mlsanityData to 14 Oct 2026

Can LLMs Identify Tax Abuse?

arXiv 2508.20097 ↗First posted 10 Aug 2025q-fin.CP cs.AIcited by 2

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Abstract (arXiv)

We investigate whether large language models can discover and analyze U.S. tax-minimization strategies. This real-world domain challenges even seasoned human experts, and progress can reduce tax revenue lost from well-advised, wealthy taxpayers. We evaluate the most advanced LLMs on their ability to (1) interpret and verify tax strategies, (2) fill in gaps in partially specified strategies, and (3) generate complete, end-to-end strategies from scratch. This domain should be of particular interest to the LLM reasoning community: unlike synthetic challenge problems or scientific reasoning tasks, U.S. tax law involves navigating hundreds of thousands of pages of statutes, case law, and administrative guidance, all updated regularly. Notably, LLM-based reasoning identified an entirely novel tax strategy, highlighting these models' potential to revolutionize tax agencies' fight against tax abuse.

Key facts. Cited by 2 papers in the map (data through 14 Oct 2026). Builds on 9 of its 24 references that are in the map. First posted on arXiv 10 Aug 2025.

Builds on

9 of 24 references.

References · 9

  1. 2025The Ideation-Execution Gap: Execution Outcomes of LLM-Generated versus Human Research Ideascited by 62
  2. 2021Swiss-Judgment-Prediction: A Multilingual Legal Judgment Prediction Benchmarkcited by 60
  3. 2023Large Language Models as Tax Attorneys: A Case Study in Legal Capabilities Emergencecited by 42
  4. 2021Catala: A Programming Language for the Lawcited by 20
  5. 2025A Survey on Large Language Models for Automated Planningcited by 17
  6. 2025J&H: Evaluating the Robustness of Large Language Models Under Knowledge-Injection Attacks in Legal Domaincited by 7
  7. 2024Using LLMs to Discover Legal Factorscited by 5
  8. 2023Black-Box Optimization with Implicit Constraints for Public Policycited by 4
  9. 2025Can AI expose tax loopholes? Towards a new generation of legal policy assistantscited by 2

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Citing papers per year: 2025: 1; 2026: 1.

2 papers.

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  1. 2025Taxation Perspectives from Large Language Models: A Case Study on Additional Tax Penalties
  2. 2025Using Large Language Models for Legal Decision-Making in Austrian Value-Added Tax Law: A Comparative Study
  3. 2026SteuerLLM: Local specialized large language model for German tax law analysis
  4. 2026Reasoners or Translators? Contamination-aware Evaluation and Neuro-Symbolic Robustness in Tax Law
  5. 2025An LLM Agentic Approach for Legal-Critical Software: A Case Study for Tax Prep Software
  6. 2026Solving versus Verifying: Catching Contradictions in Tax Reasoning Systems
  7. 2025Accounting Reasoning in Large Language Models: Concepts, Evaluation, and Empirical Analysis
  8. 2023Beyond Classification: Financial Reasoning in State-of-the-Art Language Models