Curated by Daniel Xu
Thinking of asking an artificial intelligence chatbot for tax advice? Maybe that will be a good idea someday, but that day isn’t today.
When thinking of general use chatbots such as those offered by OpenAI Inc. and Alphabet Inc., you can ask them yourself and they’ll tell you—they aren’t qualified to give you tax advice and you should always consult with a qualified tax adviser or attorney.
Even purpose-built AI assistants shouldn’t be relied on to provide accurate information, as the base language models many of them are built on continue to struggle with so-called hallucinations, a fancy way to say they sometimes just make stuff up. They struggle to integrate new information and often have arbitrary cutoff dates in terms of their knowledge. That’s a frightening prospect when it comes to tax compliance.
There is also the ever-present danger of sharing private financial information with what amounts to a stranger in a chat room—that stranger being an AI model doesn’t preclude your data leaking out to nefarious actors of the skin-and-bone variety.
In defense of the AI assistants, they are just about all being billed as still in development. And that may be the caveat we’ll get used to accepting with all such AI tools—permanent beta status.
AI tools are readily available, purpose-built for nearly every use case, but it’s important to remember some may never become “stable releases.” This frees the providers from any responsibility for the accuracy of the information provided by their models. After all, they’re works in progress, right?
So, before you entrust your financial future to the latest cutting-edge technology, consider the simple wisdom of a coin toss—or talking to a human tax professional.
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—Andrew Leahey
Look for Leahey’s column on Bloomberg Tax, and follow him on Mastodon at @andrew@esq.social
State Insights
ABFinWright’s Rachel Wright, Abraham Finberg, and Simon Menkes say Missouri’s two cases on cannabis “tax stacking” show how the practice drives consumers to the illicit marketplace.
EY’s Martin Rule says employers should create a compliance and risk management committee to tackle tax and legal risks of allowing employees to work remotely.
Federal Insights
Stout’s Keri Johnson highlights common reporting challenges for oil and gas firms that complete mergers or acquisitions and suggests ways to adhere to best practices.
Steptoe’s Steve Dixon and Amanda Pedvin Varma argue that US subsidiaries of multinational enterprises should push back on IRS transfer pricing adjustments made based on consideration of implicit support.
Becker’s Michael Burwick says potential complications of proposed IRS regulations on installment sales would require certain advisers to file disclosures.
Tifphani White-King of Mazars says empowering growth and reshaping perceptions of women in the accounting industry will create a more equitable environment.
Fringe Professional Development’s Katie Aldrich explains how a mindset of continual growth and adaptability can attorneys succeed as they move from associate to partner.
Sunu Chandy and Skye Perryman of Democracy Forward propose what companies can do to navigate resistance to diversity, equity, and inclusion programs.
Global Insights
Colin Biggers & Paisley’s Amy Liu analyzes how Australian businesses should respond to ongoing transfer pricing litigation and anti-tax avoidance proposals, emphasizing active documentation and robust processes.
The Tax Foundation’s Alan Cole says the UN should prioritize harmonization, reducing complexity, and cross-border investment to increase international tax cooperation.
Pinsent Masons’ Robert Dever says the OECD’s final Amount B report highlights the Inclusive Framework on BEPS’ progress on transfer pricing—but plenty of work still remains.
Columnist Corner
State revenue departments could enhance efforts to combat sales tax evasion by publicly listing problematic point-of-sale systems that facilitate it, Andrew Leahey writes in his Technically Speaking column. Adopting this transparent approach would help state revenue departments “build a foundation of trust with the broader business community,” as companies would benefit from the increased guidance, Leahey says.
Career Moves
Former IRS Commissioner Chuck Rettig is joining law firm Chamberlain Hrdlicka.
Rob Clary has joined Baker McKenzie as a partner with the tax practice in Chicago.
Tax lawyer Elie Zolty will join Kirkland & Ellis as a partner.
Mark Miller has joined the tax, executive compensation, and benefits practice at Holland & Knight as a partner in Nashville.
George McCormick has joined BakerHostetler as a partner in the tax practice group and member of the private wealth planning team in the New York office.
Carlos Renato Vieira has been appointed to tax partner at TozziniFreire Advogados, a full-service firm in Brazil.
Robert Fitzgerald has been appointed a tax partner at Grant Thornton in Ireland.
If you’re changing jobs or being promoted, email your submission to TaxMoves@bloombergindustry.com for consideration.
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 (login required).
- A federal court in Alabama has ruled that a law requiring companies to report extensive stakeholder ownership information to the government is unconstitutional.
- The state court system can’t assess whether a city imposed an illegal tax on water services outside of its boundaries because this item isn’t required to be negotiated under service agreements, the Georgia Supreme Court ruled.
- Senate Republicans are digging their heels in on demands for changes to the $78 billion tax package currently stuck in the chamber, and some say they might get a better deal if they wait another year.
- The UK proposed a variety of tax breaks for small businesses in its Spring 2024 budget, along with plans to curb tax avoidance, implement reporting rules for crypto assets, and new measures to regulate tax advisers.
Tax Journals
(Bloomberg Tax login required)
Tax Management International Journal
Changes to the statuses of the US-Chile Treaty and US-Hungary Treaty could have substantial Foreign Account Tax Compliance Act implications for withholding agents, foreign financial institutions, and their counterparties, Carson Le of KPMG says.
Tax Management Memorandum
If you can cut through Social Security’s complex rules and the misinformation that abounds, you can expand this entitlement beyond just a basic benefit into a top source of retirement income, certified adviser Ash Ahluwalia says.
Employee benefit plan managers and fiduciaries who may trade assets between accounts under their control need to know how Employee Retirement Income Security Act rules may apply, Michael Schloss of the Wagner Law Group says.
Our Team
We talk about tax a lot. But you would hear much more 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): My wife and I have been rewatching the NBC show “Hannibal” that ran from 2013 to 2015.
Reading
Jessie Kamens (Editor-at-Large): “Crying in H Mart,” a memoir that illustrates how our cultural foods are one of the great glues in life, providing connection and the power to travel back to past experiences.
Listening
Melanie Cohen (Content Editor): Sanulrim, an influential Korean rock band active in the 1970s and ‘80s.
Stay Connected
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