Artificial intelligence presents countless uses and pitfalls for law and tax. The technology has developed at a steady pace, and we have watched its every step. Today’s GPT-4 is a new 1000-horsepower hypercar—Bloomberg reported on the AI Model T back in 2022.
France’s tax authority trained an early AI application to review satellite images and find undeclared, and thus untaxed, swimming pools. Such a method plays to AI’s strength perfectly—using machine learning to automate a discrete process that would otherwise be cost-prohibitive. While niche, this model demonstrated AI’s future as a commonplace tool. Back then, it was hard to see how integral AI would become to everyday work.
True technological revolutions are rare, as most progress is iterative. The good news is that a gradual progression helps close observers see big changes coming as they crest on the horizon. This is as true in technology as it is in tax policy, where a fringe proposal can become law following shifting political winds and multiple versions.
Here at Bloomberg Tax, we are the close observers. We strive to get our readers the little tax story that predates the big tax story—the AI swimming pool detectors that foretell ChatGPT giving tax advice. Tax is a substantial beat that’s equal parts law, accounting, technology, and policy—but we’ve got our arms around it.
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—Andrew Leahey
Look for Leahey’s column on Bloomberg Tax, and follow him on Mastodon at @[email protected].
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State Insights
The Multistate Tax Commission should get technical input from IT professionals and software developers so it can make accurate legal definitions for digital products and services, says attorney Kelvin M. Lawrence.
Federal Insights
A tax strategy using charitable remainder annuity trusts to avoid federal income taxes on property sales has legally collapsed and should be avoided at all costs, says attorney Richard L. Fox.
Accountants can address the shortage of young talent in the field by embracing new technology, committing to diversity, and investing in mentorship, says Jeremy Sulzmann, vice president of the QuickBooks partners segment at Intuit.
Global Insights
Tax professional Virginia La Torre Jeker and Esquire Group’s Jimmy Sexton look at how US taxpayers with Maltese retirement plans can take corrective measures to stay compliant with the IRS.
Kamales Lardi of Lardi & Partner Consulting looks at the EU’s proposed legislation for AI systems and assesses the potential impact for companies located in or serving the EU market.
Multinationals that own holding companies registered in EU member states should assess whether they meet the third Anti-Tax Avoidance Directive’s physical presence standards before the directive takes effect, says Plante Moran’s Bill Henson.
Chris Morgan and Becky Knight of KPMG offer perspective into the evolving transparency issues that most concern business investors, and how businesses should respond to the challenges.
Tom Davey of Factor Risk Management argues that recent UK tax cases involving prominent high-net-worth individuals have shown that the role of insolvency practitioners is vital in ensuring a fair business environment in the UK.
Commentary
The IRS funding reduction included in the recent debt ceiling deal will deprive the agency of necessary resources while increasing the federal deficit, says Janet Holtzblatt, senior fellow at the Urban-Brookings Tax Policy Center.
Columnists
A lawyer’s recent use of ChatGPT to erroneously draft the bulk of a court brief offers a warning—and not just for the legal tech world. Andrew Leahey illustrates why tax practitioners should be wary of how they use AI language models in their everyday work.
Save the Date
Many introverts looking to advance their career may find networking events challenging—or even terrifying. For answers on how to leverage these events and make contacts, join Bloomberg Tax and Bloomberg Law Insights & Commentary teams on June 21 from noon to 1 p.m. ET for How Introverts Can Build a Phenomenal Business Network, part of our free virtual Lunch & Learn series.
Communications executive and entrepreneur Morra Aarons-Mele will have tips about how introverts can use their strengths to get the most out of conferences and happy hours while acknowledging their personal boundaries.
Career Moves
Michael Connelly has been promoted to equity principal at accounting and tax firm Dark Horse CPAs.
Barclay Taylor and William Stone have joined the newly launched tax controversy practice at Morris Manning & Martin as of counsel and associate, respectively, in Atlanta.
Heather Behrend has joined Vinson & Elkins’ tax practice as counsel in the New York office.
Matthew Greene has joined Stewarts as a partner in the tax litigation and resolution department in London.
David Goldstein has joined Farrell Fritz as a partner in the trust and estates practice in New York.
If you are changing jobs or being promoted, let us know. You can email your submission to [email protected] for consideration.
Spotlight
This week’s Spotlight is on Andrew Hunzicker, the founder and chief executive officer of Dope CFO, a cannabis accounting and tax education business in Oregon. Hunzicker has more than 30 years of experience as a tax professional and business founder.
News Roundup
It’s been another busy week in tax news from state capitals to Washington. Here are some stories you might have missed from our Bloomberg Tax news team.
*Note: Your Bloomberg Tax login will be required to access Tax News.
- Taxes on cryptocurrency trading are contributing more to government coffers, but the available evidence suggests that most digital asset investors are ignoring their legal obligations to pay up.
- Netflix Inc., Hulu LLC, and other streaming services on Tuesday scored another chance to convince a trial court to toss a class action filed by Indiana cities seeking millions in local franchise fees.
- The US Supreme Court declined to wade into a dispute between Ohio and the Treasury Department over federal limits on tax cuts tied to the $5.4 billion the state received in pandemic relief funds.
- The IRS disrupted the name, image, and likeness industry by releasing a memo saying many organizations that fund college athletes no longer will be considered charitable.
The Hulu logo on a laptop computer arranged in New York on Nov. 18, 2020.
Photographer: Gabby Jones/Bloomberg via Getty Images
Our Wish List
For June, we’d welcome thoughtful pieces on graduates, including what tax advisers are telling their clients who are just starting out in the workplace and tax-favored strategies related to paying for higher education. We’re also looking for tax pieces focused on travel and tourism. Specifically, we’d love to see how advisers and planners suggest taxpayers maximize tax benefits for vacation and rental homes.
If you have an interesting, never-published article for publication, you can contact our Insights team by email at [email protected].
Our Team
We talk about tax a lot. But there’s much more that you might hear us talking about if you popped into one of our Teams meetings. Here’s a quick look at what some of us are watching, reading, and listening to this week.
Watching:
Andrew Leahey (Columnist): Baseball is very exciting at the moment. The Yankees and Mets had an epic Subway Series, and Luis Arráez of the Miami Marlins is trying to do something no player since Ted Williams has accomplished: bat above .400 for a season.
Reading:
Daniel Xu (Content Editor): I’ve started reading “We Were Dreamers” by Simu Liu. He’s quite young to have already published an autobiography, but I’m interested in his perspective on breaking into Hollywood as an Asian Canadian actor.
Listening:
Melanie Cohen (Content Editor): I’m on a Smokey Robinson kick after listening to his recent podcast interview with Marc Maron. The man is a lyrical genius!
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We also have a growing LinkedIn group where our authors, contributors, and readers can share tax-related stories and exchange ideas. We hope you’ll join the conversation!