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Is the IRS Spying on You with AI? House Judiciary Committee Opens an Investigation

Is the IRS Spying on You with AI? House Judiciary Committee Opens an Investigation

Mar 22, 2024

Is the IRS Spying on You with AI? House Judiciary Committee Opens an Investigation

The House Judiciary Committee, led by Chairman Jim Jordan (R-Ohio), has initiated an inquiry into the Internal Revenue Service's (IRS) use of artificial intelligence (AI) to monitor American taxpayers. Republicans on the committee expressed concerns over potential surveillance activities in letters addressed to Treasury Secretary Janet Yellen and Attorney General Merrick Garland, as revealed by a March 21 news release.

The investigation was spurred by a statement from IRS Commissioner Danny Werfel last year, indicating plans to leverage AI to identify potential tax evasion and streamline the processing of tax returns. However, Committee Republicans argue they "have reason to believe" that the IRS, in conjunction with the Department of Justice (DOJ), may be "actively monitoring millions of Americans’ private transactions, bank accounts, and related financial information—without any legal process—using an AI-powered system." They assert that such "warrantless financial surveillance is highly concerning" and casts doubt on the government's respect for civil liberties.

In September 2023, the IRS had issued a press release stating that AI would aid compliance teams in detecting tax cheating and improving case selection, thus reducing unnecessary audits. The Judiciary Committee's letters request further details on the AI program from both the Treasury and DOJ, without issuing subpoenas.

The Committee also plans to meet with IRS official Alex Mena, who allegedly discussed the AI system's surveillance capabilities on camera. Mena is quoted to have said that it is the DOJ and its inspector general, not the IRS, who control this AI surveillance system. The Committee raised alarms over this information, citing the IRS's "track record of targeting, harassing, and intimidating American taxpayers and journalists."

IRS Commissioner Daniel Werfel had previously elaborated on the agency's intention to use AI to audit large partnerships, claiming that the new tools would allow for better identification of income shielding. The IRS claims that the AI tools are designed to enhance tax compliance and avoid burdening taxpayers with unnecessary audits.

The Epoch Times reached out to the Treasury Department for comment on the investigation. Meanwhile, AI technology remains a contentious issue in Washington, with recent FCC actions banning AI in robo-calls and House Republicans proposing a bill to limit the IRS's use of AI, citing privacy concerns.

Rep. Clay Higgins (R-La.), a sponsor of the bill, emphasized the need to consider the constitutional implications of rapidly deploying AI technology. Tax expert James Creech from Baker Tilly voiced his reservations about the IRS's AI tools, highlighting the potential for maximizing enforcement to the detriment of understanding the technology's impact.

This ongoing investigation reflects the growing debate over the balance between technological advancements in government operations and the protection of individual freedoms. The potential future implications are significant, as they may influence the oversight of AI applications in federal agencies and the safeguarding of civil liberties.

Originally reported by The Epoch Times


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