Blue J: Using Machine Learning To Crack The Tax Code

Benjamin Alarie (Osler Chair in Business Law, University of Toronto; CEO, Blue J Legal) & Xue Griffin (Senior Legal Research Associate, Blue J Legal), Using Machine Learning to Crack the Tax Code, 174 Tax Notes Fed. 661 (Jan. 31, 2022):

In this article, Alarie and Griffin review Blue J’s machine-learning predictions from the past year and reflect on the state of the technology of tax prediction.

Conclusion
Even though the strong forms of AI that approach human-level intelligence — AGI — are likely to be decades away, tax practitioners are increasingly able to leverage ML models that provide valuable insight into hidden patterns that will allow them to “crack the code.”

Throughout 2022, we look forward to using ML models to elucidate the hidden, surprising, and often controversial patterns in the case law to show how using data-backed machine-learning models is the newest tool in a sophisticated tax practitioner’s toolbox.

Prior TaxProf Blog coverage:

• Blue J Predicts: An Unprofitable Pretax Venture Can Still Be A Partnership (June 29, 2021)
• Blue J Predicts With 68% Confidence That IRS's Economic Substance Challenge Will Fail In District Court Perrigo Case (Aug. 6, 2021)
• Blue J Predicts With 77% Confidence That Reserve’s § 501(c)(15) Appeal Will Be Dismissed By The Tenth Circuit (Sept. 10, 2021)
• Blue J Predicted With 95% Confidence That 7th Circuit Would Affirm Tax Court In Innocent Spouse Cases (Oct. 5, 2021)
• Blue J Predicts With 74% Confidence That 8th Circuit Will Find Customary/Usual Management Fees Are Deductible Under § 162 (Nov. 3, 2021)
• Blue J Predicts: Taxpayers Face Uphill Battle In Assignment Of Income Cases (Dec. 8, 2021)
• Blue J Predicts: Worker Classification In The Gig Economy (Dec. 20, 2021)