OJRE Home

2026 - Volume 9 - Number 2

Substance, Form, and Machines: AI Assistance and Human Normative Judgment in Taxation

Edvin Stefani * ORCID: 0009-0005-2574-406X
Barleti University, Faculty of Economy, Governance and Justice, Tirana, ALBANIA

Open Journal for Research in Economics, 2026, 9(2), 41-50 * https://doi.org/10.32591/coas.ojre.0902.01041s
Received: 27 May 2026 ▪ Revised: 30 July 2026 ▪ Accepted: 4 September 2026

LICENCE: Creative Commons Attribution 4.0 International License.

ARTICLE (Full Text - PDF)

ABSTRACT:

Artificial intelligence is becoming embedded in tax administration, professional advisory work, and digital compliance systems. Its expansion raises a central institutional question: when does a tax task permit reliable computational assistance, and when does it require human normative judgment? This article develops a normative-doctrinal account of that boundary. Drawing on legal theory, comparative anti-abuse doctrine, transfer-pricing guidance, empirical research on large language models, and contemporary AI-governance frameworks, it argues that AI can be valuable for structured retrieval, arithmetic, document synthesis, anomaly detection, and bounded classification. Yet a formally plausible output does not establish a legally justified tax outcome where law requires assessment of economic substance, business purpose, conduct, evidence, proportionality, fairness, or the reasoned exercise of public authority. The article proposes an accountable tax-AI architecture built on task classification, authoritative and time-stamped sources, explicit assumptions, traceable evidence, mandatory escalation, reason-giving, taxpayer contestability, and post-deployment audit. The resulting model is neither technological refusal nor blind automation. It treats AI as an evidentiary and analytical assistant while preserving the human responsibility that makes tax law intelligible, challengeable, and legitimate.

KEY WORDS: artificial intelligence, taxation law, tax administration, human oversight, economic substance, normative judgment.

CORRESPONDING AUTHOR:
Edvin Stefani, Barleti University, Faculty of Economy, Governance and Justice, Tirana, ALBANIA.

REFERENCES:

Bender, E. M., Gebru, T., McMillan-Major, A., & Shmitchell, S. (2021). On the dangers of stochastic parrots: Can language models be too big? In Proceedings of the 2021 ACM Conference on Fairness, Accountability, and Transparency (pp. 610–623). https://doi.org/10.1145/3442188.3445922

Coglianese, C., & Lehr, D. (2017). Regulating by robot: Administrative decision making in the machine-learning era. Georgetown Law Journal, 105, 1147–1223.

Council of the European Union (2016). Council Directive (EU) 2016/1164 laying down rules against tax avoidance practices that directly affect the functioning of the internal market. Official Journal of the European Union, L 193, 1–14. https://eur-lex.europa.eu/eli/dir/2016/1164/oj.

Dahl, M., Magesh, V., Suzgun, M., & Ho, D. E. (2024). Large legal fictions: Profiling legal hallucinations in large language models. Journal of Legal Analysis, 16(1), 64–93. https://doi.org/10.1093/jla/laae003

European Parliament & Council of the European Union (2016). Regulation (EU) 2016/679 (General Data Protection Regulation). Official Journal of the European Union, L 119, 1–88. https://eur-lex.europa.eu/eli/reg/2016/679/oj.

European Parliament & Council of the European Union (2024). Regulation (EU) 2024/1689 laying down harmonized rules on artificial intelligence (Artificial Intelligence Act). Official Journal of the European Union, L. https://eur-lex.europa.eu/eli/reg/2024/1689/oj.

Fink, M., & Finck, M. (2022). Reasoned A(I)dministration: Explanation requirements in EU law and the automation of public administration. European Law Review, 47, 376–392.

Guglyuvatyy, E. (2025). Balancing innovation and integrity: AI in tax administration and taxpayer rights. Humanities and Social Sciences Communications, 12. https://doi.org/10.1057/s41599-025-06099-7

Hart, H. L. A. (2012). The concept of law (3rd ed.). Oxford University Press. (Original work published 1961)
IFRS Foundation (2018). Conceptual framework for financial reporting. https://www.ifrs.org/issued-standards/list-of-standards/conceptual-framework/.
International Monetary Fund (2024). Understanding artificial intelligence in tax and customs administration (Technical Notes and Manuals No. 2024/006). https://doi.org/10.5089/9798400290435.005

Luhmann, N. (2004). Law as a social system (K. A. Ziegert, Trans.; F. Kastner, R. Nobles, & D. Schiff, Eds.). Oxford University Press.

National Institute of Standards and Technology (2023). Artificial intelligence risk management framework (AI RMF 1.0) (NIST AI 100-1). https://doi.org/10.6028/NIST.AI.100-1

National Institute of Standards and Technology (2024). Artificial intelligence risk management framework: Generative artificial intelligence profile (NIST AI 600-1). https://doi.org/10.6028/NIST.AI.600-1

Nay, J. J., Karamardian, D., Lawsky, S. B., Tao, W., Bhat, M., Jain, R., Lee, A. T., Choi, J. H., & Kasai, J. (2024). Large language models as tax attorneys: A case study in legal capabilities emergence. Philosophical Transactions of the Royal Society A: Mathematical, Physical and Engineering Sciences, 382(2270), Article 20230159. https://doi.org/10.1098/rsta.2023.0159

Organisation for Economic Co-operation and Development (2022). OECD transfer pricing guidelines for multinational enterprises and tax administrations 2022. OECD Publishing. https://doi.org/10.1787/0e655865-en

Organisation for Economic Co-operation and Development (2024). OECD AI principles. https://www.oecd.org/en/topics/sub-issues/ai-principles.html.

Organization for Economic Co-operation and Development (2025a). Tax administration digitalisation and digital transformation initiatives. OECD Publishing. https://doi.org/10.1787/c076d776-en

Organisation for Economic Co-operation and Development (2025b). Governing with artificial intelligence. OECD Publishing. https://doi.org/10.1787/795de142-en

Searle, J. R. (2010). Making the social world: The structure of human civilization. Oxford University Press.

U.S. Department of the Treasury (2014). Circular No. 230: Regulations governing practice before the Internal Revenue Service. https://www.irs.gov/pub/irs-pdf/pcir230.pdf.