Authored by Savannah Fortis via CoinTelegraph,com,

An internal document from the tech giant said that while it develops its own AI technology, employee usage of outside AI chatbots will be restricted…

Big Tech giant Apple has restricted company usage of the widely popular artificial intelligence (AI) chatbot ChatGPT over fears its sensitive data could be compromised.

A report by The Wall Street Journal revealed that an internal document to Apple employees had banned the usage of Microsoft-backed ChatGPT and similar AI tools while the company was developing its own AI technology.

According to the document, the iPhone developer is concerned about workers using the programs and exposing confidential company information. 

It also mentioned a restriction on GitHub’s AI tool Copilot, a Microsoft-owned application that automates writing software code.

Cointelegraph reached out to Apple for further comment.

This internal ban comes after the ChatGPT app debuted for iOS in the Apple app store on May 18. 

The new app is currently available for iPhone and iPad users in the United States but intends to expand to additional countries “in the coming weeks,” along with an Android version coming “soon.”

Alongside Apple, other large companies have restricted internal usage of ChatGPT. On May 2, Samsung sent a memo to employees banning the use of generative AI tools such as ChatGPT. 

In Samsung’s case, the policy followed an incident of Samsung staff uploading a “sensitive code” to the platform.

Samsung told employees who use such applications on personal devices not to upload any company information or they could face “disciplinary action up to and including termination of employment.”

In addition to Samsung and Apple, companies including JPMorgan, Bank of America, Goldman Sachs and Citigroup have also banned the internal use of generative AI tools like ChatGPT.

Many companies banning employee usage of AI chatbots are also in the process of creating their own applications. Back in early May, Apple CEO Time Cook said that the company plans to “weave” AI into its products.

The old Arabian proverb says, “If the camel once gets his nose in the tent, his body will soon follow.” This certainly applies to the way the US and its Western partners have gone about providing Ukraine with heavier and more advanced weaponry.

The “debate” over Western jets for Ukraine is now taking the route that the prior move to send tanks did: at first leaders say “no” and then it’s “we’re mulling it” and this is followed soon with “training” and then…

But now that proverbial camel is making his way into the tent rather quickly…

“The Biden administration has signaled to European allies in recent weeks that the US would allow them to export F-16 fighter jets to Ukraine, sources familiar with the discussions said, as the White House comes under increasing pressure from members of Congress and allies to help Ukraine procure the planes amid intensifying Russian aerial attacks,” CNN reports.

This is precisely how it happened before the US signed off on sending M1 Abrams tanks to Kiev. Germany and the UK were the first to agree to send the Leopard II and Challenger 2 main battle tank, respectively. This “consensus” then allowed President Biden to reverse his stance on tanks, after voicing prior concerns of potential unnecessary direct escalation with Russia. CNN details further of ongoing deliberations: 

Administration officials are not aware, however, of any formal requests by any allies to export F-16s, and State Department officials who would normally be tasked with the paperwork to approve such third-party transfers have not been told to get to work, officials said.

A handful of European countries have a supply of the US-made F-16s, including the Netherlands, which has signaled a willingness to export some of them to Ukraine. But the US would have to approve that third party transfer because of the jets’ sensitive US technology.

“While the US remains reluctant to send any of its own F-16s to Kyiv, US officials told CNN that the administration is prepared to approve the export of the jets to Ukraine if that is what allies decide to do with their supply.” So perhaps the trigger hasn’t been pulled just yet, but it looks imminent – perhaps just weeks away.

But the key will be that European countries need approval even to begin training pilots directly on F-16 technology. Russian media is taking note, as the following in TASS details: 

Ukrainian pilots are not allowed to train on F-16 fighter jets owned by European countries, as Washington remains unconvinced that Kiev needs the expensive aircraft, the New York Times reported on Wednesday, citing a senior Ukrainian official.

Despite the fact that some European countries have signaled that they are ready to send F-16s to Ukraine, authorities in Kiev will need approvals from the United States where the fighters were made. Without American consent, the training is likely to be limited to technical lessons and technical language only, the newspaper said.

The Biden administration is unconvinced that Ukraine needs the expensive jets. Besides, the United States does not want its highly restricted systems to be duplicated or fall into enemy hands. US National Security Advisor Jake Sullivan said on Wednesday that he had no update on F-16s.

Dutch Prime Minister Mark Rutte said on May 9 that his country is discussing the possibility of sending F-16 fighters to Ukraine with Great Britain, Denmark and “some other countries in Europe” and the United States. “An intensive dialogue” is underway, Rutte said.

The UK is among those countries already training Ukrainians on Western aircraft. The process could take at least many months, if not a year. But the Pentagon seems to be moving fast even on the training issue…

Scoop: @YahooNews has obtained a U.S. Air Force assessment of how two Ukrainian pilots did in a 3-week course on F-16s at Morris Air National Guard Base in Feb/March. Conclusion: it’ll take 4 months to train them, not 18, as the Pentagon has said: https://t.co/sY3WSOuum0

— Michael Weiss (@michaeldweiss) May 18, 2023

As we described previously, a French official addressed the serious hurdles facing any future plan to given Ukrainians jets. “Before delivering a plane, you need to train pilots. It takes a long time. Ukrainian pilots are not trained to use French systems. They don’t speak French, let alone English,” an unnamed Elysée official told Politico.

Meanwhile, there’s reportedly movement on this taking place at the G7 Friday…

BREAKING: President Joe Biden informed G7 leaders on Friday that the US will support a joint effort with allies and partners to train Ukrainian pilots on F-16s, a senior administration official tells CNN.

— Natasha Bertrand (@NatashaBertrand) May 19, 2023

Authored by Simon White, Bloomberg macro strategist,

Inflation that’s primed to re-accelerate later in the year will trigger a reversal in underperforming hedges.

Around October last year, four months after US CPI peaked, the market began to trade as if it was no longer a concern. The headline figure was still running at over 7%, but the market exorcised its inflation demons and embraced a future where price growth would soon return to the previous, low-and-stable regime.

Inflation trades, such as TIPS and energy versus tech, which were performing well, are now considerably off their recent highs.

Gold is the exception, at only a few percent off its record high. Adherents to the precious metal would tell you that gold is sensing something that less clairvoyant assets are not. Perhaps. But whether gold is omniscient or not, there are strong reasons to believe the market’s lack of inflation concern may be misguided.

One of which is M2. Most analysis points to M2 growth’s recent collapse, and that the fact it is now contracting for the first time ever. Therefore this must be a strong disinflationary tailwind, with some even calling for outright deflation.

But this is a misunderstanding of different money aggregates. While M1 is cyclical, M2 is typically counter-cyclical. It rose in September 2008 when Lehman collapsed. If you thought this was a sign of impending animal spirits and an imminent upturn in activity, you would have got a savagely rude awakening.

It rose as money was swept from current accounts to savings accounts, as no-one had any intention of spending it until economic stability was restored.

Thus it is the savings deposits component of M2 that matters for inflation, with rises in deposits preceding falls in inflation, and vice-versa.

The continued decline in savings deposits today suggests that median inflation is likely to remain elevated.

This will limit how far headline inflation can fall before cyclical forces cause it to start rising again. This is when the market may become slightly less relaxed about price growth, and inflation trades will be back in vogue.

By Elwin de Groot, Head of Macro Strategy at Rabobank

Ain’t it all coming along nicely?

US and European equity markets are playing true to their innate love (or bias?) for optimism. The S&P500 index just reached its highest level since August last year, European equities are already way beyond that mark, although they are still slightly trailing their month-ago levels. Forget about the upcoming recession, forget about persistent inflation or the US regional banking turmoil, and let’s not think of a last-minute breakdown in the US debt ceiling talks.

It would be foolish to simply discard this as irrational or wrong and to ignore what equity markets are trying to tell us. So what are they telling us?

First of all it seems that investors are less concerned about fundamentals. The long-awaited recession in both the US and the Eurozone still hasn’t come to pass and although (non-energy, non-financial) corporate margins have shrunk over the past year or so, things have not been as weak as expected. Including the energy sector would only strengthen the conclusion that profitability has been upheld. In fact, the most recent earnings season has overwhelmingly surprised to the upside, both for earnings and sales. And for those with a longer-term perspective, there is always the new AI revolution to cling on to.

Secondly, with central banks having slowed their pace of rate hikes, the market has concluded that the end of the tightening cycle may be near and it seems willing to accept the near-term uncertainty that is usually tied to that pivot point. Even though we don’t agree to this optimistic reading of the tea leaves, with long-term rates essentially having moved sideways (or down on balance in the US) over the past several months, the higher rates environment clearly has not proved a major impediment to a more positive risk sentiment of late.

One often overlooked aspect, though, is the liquidity environment. For example, the Fed’s Bank Term Funding Program, which was one of its key responses to the regional banking turmoil, injected some $400bn net into the system, partly offsetting the decline in the Fed’s balance sheet that had started in 2022 with the unwind of its asset purchase program. Although the use of this facility has on a downward path again in recent months, the size of the Fed’s balance sheet is not back to the pre-banking turmoil levels yet. Meanwhile, with the looming debt limit, the US Treasury has been taking all sorts of measures to avoid breaching the $31.4trn debt cap. Data published yesterday showed that the Treasury’s cash balance dropped to $68.4bn; last week it still stood at $140bn. By limiting its supply of securities to the market, the Treasury may have contributed to a more sanguine rates environment (except for the very short-dated T-bills) as well. But, barring a default, this is obviously a temporary phenomenon.

Although I am not so much raising the point of whether equities are overvalued or not, I want to highlight that this backdrop described above may also be behind a fairly favorable reading of the risk environment. This, potentially, is a bigger issue. Let’s take the G7 meeting, the hopes for a US debt ceiling resolution and liquidity as three examples.

Today marks the official start to the G7 meeting in Hiroshima. But in the run-up to this meeting we have already seen a flurry of comments and pronouncements by world leaders, including some very concrete developments. The first key objective is that this G7 is clearly all about presenting a ‘united front’ against Russia, and against other countries that are not following the West and/or are trying to break away from the US-polarity. There appears to be a strong commitment by the G7 to support Ukraine and tighten the economic noose on Russia. Sanctions will be broadened to a wider group of goods, especially those that could facilitate Russia’s war effort. According to Bloomberg, the latest draft of a statement does not talk about a near outright ban on exports to Russia, though. Meanwhile, existing sanctions will be tightened by removing loopholes to circumvent them. This would include the strengthening of enforcement in regards to third countries through which Russia is importing banned goods. One key risk here is that the G7 (plus ‘coalition of the willing’) drive a wider gap between them and those countries that have taken on a more ‘neutral’ stance in the matter. The EU’s Borrell’s call for action against Indian refined products made from Russian oil is an example here, as it has drawn a stingy response from India, who argues that such a measure would even be inconsistent with the EU’s own regulations. Although Japan’s PM Kishida has, amongst others, also invited India, Indonesia and Brazil, I’d imagine these nations would not like to return home empty-handed.

The second key objective of the summit is for the G7 and friends to get a better grip on reducing vulnerabilities in supply chains, in particular on dependency on single economies, such as China. On that front, there has been some concrete news on the sidelines, such as the deal between US-based semiconductor designer and manufacturer Micron Technologies and the Japanese government on a USD1.5bn incentive to develop next generation memory chips in Japan, with Dutch ASML’s EUV technology, as Bloomberg reported yesterday. UK Prime minister Sunak announced GDP18bn of new investment by Japanese firms in the UK, including a semiconductor partnership. So, small steps are being taken. But on the ‘build back better’ front, we would argue that there is really so much on the TO-DO list that expectations may simply be too high and divisions within the G7 (and EU) remain considerable. The way French president Macron wants to go forward, is not necessarily supported in all corners of Europe, even though he is probably one of the few leaders that actually has a clear and stated view.

Turning to the other elephant in the room, the US debt ceiling talks, there has been some positive news yesterday. Notably, it was House Speaker McCarthy that sounded the most optimistic since this saga started. McCarthy said that “he thinks an eventual debt limit bills needs to be on the floor next week, they are not there yet but he sees the path, they are in a much better place than a week earlier and it is important to have an agreement in principle this weekend”. Meanwhile Senate leader Schumer said that negotiations are continuing in the right direction and the Senate would act right after a house vote on the debt limit.

Of course, it ain’t over until the fat lady sings (or the actors in this game of chicken are back in their cages), but if we assume for a moment that there will indeed be an agreement before the Treasury truly runs out of cash, this would also imply a green light for a flurry of fresh debt issuance and hence a withdrawal of liquidity from the market. More fundamentally, although more Fed hikes isn’t our base case (we do expect the Fed to stay on hold longer than the market expects, though), such a deal may at least remove one potential impediment to further rate hikes by the Fed, should that be necessary. In the face of persistent inflation that is obviously not such an outlandish alternative scenario.

Finally, we note that we are only little more than a month removed from the repayment of a considerable sum of EUR477bn by European banks to the ECB. Bloomberg reports this morning that the ECB is “stepping up scrutiny of lenders’ liquidity reserves and may communicate stricter requirements to individual firms later this year […]”. Such measures would reduce the amount of ‘free’ liquidity on top of the impact from TLTRO repayments and a gradual wind down of the APP. In other words, if anything, the liquidity environment going forward could become less favorable for risk appetite.

Just three days after Politico reported the latest authorization of military aid to Ukraine was on pace to run out in mid-summer, the Pentagon on Thursday disclosed it had made an accounting error with previous weapon shipments, overvaluing them by about $3 billion. 

And just like that, the Pentagon says it’s now free to hand over another $3 billion in weapons, ammunition and supplies without asking Congress for approval.  

“We’ve discovered inconsistencies in how we value the equipment that we’ve given,” an unnamed senior defense official told Reuters, adding that it’s possible the $3 billion discrepancy could grow even larger as the Department of Defense continues scrutinizing its accounting error.

Many of the weapon transfers to Ukraine have come from Pentagon stockpiles rather than straight from a factory. According to two DOD officials, the Pentagon used replacement cost for these, but should have used the Pentagon’s “net book value,” which is the Pentagon’s original purchase cost minus depreciation.

Whether sincerely or as part of a rigged game, Capitol Hill warmongers scolded the Pentagon. “The revelation of a three-billion-dollar accounting error discovered two months ago and only today shared with Congress is extremely problematic, to say the least,” said House Foreign Affairs Chair Michael McCaul and House Armed Services Chair Mike Rogers in a joint statement. “These funds could have been used for extra supplies and weapons for the upcoming counteroffensive, instead of rationing funds to last for the remainder of the fiscal year.”

The two opportunistically reiterated previous calls for Biden to make up for “this precious lost time” by starting to provide Ukraine with dual-purpose improved conventional munitions (DPICM) and the MGM-140 Army Tactical Missile System (ATACMS).

DPICM is a special 155mm artillery round. Controversially, it’s a type of “cluster munition” that’s “notorious for leaving dangerous unexploded munitions scattered over a wide area,” Forbes reported, noting that — in 2017 — eight Vietnamese were killed and six injured by cluster ammunition used more than 40 years before. The 2008 Convention on Cluster Munitions outlaws them, but the US government is not among the more than 100 signatories. 

Thus far, the US government has given Ukraine almost $37 billion in military aid over the course of the 15-month war. However, Dave DeCamp at Antiwar.com notes that — when tallying military aid, direct budgetary aid, training, the cost of US troops deployments to Eastern Europe and other aid — the real tally of War State’s latest proxy war against Russia exceeds $113 billion. 

The Pentagon “error” adds a new stateside layer of doubt about the aid scheme’s integrity. Questions already abounded about what happens to weapons once they’re in the hands of the notoriously corrupt Ukrainian government. The Pentagon has a small team of inspectors in Ukraine, who can only provide limited accountability without venturing toward the battlefront — to say nothing of having to rely on the honest participation of their Ukrainian “partners.”  

With American support for US involvement softening, Congressional hawks will welcome the opportunity to give Ukraine another $3 billion without taking a vote. ​​​​​​An April Brookings poll found only 26% think America’s goal should be returning Ukraine to the status quo that preceded Russia’s invasion. 

Authored by Simon White, Bloomberg macro strategist,

The relative cost of upside equity protection is outpacing tail-risk insurance as FOMO-driven trading pushes the market higher.

Price is everything. Fashioning reasons why the equity market should be lower has been suspiciously easy this year: recession risk, bank turmoil, debt ceiling, etc. But markets have a habit of causing the greatest number of people the maximum amount of pain – utilitarian they are not.

That’s why it’s essential to always pay attention to measures based on price and nothing else. They are far less corruptible by bias or transient trends.

I noted one such measure, the Coppock Signal, had triggered in March. The Coppock is one of the best indications of long-term bottoms in equities. It came on the heels of an even simpler measure, the 13- versus 26-week moving-average crossover signal, indicating the medium-term trend of the market was now positive.

The S&P has ground higher, powered by a very narrow band of mega-cap tech stocks, while the Nasdaq is off to the races.

A new revolution in AI is providing a powerful tailwind and leading to FOMO-driven chasing – no-one wants to be left offside if this ends up being the beginning of a new bull market.

Speculator shorts have begun to be covered, according to CoT data (see chart below). Inferred positioning of CTAs and macro funds shows them getting tentatively, but steadily, longer.

This could rise more sharply based on some of the price behavior in option markets. Put skew has risen, indicating the relative cost of hedging tail-risk in the S&P has climbed to 18-month highs. Higher prices mean markets have greater potential downside.

But call skew has risen by even more, highlighting increased demand for chasing the market higher. The market yesterday was on the cusp of bursting through 4,200, a significant resistance level which could trigger more follow-through if it is breached. Fear of missing out is a powerful, emotive force.

Unfortunately, such wildly speculative behavior can sow the seeds of its own destruction.

Activity in zero-day options continues to dominate, with JPMorgan noting that retail traders have turned from net buyers to significant net sellers of gamma. Selling vol with no margin will add to the market’s inherent instability.

The market may be primed to maintain its medium-term positive trend, but being long will not be relaxing, with potholes and vol spikes (the VIX continues to be low versus cross-asset and realized volatility) along the way.

One of the longest-lasting Wall Street CEOs is set to retire in the next 12 months.

Morgan Stanley’s James Gorman plans to step down as CEO and assume the role of executive chairman.

“It is the board’s and my expectation that it will occur at some point in the next 12 months,” Gorman said Friday at the firm’s annual meeting.

“That is the current expectation in the absence of a major change in the external environment.”

Gorman says the board has identified three potential candidates to succeed him.

Morgan Stanley shares kneejerked lower on the headline but bounced back…

Developing…

Authored by Joseph Lord via The Epoch Times,

Whistleblowers told Republicans on the House Judiciary Committee that gave Jan. 6 connected bank records to the FBI without customers’ knowledge or consent.

In their testimony, whistleblowers claimed that the FBI had become “enveloped in politicization” and made several claims of “serious abuses” over an extended period of time.

Among those abuses, whistleblowers said that Bank of America (BOA) had transferred information to the FBI on transactions that took place in Washington on Jan. 6, 2021. Customers were not informed of this data transfer.

Firearm Owners Targeted

Those who used their Bank of America accounts to purchase a firearm were reportedly bumped to the top of the list handed over to the FBI.

In a report released on May 18, Republicans revealed whistleblower testimony from retired FBI Supervisory Intelligence Analyst George Hill, who made the allegations.

“The Bank of America, with no directive from the FBI, data-mined its customer base,” Hill testified, saying that this data mining comprised transactions made between Jan. 5, 2021, and Jan. 7, 2021.

Specifically, they targeted transactions made in Washington or nearby counties in Maryland and Virginia.

Investigators asked Hill, “It’s anyone who used a Bank of America either debit or credit card to conduct a transaction?”

“Right,” Hill replied. “Any transaction. To buy a hot dog. Doesn’t matter.”

Hill then confirmed that those who had purchased a gun “at some point in time, any time” were bumped to the top of the list given to the FBI.

“This list was provided without any legal process to the FBI?”

“Correct,” Hill replied.

“So my understanding of the [FBI Domestic Investigations and Operations Guide] and amateur assessment based on law is that, you know, if a citizen sees a crime in commission, there’s nothing wrong with injecting that and opening up a case. But, to my knowledge, using a debit card in the District [of Columbia] does not provide adequate predication for the investigation of a crime.”

He alleged that “there was no legal process asking for [the information]” and that Bank of America had acted entirely on its own accord.

Bank of America gave a list to the FBI of anyone who used BofA credit/debit cards in the DC area between Jan 5-7th, 2021 – regardless of whether they participated in the events of Jan. 6th. pic.twitter.com/C0zBA1AGmy

— Rep. Dan Bishop (@RepDanBishop) May 18, 2023

…

In their concluding commentary on the report, House Republicans called the testimony “highly alarming.”

“The FBI seemingly worked with a major financial institution to receive, without legal process, financial records about Americans … This invasion of the privacy of American citizens is highly concerning.”

…

Read more here…

For those wondering why so many major corporations are jumping onto the woke advertising train in recent years despite the fact that they tend to lose customers and money as a consequence, it’s important to understand that the world of business is fundamentally changing.  A lot of people make the mistake of thinking that companies are “bending the knee” to woke activism – But this is not the case.

Rather, it is the corporate world as well as government institutions that are actively fueling woke activism.  If these institutions were not funding and promoting far-left ideology, it would quickly die as it should.  Instead, they are keeping it alive and are attempting to force it into the collective consciousness of the population.  Corporate elites and far-left governments are the source of the woke mind virus, not the victims of it.

You will see companies like Bud Light take a massive profit hit after jumping into an ad partnership with a man that thinks he’s a woman, and then see a competing company like Miller Light make a similar woke mistake.  They are doubling and tripling down on their failures and it’s not going to stop unless they go bankrupt.  This is because they are no longer operating as businesses, they are now centers for activism and social engineering.  

That’s why, as bizarre as it seems, a company like Dove (a subsidiary of Unilever that produces beauty products) is sticking its nose into the world of video games to change beauty standards for imaginary characters.  In one of the most woke ads of the year so far, Dove seems to argue in favor of clinically obese women finding more representation as heroes in multimedia.

The commercial is disconnected from reality for a number of reasons.  First, it is yet another attempt to push the narrative that beauty standards are a social construct.  This is false.  Numerous studies show at least part of our concept of beauty is inborn.  While the ratio might be debatable, the reality is that beauty is not in the eye of the beholder, it’s hard wired, at least in part, into our brains. 

Second, overweight people are considered not beautiful (or heroic) for a number of reasons:  Humans naturally gravitate toward symmetry.  An athletic body or a body with a more standard size to weight ratio is often considered more healthy and thus more attractive.  Obesity is also a potential sign of lack of mental or emotional discipline and is viewed as a warning that the person is lazy or unstable.  Being overweight increases the likelihood of future health hazards and a shorter lifespan on average.  These are not things that fit the heroic paradigm, and they are certainly not characteristics to aspire to.

The solution is not to tell people that being overweight is perfectly normal, considering obesity is rarely possible outside of first world conditions anyway.  Rather, the solution is to encourage people to better themselves.  They are not “perfect as they are.”  There is always room for improvement, and refusing to improve comes with disadvantages in life, whether they like it or not.       

Third, the ad ignores demographic and genre studies for female gamers.  While leftists love to argue that around 40% of all gamers today are women, what they don’t mention is that this is over multiple platforms and genres.  Women predominantly prefer to play puzzle games, sim games and RPGs, and tend to avoid competition.  Their least favorite games are action, strategy, combat and sports related.  The following video might help to explain why this disparity exists:

Erasing normal beauty standards in action oriented games would do little or nothing for women, but what if the target of this activism is not women, but men.  Maybe these companies and their feminist guidelines are designed to ruin what men want or condition men to feel ashamed for what they want?  Maybe the narrative has nothing at all to do with giving women more representation?

That kind of ugly dynamic would fit closely with the ongoing trend of woke leftists invading and undermining traditionally male spaces while telling them if they desire a club of their own they are sexist.  

Even if you don’t play or care about video games, the Dove commercial is yet another example of why people opposed to the social justice movement should be more aware of the subversion of popular culture.  It might not affect you, but it will certainly affect a large percentage people in the next generation as more and more woke propaganda is implanted into every facet of entertainment and media with the goal of brainwashing western youth.          

Authored by Savannah Hulsey Pointer via The Epoch Times (emphasis ours),

The Internal Revenue Service (IRS) has flagged over 1 million 2022 tax returns for additional review over potential identity fraud, according to a recent report.

The Treasury Inspector General for Tax Administration’s interim results (pdf) of the 2023 filing season, which they released on May 10, cited 1.1 million identified as of March 2 that warranted a closer look.

The IRS stated that thus far, they have confirmed that 12,617 of the tax returns were fraudulent, and they prevented the distribution of refunds totaling $105.3 million.

During the last tax year, the IRS only identified 9,626 as confirmed fraudulent returns, with the 2023 filing period already seeing a jump of roughly 3,000 illegal returns.

According to the study, the agency would employ 236 different filters during the tax filing season of 2023, which is an increase from the 168 filters that were used during the tax filing season of 2022.

The Treasury Inspector General’s office went on to explain that the filters consist of reported income and withholding amounts, filing requirements, age, filing history, and prison status. These characteristics are derived from tax returns that have been shown to be false.

If a tax return is flagged by an agency filter, the Internal Revenue Service (IRS) will not process it until the taxpayer’s identification has been verified.

The IRS anticipates to collect 167 million individual income tax returns in the year 2023. As of March 3, 2023, the IRS had received 54.9 million tax returns, of which 53.6 million (or 97.5 percent) were filed online and the IRS has distributed $127.3 billion in tax money.

According to recent expert testimony before the Senate, the IRS’s increased enforcement activities are likely to impact small and midsize businesses.

Chris Edwards of the CATO Institute testified before the Senate Finance Committee on May 16, explaining that the Biden administration’s promise that there won’t be more tax audits for companies and families making less than $400,000 per year applies to “total positive” income, which means that there are no losses.

Read more here…