TaxProf Weblog

July 12, 2023

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Benjamin Alarie (Osler Chair in Enterprise Legislation, College of Toronto; CEO, Blue J Authorized) & Christopher Yan (Senior Authorized Analysis Affiliate, Blue J Authorized), A Reexamination of Cashaw, 179 Tax Notes Fed. 2197 (June 26, 2023):

[W]e revisit the intriguing case of Cashaw [v. Commissioner, T.C. Memo. 2021-123 (Oct. 27, 2021)]. This case centered on Pamela Cashaw, an administrator for a financially distressed hospital, who the Tax Courtroom decided was personally accountable for a $173,000 belief fund restoration penalty (TFRP) below part 6672. The basic concern was whether or not Cashaw was a accountable one who had willfully failed to meet her authorized obligation to remit worker payroll tax withholdings, also referred to as belief fund taxes, thereby warranting the imposition of a TFRP.

In our November article we used Blue J’s TFRP prediction algorithm to evaluate the possible end result of an attraction [Cashaw: Conflicting Duties And The Trust Fund Recovery Penalty, 177 Tax Notes Fed. 1257 (Nov. 28, 2022)]. Blue J predicted with 86 % confidence that the Fifth Circuit would affirm the Tax Courtroom’s resolution if it endorsed the Tax Courtroom’s findings of truth. Our evaluation additionally thought-about alternate situations and examined the circumstances below which the Tax Courtroom’s resolution may be reversed. That train highlighted the significance of scrutinizing numerous components within the case.

Now fast-forward to Could 31. The Fifth Circuit affirmed the Tax Courtroom’s resolution, reiterating Cashaw’s legal responsibility for the belief fund restoration penalties. That validated Blue J’s prediction that Cashaw was a accountable one who had willfully uncared for to pay. The consequence from Blue J’s TFRP predictive mannequin, educated on the info of greater than 375 court docket opinions from 1956 to 2022 (educated as much as the date of the prediction), underscores the transformative energy of machine studying in conducting nuanced authorized analyses.

As we reexamine Cashaw, we not solely delve into the context of TFRP and the components within the attraction but in addition replicate on the position our machine-learning-based prediction performed within the evaluation of this case. The alignment of machine-identified components with these components which were decisive on attraction generates help for broader discussions on the way forward for synthetic intelligence in authorized decision-making.

Notably, our Blue J Predicts contribution in Could strayed from custom to match giant language fashions like ChatGPT (variations GPT-3.5 and GPT-4) with our proprietary Ask Blue J, a chatbot particularly educated to speed up tax analysis [The Rise of Generative AI for Tax Research, 179 Tax Notes 1609 (May 29, 2023)] This comparative evaluation was meant to stipulate the advantages, potential issues, and areas for enchancment the deployment of generative AI to reply to advanced tax regulation queries. Ask Blue J, which is engineered solely for tax regulation, generates responses derived from a meticulously curated tax doc database.

As we return to our established custom of revisiting predictions on pending circumstances this month, we embark on a contemporary journey — investigating how generative AI can improve the analysis course of. Whereas generative AI could not but be mature sufficient to exchange machine studying predictions within the litigation highlight, we see its potential in aiding our analysis.

For example its use, we have now offered pattern authorized queries and responses beneath. Additionally, we have now devoted a piece to dissecting the present limitations and challenges of utilizing giant language fashions in litigation. We offer perception into the methods we’re enthusiastically exploring to beat these points within the growth of Ask Blue J. As a part of our ongoing analysis, we talk about some promising methods generative AI can help our work, together with Blue J’s plans to deal with AI’s inherent challenges, furthering our journey into the unconventional enchancment of tax regulation analysis with new expertise.

Blue J Tax Notes Federal articles: