The Impact of Machine Learning on Tax Law

Machine learning and artificial intelligence are terms that are often used as a synonym, but they refer to different things. In an interview with Tax Notes Federal, our CEO Benjamin Alarie discussed the impact of machine learning on tax law.

Source:  Tax Analysts

To understand this impact, we must first understand the assumptions that underpin academic and applied work.

The primary assumption of applying machine learning to tax law is that the law should be predictable and consistent. The rule of law presupposes that the law applies equally to all members of society, and every taxpayer should face the same set of tax rules, which should be applied consistently. Tax lawyers, accountants, and administrators are concerned with how the tax law will be interpreted and applied in specific situations.

This idea has a long legacy in jurisprudential thought, tracing back to Oliver Wendell Holmes Jr. in 1897. In his famous article "The Path of the Law," Holmes claimed that what individuals care about is how the law is going to be interpreted and applied in particular settings, and how the course of the power of the state can be brought to bear in particular instances. This is the idea that law is all about prediction.

Machine learning and artificial intelligence in law involve collecting raw materials such as rulings, cases, legislation, and regulations, and applying them to a particular problem. Blue J Tax synthesizes all of these materials to predict how a new situation would likely be decided by the courts. For example, we take all the cases from the tax court, circuit courts of appeal, and the Supreme Court on a particular topic and put them together in one place. Then, we create a model of how that legal issue operates by reverse-engineering the legal issue based on how the courts have decided similar matters in the past.

If you're a tax professional looking to take advantage of the benefits of machine learning in your practice, book a demo to see firsthand how it can improve your workflow and help you provide better service to your clients. With Blue J Tax, you'll have the power of AI at your fingertips to navigate the complexities of tax law with confidence and ease.

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