• Florida Chief Financial Officer Jimmy Patronis and U.S. Senator Rick Scott hosted a roundtable event targeting the Internal Revenue Service (IRS) and AI service vendors used by the IRS.
• Patronis presented forthcoming legislation aimed at auditing and identifying state vendors providing AI services to the IRS to combat the potential misuse of technology.
• Per reports, the IRS has been employing AI services to investigate tax evasion, particularly among high-income taxpayers using digital assets, as part of its efforts to increase tax revenue.

Florida Chief Financial Officer Jimmy Patronis and U.S. Senator Rick Scott hosted a roundtable on Friday morning targeting the Internal Revenue Service (IRS) and vendors who provide Artificial Intelligence (AI) services to the federal agency.

The event — the third such panel that Patronis has hosted in recent months — presented forthcoming legislation to be deliberated upon during the next Legislative Session. Per Patronis, the measure will audit and identify state vendors who provide AI services to the federal agency as a means to “fight back against” the use of technologies being “corrupted by the IRS.”

“My constitutional duty is to protect Floridians, so for the upcoming session we will propose legislation to survey all state vendors to assess whether they’re providing AI services to the IRS,” said Patronis. “On many occasions, the vendors who provide services to the federal government also serve the State of Florida, and so that’s an opportunity to learn more on how we can fight back. To the degree we can identify who these vendors are, and get better details on the level of service they’re providing, the more effective we’ll be at reining in the IRS’s targeting of Florida.”

According to a report published by the New York Times last month, the IRS, supported by $80 billion in funding from the Inflation Reduction Act, is employing AI services to investigate tax evasion in hedge funds, private equity groups, and major law firms, as part of its effort to target tax evasion and increase revenue. The report details that the agency is using AI to identify income-shielding patterns, allowing for more extensive audits on high-income taxpayers using digital assets for tax evasion.

“Government spending is why we’re here… there’s no accountability,” said Scott. “We have to get Washington, D.C. under control.”

Patronis last month set his sights on a quartet of cash transfer apps, urging the companies to refrain from developing technology that would enable taxing transfers of $600 or more, triggering reporting to the IRS for taxation purposes. The CFO subsequently publicized a letter addressed to Venmo, Zelle, Cash App, and Paypal demanding that the companies cease all operations relating to the development of technologies taxing Floridians from transactions exceeding $600 in value.

He also requested the financial services to publicly release all communications between their apps and the federal government, asserting that the lines of communication are being guided by the IRS.

“For the IRS to control you, they need to have full access to your finances, and they can’t do that unless they work with Big Tech to get access to you. As long as I am your CFO, we will not allow that in Florida,” concluded Patronis.

In July, the State of Florida announced the launch of the Florida IRS Transparency Portal, an online platform aimed at identifying and addressing allegations of discrimination by IRS agents.

The portal allows individuals, private businesses, and non-profit organizations to report instances of discrimination and provide evidence to identify patterns of targeting based on political causes, practices, or beliefs. By collecting data, tPatronis stated upon its launch that Florida officials intend to gain insights into IRS activity, potentially facilitating the development of legislation to protect businesses in the state.

Patronis has been particularly stronghanded with the IRS in recent months, unveiling a four-pronged plan in February that he said was designed to “protect Floridians from government overreach” and “keep the IRS in check.” He also published a legislative draft last year that would require financial operatives to submit a quarterly report to the Florida Office of Financial Regulation, reporting the number of probes sent by the IRS concerning Florida-domiciled account holders.

A clause in the text also suggested that a comprehensive annual report combining data from previous quarterly reports is to be delivered to the current Speaker of the House by the end of January of each calendar year.

Senate Bill 372 and House Bill 507, which were introduced in connection with the Patronis’ Pillars of IRS Protection proposal, were introduced by Sen. Blaise Ingoglia and Rep. Toby Overdorf, respectively, prior to the 2023 Legislative Session. However, both bills were killed by committees.