e-Government and tax accountability

Summary

Tax authorities in common law countries such as Australia are increasingly digitising and automating their tax compliance activities and taxpayer service interactions. The move is rapid and multi-faceted extending to core functions including tax compliance and investigation activities. However, this increasing reliance on digitisation, automation and artificial intelligence raises fundamental questions concerning tax authority accountability and the ability of taxpayers to exercise their rights to take legal action in the event of defective exercises of tax authority powers. These questions have to date garnered little attention in the evaluation of the merits, efficiencies and goals of the push to digitise and automate. This project considers these questions and posits that the answers indicate the need to rethink a range of legal and public policy principles underpinning the limits of tax authority susceptibility to taxpayer suit and give rise to a number of new legal controversies that are likely to gain increasing prominence in a ‘digital by default’ tax administration world.

Researcher

Project background and aims

Tax authorities in common law countries including Australia, Canada, the UK, the United States and New Zealand have all committed strategically to interacting with taxpayers in a digital by default mode and are working apace to achieve these objectives. For example, the UK HRMC claims to have applied robotics and AI to assist in over 15 million tax administration functions in the last two years alone. The ‘digital by default’ tax administration push has, in part, been driven by economic constraints and the presumption that emerging electronic tools for interacting with taxpayers and carrying out core tax compliance monitoring functions are more cost effective than their traditional counterparts.

Whilst commentary and statistics touting the efficiencies and benefits of the widescale transition to digitised and automated tax administration functions are plentiful, detailed investigations into the effect the transition to this new digital by default tax administration frontier might have on previously well-established legal principles and theories concerning the trade-off between taxpayer rights and tax authority accountability are comparatively rare. In particular, there has been no discussion of the question of the extent to which the shift to more automated digitised means of interacting with taxpayers warrants revisiting the boundaries of immunity from suit traditionally afforded to tax officials and tax authorities and the public policy concerns which underly the setting of those limits. Redressing this ostensible oversight is the primary focus of this project.

Methodology

The project will apply doctrinal legal research methods to provide a systematic exposition of the rules governing tax authority accountability in cases of defective administration and the effects of digitisation on the future development and application of those rules. This will require substantial ‘black letter’; (or literal) analysis of formal legal rules and principles (essentially the project ‘data’) and the application of deductive legal reasoning to develop arguments and reasoning based on the law (including both legislation and case law). The research will extend to multiple key common law jurisdictions including Canada, the United States, the United Kingdom, New Zealand and Australia.