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TaxCalc Ai system

TaxCalc LLM Interface User Guide

The TaxCalc LLM Interface is a powerful and versatile tool for tax policy analysis, calculation, and filing. It combines the capabilities of the taxcalc Python library with an AI-powered assistant to provide a comprehensive solution for individuals, businesses, and tax professionals at all levels.

Key Features

  • Tax Calculations: Perform accurate calculations of income tax, payroll tax, marginal rates, deductions, and credits.
  • Tax Reforms: Analyze the impact of tax policy changes on revenue and distribution across income groups.
  • Data Management: Import, clean, merge, and validate tax-related data from various sources and formats.
  • Tax Forms: Generate, populate, and validate individual and business tax forms, including federal and state-specific forms.
  • E-filing: Prepare and electronically file tax returns with the relevant tax authorities, ensuring compliance and convenience.
  • Advanced Analytics: Conduct distributional analysis, revenue scoring, behavioral response modeling, and custom scenarios.
  • Customization: Execute arbitrary Python code using open-interpreter for tailored analysis and integration with external tools.

Virtual Focus

The TaxCalc LLM Interface is designed to be used virtually, providing a seamless and accessible experience for users regardless of their location. The interface is built on Google Colab, allowing users to access and run the tool directly in their web browser without the need for local installations.

The virtual nature of the interface enables collaboration, sharing, and remote access, making it ideal for teams working on tax projects across different locations. Users can easily share their notebooks, results, and insights with colleagues and clients, fostering effective communication and decision-making.

E-filing Capabilities

One of the key features of the TaxCalc LLM Interface is its e-filing capabilities. The tool integrates with the tax authorities' electronic filing systems, enabling users to prepare and submit tax returns electronically. This streamlines the filing process, reduces errors, and ensures timely compliance with tax regulations.

The e-filing functionality includes:

  • Form Population: Automatically populate tax forms with calculated data, minimizing manual data entry.
  • Form Validation: Validate tax forms for completeness, accuracy, and compliance with tax rules.
  • Electronic Submission: Securely transmit tax returns to the relevant tax authorities, such as the IRS or state tax agencies.
  • Status Tracking: Monitor the status of e-filed returns and receive confirmation of successful submission.

E-filing through the TaxCalc LLM Interface saves time, reduces paperwork, and provides peace of mind by ensuring accurate and compliant tax filings.

Step-by-Step Guide for E-filing

To e-file your tax return using the TaxCalc LLM Interface in Google Colab, follow these steps:

  1. Open the Google Colab notebook containing the TaxCalc LLM Interface code.
  2. Install the required libraries and mount your Google Drive for file access.
  3. Set up your OpenAI API key using Google Colab secrets.
  4. Prepare your tax data:
    • Gather all necessary tax documents, such as W-2 forms, 1099 forms, and receipts.
    • Organize your tax data into a structured format, such as CSV or JSON files.
    • Upload your tax data files to your Google Drive or have them readily accessible.
  5. Select the appropriate service type for your tax filing needs (e.g., Personal Tax, Business Tax).
  6. Enter your tax filing query in the text input field, specifying your intent to e-file your return.
  7. Click the "Submit Query" button to generate guidance and populate the tax forms.
  8. Review the generated guidance and the populated tax forms for accuracy and completeness.
  9. If any changes or additional information are required, update your tax data and resubmit the query.
  10. Once you are satisfied with the populated tax forms, proceed with the e-filing process:
    • Validate the tax forms using the built-in validation functionality.
    • If the validation passes, generate the electronic filing documents and attachments.
    • Securely transmit the e-file documents to the relevant tax authorities using the integrated e-filing functionality.
    • Monitor the status of your e-filed return and await confirmation of successful submission.
  11. Keep a record of your e-filing confirmation and any related documents for your records.

By following these steps, you can easily prepare and e-file your tax return using the TaxCalc LLM Interface in Google Colab. The interface guides you through the process, populates the necessary forms, validates the data, and securely transmits your return to the tax authorities.

Analytics and Scenarios

The TaxCalc LLM Interface offers advanced analytics capabilities to support data-driven decision-making and scenario analysis. Users can leverage the tool's analytical features for various purposes, such as:

  • Distributional Analysis: Assess the impact of tax policies on different income groups, identifying winners and losers.
  • Revenue Scoring: Estimate the revenue implications of tax reforms, helping policymakers make informed decisions.
  • Behavioral Response Modeling: Analyze how taxpayers might respond to changes in tax rates or incentives.
  • Custom Scenarios: Create and compare custom tax scenarios to evaluate the outcomes of different policy options.

The interface provides a range of analytical variables and parameters that users can customize to suit their specific needs. These variables cover aspects such as tax calculations, data management, tax forms, filing, behavioral responses, and state-specific factors.

Personal and Professional Use Cases

The TaxCalc LLM Interface caters to a wide range of users, from individuals managing their personal taxes to tax professionals serving clients at various levels. Here are some examples of how the tool can be used in different scenarios:

  • Individual Taxpayers: Use the interface to calculate personal income tax, explore deductions and credits, and e-file tax returns.
  • Small Business Owners: Manage business taxes, generate required forms, and analyze the impact of tax policies on their operations.
  • Tax Professionals: Serve clients more efficiently by automating tax calculations, generating forms, and providing analytical insights.
  • Accounting Firms: Streamline tax preparation processes, ensure compliance, and offer value-added services to clients.
  • Fortune 500 Companies: Conduct complex tax analysis, model the impact of tax reforms, and optimize tax strategies.
  • Policy Analysts: Evaluate the distributional and revenue effects of proposed tax policies to inform decision-making.
  • Academic Researchers: Access rich tax data, perform advanced analytics, and contribute to tax policy research.

Whether you are an individual taxpayer, a small business owner, or a tax professional serving high-profile clients, the TaxCalc LLM Interface provides the tools and capabilities to streamline tax management, ensure accuracy, and make informed decisions.

Getting Started

To start using the TaxCalc LLM Interface, follow these steps:

  1. Open the Google Colab notebook containing the interface code.
  2. Install the required libraries and mount your Google Drive for file access.
  3. Set up your OpenAI API key using Google Colab secrets.
  4. Explore the available service types and select the one that best fits your needs.
  5. Enter your tax policy query and click the "Submit Query" button to generate guidance and results.
  6. Review the generated guidance and the executed taxcalc results.
  7. Use the text-based UI to navigate through different options, such as viewing chat history or configuring taxcalc settings.

For more detailed instructions and examples, refer to the code documentation and comments within the notebook.

Conclusion

The TaxCalc LLM Interface is a comprehensive and user-friendly tool that empowers individuals, businesses, and tax professionals to navigate the complexities of tax policy analysis, calculation, and filing. With its virtual focus, e-filing capabilities, advanced analytics, and customization options, the interface provides a powerful solution for a wide range of tax-related needs.

Whether you are managing your personal taxes, running a small business, or serving clients at the highest levels, the TaxCalc LLM Interface offers the tools and insights you need to make informed decisions, ensure compliance, and optimize your tax strategies. Embrace the power of AI-assisted tax management and take your tax processes to the next level with the TaxCalc LLM Interface.

# Install required libraries
!pip install litellm openinterpreter
# Import libraries
import os
from google.colab import secrets, files, drive
from litellm import LiteLLM
from taxcalc import *
import subprocess
import json
import taxcalc_accounts_api as tcapi
import taxcalc_return_api as trapi
from openinterpreter import OpenInterpreter
# Mount Google Drive
drive.mount('/content/drive')
# Set up OpenAI API key using Colab secrets
os.environ["OPENAI_API_KEY"] = secrets.get('OPENAI_API_KEY')
# Initialize LiteLLM with GPT-3.5 model
llm = LiteLLM(model_name="gpt-3.5-turbo", max_tokens=16000)
# Define taxcalc variables and descriptions
taxcalc_variables = {
"Tax Calculation Variables": {
"Income tax liability": "Total income tax owed by an individual or business",
"Payroll tax liability": "Total payroll taxes owed, including Social Security and Medicare taxes",
"Marginal tax rates": "Tax rate applied to the next dollar of income",
"Tax deductions and credits": "Reductions to taxable income or tax liability",
"Tax reforms and policy changes": "Modifications to tax laws and parameters",
"Revenue effects of tax changes": "Impact of tax reforms on government revenue",
"Distributional analysis by income group": "Tax impact across different income levels"
},
"Data Management Variables": {
"Input data sources": "Data inputs for tax analysis, such as surveys or administrative data",
"Output data formats": "Data formats for exporting results, such as CSV or JSON",
"Data cleaning and preprocessing": "Preparing and transforming input data for analysis",
"Data merging and splitting": "Combining or separating datasets based on specific criteria",
"Data validation and error handling": "Checking data integrity and handling anomalies"
},
"Tax Form Variables": {
"Individual tax forms": "Tax forms for individual taxpayers, such as Form 1040",
"Business tax forms": "Tax forms for businesses, such as Form 1120",
"Information returns": "Forms for reporting income and transactions, such as W-2 or 1099",
"State and local tax forms": "Tax forms specific to state and local jurisdictions",
"Form field mappings and calculations": "Mapping data to tax form fields and calculating values"
},
"Tax Filing Variables": {
"E-filing status and tracking": "Electronic filing status and progress tracking",
"Tax return validation results": "Results of validating tax returns for errors or inconsistencies",
"E-file document generation": "Generating electronic filing documents and attachments",
"Submission status to tax authorities": "Status of tax return submission to relevant authorities"
},
"Parameter Variables": {
"start_year": "First year for calculating tax results",
"num_years": "Number of years to calculate tax results",
"last_known_year": "Last known year for tax law parameters",
"removed": "Parameters that have been removed",
"redefined": "Parameters that have been redefined",
"wage_indexed": "Parameters that are wage-indexed",
"EITC_c": "Earned Income Tax Credit (EITC) parameters",
"SS_Earnings_c": "Social Security earnings cap"
},
"Behavioral Response Variables": {
"Elasticity of taxable income": "Responsiveness of taxable income to tax rate changes",
"Elasticity of labor supply": "Responsiveness of labor supply to tax rate changes",
"Elasticity of capital gains realizations": "Responsiveness of capital gains realizations to tax rate changes",
"Elasticity of charitable giving": "Responsiveness of charitable giving to tax rate changes"
},
"State Tax Variables": {
"State income tax rates and brackets": "Income tax rates and brackets for each state",
"State sales tax rates": "Sales tax rates for each state",
"State EITC parameters": "State-specific Earned Income Tax Credit parameters",
"State-specific deductions and credits": "Deductions and credits specific to each state"
},
"Open-Interpreter Variables": {
"Python code snippets": "Python code for custom tax analysis and calculations",
"JavaScript code snippets": "JavaScript code for web-based tax applications",
"Shell scripts": "Shell scripts for automating tax-related tasks",
"SQL queries": "SQL queries for accessing and manipulating tax data",
"R scripts": "R scripts for statistical analysis of tax data",
"File paths for reading and writing": "File paths for input and output data",
"Directory paths for file management": "Directory paths for organizing tax-related files",
"Package dependencies for installation": "Python packages required for tax analysis",
"API endpoints and authentication credentials": "API endpoints and credentials for accessing external tax services"
}
}
# Define function to query LLM with chat memory
def query_llm(prompt, chat_history=[]):
# Append taxcalc variables and descriptions to the chat history
variables_prompt = "Here are the available taxcalc variables and their descriptions:\n\n"
for category, variables in taxcalc_variables.items():
variables_prompt += f"Category: {category}\n"
for variable, description in variables.items():
variables_prompt += f"- {variable}: {description}\n"
variables_prompt += "\n"
chat_history.append(("system", variables_prompt))
response = llm.chat_completion(prompt, chat_history)
chat_history.append((prompt, response))
return response, chat_history
# Define function to generate dynamic guidance prompt
def generate_guidance_prompt(user_query, service_type):
prompt = f"""
You are an AI assistant to help use the taxcalc Python library.
The user is interested in {service_type}.
Based on their query: {user_query}, provide guidance on which
taxcalc capabilities to use and how to use them for this service type.
Refine the query if needed. Respond with a clear prompt to guide the user.
"""
return prompt
# Define function to execute taxcalc based on LLM guidance
def execute_taxcalc(guidance):
# 1. Use the taxcalc Python package API directly
def use_taxcalc_api(guidance):
# Parse the guidance to extract taxcalc parameters and reforms
params, reforms = parse_guidance(guidance)
# Create Policy and Records objects
policy = Policy()
records = Records()
# Apply the reforms to the Policy object
policy.implement_reform(reforms)
# Create a Calculator using the Policy and Records
calc = Calculator(policy=policy, records=records)
# Advance the Calculator to the target year
calc.advance_to_year(params['year'])
# Compute the tax liabilities
calc.calc_all()
# Extract the results
income_tax = calc.weighted_total('iitax')
payroll_tax = calc.weighted_total('payrolltax')
# Return the results as a dictionary
results = {
'income_tax': income_tax,
'payroll_tax': payroll_tax
}
return results
# 2. Call the simtax.py command-line interface
def use_simtax_cli(guidance):
# Parse the guidance to get the tax policy parameters
params = parse_guidance(guidance)
# Construct the simtax.py command with the parameters
command = f"simtax.py --reform {params['reform']} --year {params['year']}"
# Use subprocess.run() to execute simtax.py and capture the output
result = subprocess.run(command, shell=True, capture_output=True, text=True)
# Parse the output and return the results
output_lines = result.stdout.strip().split('\n')
output_data = [json.loads(line) for line in output_lines]
return output_data
# 3. Integrate with TaxCalc's accounts production software
def use_taxcalc_accounts(guidance):
# Use TaxCalc's API to get trial balance data
trial_balance = tcapi.get_trial_balance()
# Create Records object from the trial balance
records = Records(data=trial_balance)
# Parse the guidance to extract taxcalc parameters and reforms
params, reforms = parse_guidance(guidance)
# Create Policy object and apply the reforms
policy = Policy()
policy.implement_reform(reforms)
# Create Calculator and compute tax liabilities
calc = Calculator(policy=policy, records=records)
calc.advance_to_year(params['year'])
calc.calc_all()
# Get the results
results = calc.dataframe(['iitax', 'payrolltax'])
# Export the results back to TaxCalc Accounts Production
tcapi.update_accounts(results)
return results
# 4. Utilize TaxCalc's tax return production features
def use_taxcalc_return(guidance):
# Parse the guidance to extract data for the tax forms
form_data = parse_guidance(guidance)
# Dynamically populate the relevant tax forms in TaxCalc
trapi.populate_forms(form_data)
# Validate the return using TaxCalc's built-in tax logic
validation_result = trapi.validate_return()
if validation_result['is_valid']:
# Generate detailed calculation reports and summaries
calculation_report = trapi.generate_calculation_report()
tax_summary = trapi.generate_tax_summary()
# Optionally e-file the return with HMRC
if form_data['efile']:
filing_result = trapi.efile_return()
else:
filing_result = None
else:
calculation_report = None
tax_summary = None
filing_result = None
# Return the results
results = {
'calculation_report': calculation_report,
'tax_summary': tax_summary,
'filing_result': filing_result,
'validation_result': validation_result
}
return results
# 5. Provide a generic interface to execute arbitrary Python code
def execute_arbitrary_code(guidance):
# Extract the Python code from the guidance
code = extract_code(guidance)
# Extract any file uploads from the guidance
uploaded_files = extract_uploaded_files(guidance)
# Extract any package dependencies from the guidance
dependencies = extract_dependencies(guidance)
# Use open-interpreter to install dependencies and execute code
interpreter = OpenInterpreter()
for file_path, file_content in uploaded_files.items():
interpreter.write_file(file_path, file_content)
for package in dependencies:
interpreter.install(package)
output, result = interpreter.execute(code)
# Capture output files written by the code
output_files = interpreter.list_files()
# Return output, result, and output files
return output, result, output_files
# Parse the guidance to determine which execution method to use
execution_method = determine_execution_method(guidance)
if execution_method == 'taxcalc_api':
return use_taxcalc_api(guidance)
elif execution_method == 'simtax_cli':
return use_simtax_cli(guidance)
elif execution_method == 'taxcalc_accounts':
return use_taxcalc_accounts(guidance)
elif execution_method == 'taxcalc_return':
return use_taxcalc_return(guidance)
else:
return execute_arbitrary_code(guidance)
# Set up Colab UI widgets
service_type = widgets.Dropdown(
options=['Personal Tax', 'Business Tax', 'Advanced Analytics', 'Other Services'],
description='Service Type:',
)
user_query = widgets.Text(placeholder="Enter your tax policy query")
guidance_output = widgets.Output()
taxcalc_output = widgets.Output()
def on_query_click(b):
query = user_query.value
service = service_type.value
# Generate guidance prompt and query LLM
guidance_prompt = generate_guidance_prompt(query, service)
guidance, chat_history = query_llm(guidance_prompt)
with guidance_output:
print(guidance)
# Execute taxcalc based on guidance
result = execute_taxcalc(guidance)
with taxcalc_output:
print(result)
query_button = widgets.Button(description="Submit Query")
query_button.on_click(on_query_click)
# Organize options in a grid
grid = widgets.GridspecLayout(3, 3)
# Personal Tax options
personal_tax_info = widgets.HTMLMath(
value="<b>Personal Tax</b><br>Compute individual income tax, marginal rates, etc.",
)
grid[0, 0] = personal_tax_info
# Business Tax options
business_tax_info = widgets.HTMLMath(
value="<b>Business Tax</b><br>Compute corporate income tax, deductions, etc.",
)
grid[0, 1] = business_tax_info
# Advanced Analytics options
advanced_analytics_info = widgets.HTMLMath(
value="<b>Advanced Analytics</b><br>Distributional analysis, revenue scoring, etc.",
)
grid[1, 0] = advanced_analytics_info
# Other Services options
other_services_info = widgets.HTMLMath(
value="<b>Other Services</b><br>Tax reform analysis, custom scenarios, etc.",
)
grid[1, 1] = other_services_info
grid[2, 0] = service_type
grid[2, 1] = user_query
grid[2, 2] = query_button
display(grid)
display(guidance_output)
display(taxcalc_output)
# Add visualization of taxcalc results
def visualize_results(results):
# Placeholder for visualization code
pass
# Add ability to configure and manage taxcalc
def configure_taxcalc():
print("TaxCalc Configuration")
print("---------------------")
# Load existing configuration from file
config_file = "taxcalc_config.txt"
if os.path.exists(config_file):
with open(config_file, "r") as file:
config = json.load(file)
start_year = config.get("start_year", 2023)
num_years = config.get("num_years", 10)
reform_file = config.get("reform_file", "")
data_file = config.get("data_file", "")
output_dir = config.get("output_dir", "")
else:
start_year = 2023
num_years = 10
reform_file = ""
data_file = ""
output_dir = ""
# Display current configuration
print("Current Configuration:")
print(f" Start Year: {start_year}")
print(f" Number of Years: {num_years}")
print(f" Reform File: {reform_file}")
print(f" Data File: {data_file}")
print(f" Output Directory: {output_dir}")
# Prompt for configuration changes
while True:
print("\nConfiguration Options:")
print("1. Set Start Year")
print("2. Set Number of Years")
print("3. Set Reform File")
print("4. Set Data File")
print("5. Set Output Directory")
print("6. Save Configuration")
print("7. Exit")
config_choice = input("Enter your choice: ")
if config_choice == '1':
start_year = int(input("Enter the start year: "))
elif config_choice == '2':
if config_choice == '1':
start_year = int(input("Enter the start year: "))
elif config_choice == '2':
num_years = int(input("Enter the number of years: "))
elif config_choice == '3':
reform_file = input("Enter the path to the reform file: ")
elif config_choice == '4':
data_file = input("Enter the path to the data file: ")
elif config_choice == '5':
output_dir = input("Enter the output directory: ")
elif config_choice == '6':
# Save the configuration to a file
config = {
"start_year": start_year,
"num_years": num_years,
"reform_file": reform_file,
"data_file": data_file,
"output_dir": output_dir
}
with open("taxcalc_config.txt", "w") as file:
json.dump(config, file)
print("Configuration saved successfully!")
elif config_choice == '7':
break
else:
print("Invalid choice. Please try again.")
print("Returning to main menu...")
# Implement a text-based UI to navigate options
while True:
print("Select an option:")
print("1. Enter tax policy query")
print("2. View chat history")
print("3. Configure taxcalc")
print("4. Quit")
choice = input("Enter your choice: ")
if choice == '1':
query = input("Enter your tax policy query: ")
service = input("Select service type (Personal Tax, Business Tax, Advanced Analytics, Other Services): ")
guidance_prompt = generate_guidance_prompt(query, service)
guidance, chat_history = query_llm(guidance_prompt, chat_history)
print(f"Guidance: {guidance}")
result = execute_taxcalc(guidance)
print(f"Result: {result}")
visualize_results(result)
elif choice == '2':
print("Chat History:")
for prompt, response in chat_history:
print(f"User: {prompt}")
print(f"Assistant: {response}")
print()
elif choice == '3':
configure_taxcalc()
elif choice == '4':
print("Exiting...")
break
else:
print("Invalid choice. Please try again.")
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