IRS Has Some Tough Questions To Answer About AI Scams

Several senators have signed a letter to the IRS demanding action be taken on the issue of AI being used in scams targeting people and tax professionals.

The letter was written to urge the IRS to warn taxpayers and tax professionals about tax fraud and offer guidance on avoiding becoming a victim.

The Senators cited a report where a threat intelligence manager at a cybersecurity firm had asked ChatGPT to create a sample malware-infected tax fraud email. 

It was too good.

The final product was an error-free email regarding the Employee Retention Credit requesting the recipient’s EIN, payroll information, and a list of employees and their SSNs.

Concerned, four senators, Maggie Hassan (D), Chuck Grassley (R, James Lankford (R), and Ron Wyden (D), wrote a letter to Danny Werfel, the IRS commissioner, warning about the use of artificial intelligence technology, specifically ChatGPT, to generate convincing, personalized scams designed to rob Americans by gaining access to their financial information. 

According to the Senators, it was easy to identify previous scam emails during earlier tax filing seasons due to their numerous typos, poor grammar, and incorrect tax law citations. However, tax frauds created by modern AI technologies are expertly written and designed to fool naive people, as the author explains. These taxpayers are more susceptible to being duped by such methods.

In another alarming example, when asked for an example call that could be used to educate older people on tax fraud, ChatGPT provided a transcript of a call between a con artist impersonating an IRS official and a senior citizen, in which the con artist attempted to coerce the senior citizen into paying a fictitious tax debt.  

Senators questioned Werfel about the Internal Revenue Service’s preparedness for the rise in fraud that may emerge from emerging artificial intelligence technology like deep fakes and chatbots like ChatGPT. 

No deadline was specified in the senators’ May 1, 2023 letter, but they expressed anticipation of hearing back.