Tech is Changing Tax Law. BU Law’s GTP Has You Covered.
Photo by André François McKenzie on Unsplash
Tech is Changing Tax Law. BU Law’s GTP Has You Covered.
If you’ve filed your own taxes using an online software program that seamlessly integrates your wage and salary information, you’ve benefitted from technology’s growing impact on tax law and tax collection. If you get audited in the future, technology may be behind that too. Taxes have always been one of life’s unavoidable certainties, but that doesn’t mean the annual exercise isn’t constantly evolving.
When Boston University School of Law Graduate Tax Program Director Christina Rice (JD’07, LLM’13) was in practice at one of the world’s largest accounting firms, she heard the message loud and clear:
“Technology, technology, technology,” she recalls of her time at EY, which she joined while completing her LLM in Taxation at BU Law. “The Big 4 accounting firms are doubling down on their efforts to figure out ways to use technology to make the work that they currently do more efficient and more accurate.”
Examples include outsourcing document review to algorithms, using software to transfer client data, and relying on machine learning to match individual transactions to state and local tax codes. The Internal Revenue Service is also seeking to improve its efficiency with technology. In 2018, the federal agency requested information about AI and machine-based cybersecurity protection and the use of social media to better resolve existing compliance cases.
When Rice accepted her current position in 2017, she decided to make technology a core feature of the Graduate Tax Program (GTP). That has meant offering students not just training in the practical skills they need to practice today but also the opportunity to analyze and engage with the tools and technologies being developed for the future.
In recent years, GTP has added several new courses, including Tax and Technology, which explores tax solutions being developed by private companies and governments and gives students the exclusive opportunity to use the software of multi-national corporations; and Transfer Pricing Practice Tools, which gives students access to the software used for calculating the cost of goods and services provided among entities owned by the same parent company.
Such classes explore the ways technology is changing the practice of tax law and the accompanying ethical concerns, including data privacy: In 2016 and 2017, the IRS, which safeguards taxpayer information, thwarted 2.1 billion cyber access attempts. Another concern is technological bias. If algorithms dictate enforcement priorities, how can we be sure the technology isn’t unfairly targeting certain groups?
“The thing about AI is that it’s teaching itself,” Rice says. “You can’t see what it’s doing, so there is some concern that the AI might be applying discriminatory practices.”
GTP also covers how tax law treats new technologies. For the 2019–20 academic year, for instance, the program has launched a new course called Taxation and Regulation of Cryptocurrency. Designed to provide an introductory understanding of the theory and principles governing digital currencies, the course is taught by two practitioners with expertise in the area: Lecturers John A. Beccia III and Robert Bench, the former general counsel and associate general counsel, respectively, at Circle Internet Financial, a company that allows its customers to use, trade, invest in, and raise capital with open crypto technologies.
Bench, who also spoke about the taxation of cryptocurrency at the 2018 LLM Reunion Weekend, says the new course will include an introduction to cryptocurrencies and blockchain technology, with an emphasis on real-world applications; an examination of the relevant regulatory framework; and an in-depth look at the taxation of such technology.
Part of what makes the cryptocurrency field so exciting—and ripe for study—is that the law surrounding it is in a state of flux. The IRS hasn’t updated its guidance on crypto since 2014, and courts haven’t had many opportunities to weigh in yet.
We want our students to have an advantage over people who’ve been practicing for several years, to have learned about the next evolution of tax law so they can be part of those conversations and eventually be the people who are leading those conversations.
“You have to be really thoughtful about being a legal practitioner in this space, to use examples from other areas of regulation to try to build best practices in the absence of case law,” says Bench.
Bench and Beccia bring rare practical experience to the classroom: Beccia now runs a Washington, DC-based advisory firm focused on cryptocurrency and other fintech matters, and Bench is director of applied fintech research and payment strategies at the Federal Reserve Bank of Boston. But they’re also excited to learn from their students.
“I really want to hear their perspective, particularly the international students,” says Bench, noting that the use of cryptocurrency is more widespread abroad.
Rice says other new courses are in the works. Next spring, GTP will offer a course on how technology can help prevent tax fraud with Adjunct Professor Richard T. Ainsworth, who has written extensively about blockchain applications to tax compliance and so-called anti-zapper laws, which combat sales suppression fraud.
Also in the spring, Rice, who has for several years led Microsoft Excel skills training sessions for her students, hopes to unveil a technology boot camp covering more advanced tools, including Microsoft’s Power Bi, which helps companies visually analyze vast amounts of data. In the future, she hopes to make coding courses available to GTP students.
“We want our students to have an advantage over people who’ve been practicing for several years, to have learned about the next evolution of tax law so they can be part of those conversations and eventually be the people who are leading those conversations,” Rice says.
