AI Tracks Hidden Income

The American Tax Service (IRS) announced that it will be implementing artificial intelligence tools to help identify tax fraud and combat tax evasion. The primary focus of this initiative will be on wealthy individuals who use complex schemes to avoid their civil tax obligations.

According to the IRS, the introduction of a neural network will enable them to flag individuals with a total income of more than $1 million and debts exceeding $250,000. This implementation will not only aid in the identification of tax fraud but also help determine new threats and improve the audit process. More details about this development can be found on the IRS website.

Individuals with an income of less than $400,000 per year can expect the frequency of inspections to remain unchanged, as per the IRS. However, AI technology will be utilized for auditing the 75 largest partnerships in the United States, which have an average asset value exceeding $10 billion.

The IRS will be closely scrutinizing hedge funds, investment partnerships in the real estate sector, and law firms. Approximately 1,600 individuals will be targeted for this enhanced level of scrutiny.

Daniel Verfel, the IRS Commissioner, stated during a press conference, “The new tools will help us identify patterns and trends that were previously inaccessible.” He reassured the public that audits for the middle and low-income classes will not be affected by these changes.

The introduction of this technology coincides with the recent hiring of almost 90,000 new employees by the IRS. This expansion was made possible after the agency was allocated $80 billion to fulfill the requirements of the law on reducing inflation.

/Reports, release notes, official announcements.