"The IRS has long attempted to aid wary taxpayers by publishing informal guidance that translates tax laws into more understandable statements. In previous work, Professors Joshua Blank and Leigh Osofsky have argued that such plain language guidance often oversimplifies complicated tax laws, opening the door to errors. They have called this characteristic “simplexity.” In their newest article on the subject, Blank and Osofsky identify another—potentially more serious—example of tax guidance that reflects simplexity: automated legal calculators like the IRS’s Interactive Tax Assistant.

"In the context of tax compliance, legal calculators are essentially algorithmically programmed, automated tax advisors that perform mathematical calculations and attempt to calculate taxpayers’ legal consequences. It sounds technical, but anyone who has ever used TurboTax is familiar with the basic concept. The legal calculator “asks” the user questions about their profile and economic activities, and then it generates advice about what income might be taxable, what deductions or credits may be available, whether it makes sense for a taxpayer to itemize, and so forth.

"While TurboTax online has been around since 1999, the IRS is a relative newcomer to the automated tax assistance scene, introducing its Interactive Tax Assistant in 2011. If there is a risk that taxpayers may place too much trust in the advice generated by private market legal calculators, then it stands to reason that the risk is even higher when the legal calculator is provided by the IRS itself. For me, this basic intuition is what makes the authors’ findings so immediately concerning."

Layser goes on to identify the various issues with automated tax assistance, and recommends the article to any tax scholar interested in tax compliance, tax procedure, or artificial intelligence and taxation.

Read the full review.