3056
Columbia 573-886-8900
St. Louis 314-200-0003

Might AI someday be used in IRS tax evasion investigations?

There are many methods out there for trying to reduce tax liability. Some of these methods are perfectly legal. Others constitute illegal tax evasion.

When a person is accused of having committed actions that fall into the latter category, such as using an illegal tax shelter, they can face many things, including IRS investigations, possible sanctions and criminal charges. Thus, when a Missouri taxpayer has been accused of having engaged in tax evasion or is being investigated for possible tax evasion, having a skilled tax attorney's guidance can be vital.  

There are a wide range of methods the Internal Revenue Service uses to try to detect tax evasion. Might the use of artificial intelligence to search for illegal tax shelters one day be among these methods?

Computer scientists have been working on developing such an artificial intelligence program. For example, a recent study done by researchers from the Massachusetts Institute of Technology and the Mitre Corporation looked into developing computer algorithms based off of portions of the tax code, with the hope being that such algorithms could be used to help search for potential questionable corporate/partnership tax shelters.

In the study, researchers came up with an algorithm for helping spot potential instances of a type of questionable partnership tax shelter called "installment-sale bogus optional basis." 

Reportedly, the IRS has thus far made no comment on the study.

Do you think that, someday in the future, AI-based tax evasion investigation methods like those the study looked at will be used by the IRS as an investigative tool? How big of a risk do you think such AI-based programs would have of yielding "false positives" that could unnecessarily expose individuals, partnerships or corporations to additional IRS scrutiny? What impacts do you think AI-based tax evasion investigation methods would have on taxpayers overall?

Source: The New York Times, "Computer Scientists Wield Artificial Intelligence to Battle Tax Evasion," Lynnley Browning, Oct. 9, 2015

No Comments

Leave a comment
Comment Information

As Seen On

NBC ABC Fox News Channel USA Today BIO - The Biography Channel CBS
NBC ABC Fox News Channel USA Today BIO - The Biography Channel CBS

Schedule a No Obligation Tax Consultation

Contact us today and get relief from your tax burden. You can also receive a FREE chapter from the best-selling book, Protect and Defend, just by requesting it from the form below.

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

The Law Firm of Lance R. Drury
150 Merchant Street
(By Appointment)
Ste. Genevieve, MO 63670

Phone: 314-200-0003
Fax: 573-883-3095
Ste. Genevieve Law Office Map

Columbia Office
3610 Buttonwood Drive, Suite 200
(By Appointment)
Columbia, MO 65201

Phone: 314-200-0003
Phone: 573-886-8900
Fax: 573-886-8901

St. Louis Office
3636 South Geyer Road, Suite 100
(By Appointment)
St. Louis, MO 63127

Phone: 314-200-0003
Fax: 314-238-7201

Facebook Twitter You Tube Linked In Rss Feed
Review Us

Back to Top

"The choice of a lawyer is an important decision and should not be based solely upon advertisements."

- Lance

Privacy Policy | Business Development Solutions by FindLaw, part of Thomson Reuters.