On October 30, President Biden issued an Executive Order that establishes new standards for artificial intelligence (AI) safety and security to protect Americans from the potential risks of AI systems [Fact Sheet: President Biden Issues Executive Order on Safe, Secure, and Trustworthy Artificial Intelligence, White House Statements and Releases, 10-30-23].
The Executive Order includes actions aimed at protecting Americans’ privacy, advancing equity and civil rights, safeguarding consumers, supporting workers, and ensuring responsible and effective government use of AI, such as the following:
- Protecting Americans’ privacy by prioritizing federal support for accelerating the development and use of privacy-preserving techniques.
- Providing clear guidance to landlords, federal benefits programs, and federal contractors to keep AI algorithms from being used to exacerbate discrimination.
- Developing principles and best practices to mitigate the harms and maximize the benefits of AI for workers by addressing job displacement; labor standards; workplace equity, health, and safety; and data collection.
- Protecting Americans from AI-enabled fraud and deception by establishing standards and best practices for detecting AI-generated content and authenticating official content.
AI-Generated Scams
One AI-related issue that may affect payroll professionals is the rise of fraudulent IRS correspondence generated by AI systems such as ChatGPT. In May, the Senate Finance Committee sent a letter to the IRS warning that recent reports indicated cybercriminals could use emerging AI tools to generate especially deceptive tax scams. In previous tax filing seasons, many scam messages could be identified by spelling mistakes, grammatical errors, and inaccurate references to the tax code. However, tax scams generated by new AI tools are professionally composed and specifically tailored to trick vulnerable taxpayers.
In another example, the letter explained that ChatGPT was used to generate a scam message that asked a business owner to provide their employer identification number, payroll information, and a list of employees’ social security numbers in order to receive the employee retention tax credit.
The letter asked the IRS to explain how the agency plans to educate taxpayers and tax professionals about the existence and typical characteristics of AI-generated tax scams and ensure that warnings and information are delivered in a timely manner.
To help protect Americans from AI-enabled fraud, the Executive Order directs the Department of Commerce to develop guidance for content authentication and watermarking that will clearly label AI-generated content. Federal agencies will use these tools to make it easy to determine if communications received from the government are authentic.
To learn more about federal and state laws, regulations, and information to keep your company’s payroll operations in compliance, check out Payroll Source Plus!
Rayna Alexander, Esq., is Editor of Payroll Information Resources for PayrollOrg.
