Taxes: how the tax authorities use artificial intelligence to fight against fraud

The tax administration increases each year its use of artificial intelligence to fight against fraud and improve the efficiency of its services. In 2021, the share of checks targeted by AI was 45%, compared to 32.5% a year earlier.

For the past few weeks, the teams of the Directorate General of Public Finances (DGFIP) have been familiarizing themselves with a new tool. Its name: Galaxy. Approved on March 11 by the National Commission for Computing and Liberties (Cnil), the use of this new computer software for the automated processing of taxpayer data should allow tax officials to better track down fraudsters.

Its deployment within the premises of the DGFIP is part of the PILAT project launched in 2018 to modernize the tax control system. L’decree of March 11 describes this new weapon in the fight against fraud as “a visualization tool, at the national level, on the one hand of the links existing between professional entities (links of participation), and between professional entities and natural persons (links of manager , partner or shareholder), and on the other hand, elements of context on the patrimonial and fiscal situation of these persons”.

Galaxie thus makes it possible to aggregate data such as the reference tax income, the identity of the spouse or even the tax obligations for individuals. But also the Siren number, the legal status, the category of turnover as well as the taxes and duties to which legal persons are subject.

The adoption of this new tool by the tax administration marks an additional step in the DGFIP’s desire to strengthen its digital arsenal to fight against fraud. More broadly, the service attached to Bercy set up the requests and valuation mission (MRV) several years ago, funded to the tune of 5.2 million euros over the period 2018-2022. Objective: to develop artificial intelligence and data mining techniques in the processing of tax data and better target controls and detect fraud profiles. Recently, an algorithm has enabled the tax authorities to mix and collect the information contained in the publications of Internet users on social networks, before processing them on a case-by-case basis.

45% of checks targeted by artificial intelligence

The DGFIP is pleased with the results of this 2.0 shift. In 2021, 13.4 billion euros in adjustments were notified to individuals and businesses and 10.7 billion euros were collected. A level close to the 2019 record (11 billion) which the tax administration attributes in large part to “the use of data mining to better target tax audits” while the share of audits targeted by artificial intelligence and data mining was nearly 45% last year, compared to 32.5% in 2020 and 21.95% in 2019. For 2022, it expects 50% of targeted checks thanks to AI.

The tax authorities do not hide their intention “to increase the use of artificial intelligence”. And not just to fight fraud. Since March 2021, the deployment of digital assistants “in the collection of fines has made it possible to automatically process the accounting posting of bank transfers received, and to agents to improve the results of forced collection thanks to the intensification of prosecutions”, explains the DGFIP.

Also in 2021, the tax administration began to use artificial intelligence to “help contact center agents respond to user emails about payment difficulties”. It has also implemented the “Weak signals” project, which is based on an algorithm capable of “targeting the weaknesses of companies in order to set up support actions as early as possible”. This system made it possible to detect 23,227 companies in difficulty. Of these, 11,952 were selected to be contacted and offered support.

Detect swimming pools

In the experimental phase, the DGFIP’s “Innovative Land” project aims to use artificial intelligence to automatically detect buildings and swimming pools that have not been declared from aerial views. Problem, the device tested in nine departments would not really be developed, with error rates of 30% at this stage.

The tool would identify, for example, taxable swimming pools when they are above-ground swimming pools not subject to tax. The unions also report situations in which artificial intelligence sees “buildings to be taxed instead of tarpaulins, roads, sidewalks, parking lots, slabs”, indicated to the Parisian Frédéric Scalbert, representative of the CGT.

Unions that are mixed on the results of artificial intelligence in the fight against tax evasion. A report by Attac and Solidaires supported by the CGT notably underlined that if this “tool is interesting”, it “has not yet given all the expected results. And as has always been the case within the administration tax, the public authorities hastened to cut jobs, arguing that “digital would do better…”. At nearly 105,000 in 2017, the DGFIP workforce was 94,669 in 2021.

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Taxes: how the tax authorities use artificial intelligence to fight against fraud

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