The employment of AI by the Italian tax administration to fight tax relief abuse: the difficult balance between public interest and taxpayer rights

The use of AI is causing a metamorphosis in the relationship between the taxpayer and the tax administration both in the tax implementation phase (for example the pre-filled income tax and VAT returns) and the verification and control processes. This holds true for Italy as well. This change, if it is not properly governed, could however have a high cost in terms of infringement of some fundamental rights of taxpayers, above all when the adoption of decisions that have immediate effects on the legal status of the recipients is entrusted to artificial intelligence systems. This is the characteristic that distinguishes the new audit procedure introduced by the Italian legislator to tackle fraud perpetrated through the transfer of tax credits for interventions aimed at improving the energy efficiency of buildings and which is the subject of investigation in this paper. The objective of this paper is to verify whether, in this context, the AI leads to a satisfactory result in terms of balance between the apparently opposing needs for the protection of the state’s fiscal interest and the protection of the taxpayer’s rights.