Four Tax Questions For ChatGPT And Other Language Models

Libin Zhang (Fried Frank, New York), Four Tax Questions for ChatGPT and Other Language Models, 179 Tax Notes Fed. 969 (May 8, 2023):

Since ChatGPT was released to the public in late 2022, it and other language models have rapidly gained recognition for their ability to respond to queries with natural language text. This article tests the usefulness of three language models, ChatGPT, Bing Chat, and Google Bard, by asking each four tax-related questions:

1. Can I engage in a section 1031 like-kind exchange if I sell my Picasso painting?
2. Does a decedent recognize gain if she dies with assets that have debt in excess of tax basis?
3. Why should the federal government tax stock buybacks?
4. Can you tell me six original jokes about tax lawyers?

The current iterations of language models have some room for improvement before they are useful to tax professionals. It may take several more years before language models can supersede junior tax associates in performing tax research, even if they are cheaper and more responsive.

In contrast, the language models can more easily handle open-ended questions with lower stakes and no definitive right or wrong answers such as providing recipes, travel suggestions, or tax policy commentary. Once the language models have implemented more advanced footnote technology, they may serve as a cost-effective supplement for legal academics.