Balancing innovation and integrity: AI in tax administration and taxpayer rights

Abstract Artificial intelligence (AI) is transforming tax administration by improving efficiency, compliance, and decision-making. However, this shift raises critical concerns about transparency, accountability, and taxpayer rights. This paper examines how AI-driven systems impact legal fairness, due process, and the integrity of tax procedures. It highlights risks such as algorithmic bias, opacity, and weakened procedural safeguards, while acknowledging AI’s potential to streamline enforcement. To safeguard taxpayer rights, the paper proposes an independent AI oversight mechanism to explain and review tax decisions. This system would enhance transparency, reinforce trust, and ensure legal accountability. The paper calls for regulatory frameworks that embed oversight, uphold public trust, and balance innovation with fundamental legal protections.