Shortly after I started at High Rock, Liz asked me a question I haven’t ever really considered before: would self-aware robots have to pay income taxes? I grew up loving characters from movies such as Sonny from I, Robot, C3PO and R2D2 from Star Wars, and Bender from Futurama, so this question intrigued me, and I figured I would give some more thought to the topic.
I should clarify what I mean by the term self-aware. According to Marriam-Webster’s Dictionary, the definition for self-awareness is “knowledge and awareness of your own personality or character.” Another disclaimer I should make is I am only looking at whether the self-aware robots would have to pay U.S. income taxes.
Now comes something that should be considered: would these self-aware robots (let’s call them SARs) be owned by people, or would they act as new “people”, free to do whatever they wish? I ask this because it is important to how the SARs would be treated on a tax basis. Since I am not really sure which category they would fall in, I would like to talk about both, and the possibilities each option presents.
I’ll start with them being owned by another person or business entity, because this is an easier determination. If they were owned by another, they would be treated as personal property. As a comparison, even though dogs and cats are our pets and living creatures that have feelings, they are still considered personal property. The same can be applied to these new SARs that would be aware of themselves, have personalities, and would become a part of our society. Thus, any income a SAR would generate would be income belonging to the owner, and the owner would be taxed for it.
On the other hand, let’s say that these SARs are considered individuals, and aren’t owned by anyone. According to Publication 501 of the IRS, those who must file depends on the following: have to be either a U.S. citizen or resident alien, how much gross income was made during the year, what their filing status is, how old they are, and whether or not they are a dependent (IRS Pub 501, pg 3). The thing that catches my eye is the requirement of being a U.S. citizen or resident alien. In order to be a U.S. citizen, you must meet one of the following requirements: be born in the U.S., have a parent or parents who are U.S. citizens at time of birth, apply for “derived” or “acquired” citizenship through parents, or apply for naturalization.
Would an SAR be considered “born” when it is put together, or first “turned on”? Would it have “parents”, and who would they be? Technically, the people who created the SAR would be its parents. What if the SAR was put together by other machines? The programming that runs the SAR would have to be done by another person, or software developed by another person, and thus someone would have been the causing factor for the creation of the mental abilities or assembly of the SAR, and be considered the parent or parents. If the SAR was considered to have U.S. citizenship, then it would be put through the other tests to determine if they must file a tax return, just like everyone else.
All of this speculation is done using existing laws, and doesn’t take into account any laws that may be passed in the future. This would be easy if there was a law passed that answered this question. In the TV show Futurama, the SAR Bender is said to have “declare[d himself] dead… as a tax dodge” (Episode: The Route of All Evil). If Bender has to pay taxes, I don’t see why laws wouldn’t be made to tax revenue earned by SARs considered to be individuals in the future.
http://220.127.116.11/wp-content/uploads/2017/07/hra-logo3.png00High Rock Accountinghttp://18.104.22.168/wp-content/uploads/2017/07/hra-logo3.pngHigh Rock Accounting2016-06-15 21:14:392017-07-14 22:09:22DO ANDROIDS DREAM OF ELECTRONIC TAXES?
WE ARE EVERYWHERE
Our technology enables us as well as our clients to build their business anytime and anywhere in the world.
7802 East Gray Road, Suite 600
Scottsdale, AZ 85260