State tax agencies embrace generative AI to enhance operations

In recent discussions, Ryan Minnick from the Federation of Tax Administrators provided insights into how state tax agencies are incorporating artificial intelligence technologies, including generative AI. During a podcast episode of Tax Notes Talk, it was highlighted that the FTA has been actively working on training and resource allocation for various state tax departments. Given the growing curiosity around AI, the FTA has collaborated with private sector groups to present practical applications of these technologies for governmental use. The podcast emphasized the need for education on terminologies and the distinctions between generative AI and older technologies such as machine learning. Minnick underlined the importance of making this knowledge accessible to both executive and technology stakeholders within tax agencies. As the FTA prepares to release its upcoming white paper on generative AI, it aims to empower agencies to better understand and utilize these emerging technologies effectively in their operations. Furthermore, the discussion touched upon the evolution of AI in the context of government work, where tax agencies are encouraged to leverage innovations to enhance their services. A pivotal aspect of this transformation involves upskilling current employees to familiarize them with generative AI tools, as many are encountering such technologies for the first time mid-career. In contrast, newer employees are expected to possess a native understanding of these advancements, which could create a disparity in usability within agencies. The urgency of adapting to these technologies is underscored by the necessity to remain transparent while protecting sensitive information from potential threats posed by fraudsters utilizing data from the dark web. Minnick remarked on the shifting landscape of AI within tax administration and expressed a desire for more precise queries in future survey contexts to better gauge agency needs and insights. The overall conclusion from these discussions indicates a significant trend towards integrating generative AI in tax administration to improve efficiency and service delivery.