The Internal Revenue Service has been working on a custom tool to help identify potential tax discrepancies and streamline its audit process. The tool, dubbed the Selection and Analytic Platform, or SNAP, was developed by Palantir at a cost of $1.8 million. The IRS currently uses over 100 business systems and 700 methods to select cases for audits, but this fragmented approach has led to inefficiencies and poor case selection.
The agency has been using Palantir's technology since 2014 and has awarded the company over $200 million in contracts. The IRS is now interested in deepening its relationship with Palantir and modernizing its software. SNAP is designed to analyze unstructured data from supporting documents and identify key information about contracts, vehicles, and vendors.
The pilot program is currently underway, but it's unclear how long Palantir has been working on SNAP. The tool is expected to help human auditors identify red flags in tax filings that might have otherwise been missed. The IRS has asked Palantir to craft three case selection methods related to specific parts of the tax code.
The development of SNAP highlights the need for tax authorities to stay up-to-date with technology and adapt to changing tax laws. As tax laws become more complex, tax authorities must find ways to efficiently identify potential discrepancies and reduce the burden on taxpayers.
The development of SNAP raises questions about the use of artificial intelligence in tax collection. If Palantir's tool can effectively identify potential tax discrepancies, it could lead to more efficient audits and reduced tax evasion. However, it also raises concerns about the potential for bias in the system and the impact on individual taxpayers. As tax authorities continue to modernize their software, it's essential to ensure that these systems are transparent and fair.
