Welcome to the She Writes AI interview episodes covering our second book collaboration stream for the AI Everywhere series. For this new cohort, we are exploring the personal journeys and professional expertise of 32 authors from 18 countries worldwide who are redefining our relationships with machine intelligence. If you’re new to SheWritesAI, welcome! We’re a free, inclusive community of 750+ women and nonbinary writers in 60+ countries worldwide, with a focus on AI and data. Allies of all genders are welcome. Learn more: About | Books | Categories | Directory | Digests | Donate | Herstory | Join | Subscribe | Updates | Welcome | World Map For more insights from interviewer Farida Khalaf, see her Lights On by Farida newsletter or youtube.com/@faridakhalaf25. About My Guest: Marcela Distefano Today I (Farida Khalaf) am joined by Marcela Distefano, a data scientist and public accountant working directly inside the Argentine tax administration. Holding a Master’s degree in Data Mining and Knowledge Management, Marcela operates at the critical intersection of algorithmic design, fiscal policy, and institutional governance. Through her work and her writing on her newsletter Ethics, life and AI, she brings an essential insider's perspective to how automated systems affect individual lives when deployed by state authorities. Her central thesis is that tax authorities hold unique, non-voluntary power over citizens, and when algorithms are deployed without democratic oversight, technical design decisions secretly transform into unchecked administrative power. In this interview for our second book collaboration, Marcela Distefano delivers a sobering critique of the rapid adoption of artificial intelligence across global tax agencies, where 70% of member nations of the OECD Forum on Tax Administration already deploy AI tools. She contrasts the voluntary nature of commercial platforms with state tax power, where citizens cannot opt out or switch service providers. Marcela analyzes two major algorithmic failures: the Dutch childcare benefit scandal (Toeslagenaffaire), which devastated 26,000 families over dual-nationality risk profiling, and an IRS audit model in the United States that audited Black taxpayers at rates 2.9 to 4.7 times higher than non-Black filers due to flawed optimization metrics. To prevent automated injustice, she presents a framework of democratic accountability, demanding pre-deployment impact assessments, meaningful rights to explanation, and hard legal constraints on proportionality. Live Session With: Marcela Distefano Below is a summary of Marcela Distefano’s live video interview with Farida Khalaf on her chapter: When The Algorithm Decides: The Urgent Case For Ethical Guardrails In AI-Driven Tax Administration. Intended Audience: Tax professionals, public administrators, policymakers, regulators, data scientists, AI practitioners, and any citizen who pays taxes and has a stake in how state power is exercised in the digital era. “An algorithm that cannot be explained cannot be contested. And an algorithm that cannot be contested is not a tool of a rule-of-law state, it is a tool of raw administrative power.” - Marcela Distefano Points discussed in the video * The Involuntary Relationship: You contrast AI in the private sector (like Netflix or banking) with AI in tax administration. Why does the mandatory nature of our relationship with the government make the ethical stakes of these algorithms so much higher? * The Dutch “All-or-Nothing” Rule: In the childcare benefit scandal, a minor clerical error could trigger a demand for the total repayment of years of benefits. How did the introduction of an algorithm turn this “legal trap” into a disaster for 26,000 families? * The Trap of Proxy Variables: Neither the Dutch nor the US systems were explicitly programmed to look at race or nationality, yet both produced discriminatory outcomes. Can you explain how “proxy variables” allow machines to discriminate without “knowing” they are doing so? * Performance Metrics vs. Fairness: The IRS audit disparity arose because the model was optimized to “find errors as cheaply as possible” rather than maximizing revenue. Why is the choice of a performance metric a governance decision rather than just a technical one? * Fault Line: Opacity: You argue that when no one can explain how a system reached a decision, responsibility “dissolves into the machinery.” How does this lack of accountability undermine the rule of law? * Concentrated Harm: Why are the populations with the fewest financial and social resources consistently the ones who bear the heaviest burden when these algorithmic systems fail? * Impact Assessments: You suggest that an impact assessment before deployment doesn’t require a data science team, but a “political decision to ask.” What are the basic questions every institution should be required to answer before turning an AI system on? * The Right to a Meaningful Explanation: You advocate for a concrete statement a person can actually use to defend themselves. Why is a technical document insufficient for a citizen facing a life-altering tax decision? * Proportionality as a Hard Constraint: How can we legally require automated enforcement to be proportionate to the severity of an error, ensuring a missing receipt isn’t treated the same as criminal fraud? * The Vantage Point from Within: As a data scientist and public accountant working inside a tax administration, how has seeing the daily reality of these systems shaped your mission for public accountability? “When a government institution deploys an opaque algorithm against citizens with no mechanism for explanation, no check on discriminatory outcomes, and no constraint on disproportionate punishment, it is not making a technical error. It is making a governance choice.” - Marcela Distefano Why This Matters Marcela Distefano’s perspective highlight the importance of accountability. * Non-Voluntary Power: Unlike commercial software where users can change providers, tax authorities hold non-voluntary power, immense personal data, and the ability to freeze assets or demand repayments without citizen opt-out options. * The Dutch Toeslagenaffaire Disaster: A self-learning risk algorithm used dual nationality as a statistical fraud indicator. Coupled with an “all-or-nothing” legal rule, it wrongly demanded full benefit repayments from 26,000 families, causing widespread financial ruin and forcing the resignation of the entire Dutch cabinet in 2021. * The IRS Audit Disparity: In the US, an automated scoring model optimizing for cheap error detection ($30 correspondence audits) repeatedly targeted Earned Income Tax Credit (EITC) claimants. Because of structural economic disparities, Black taxpayers were audited at rates 2.9 to 4.7 times higher than non-Black taxpayers without anyone explicitly programming racial parameters. * Three Core Fault Lines: Algorithmic catastrophes in public administration consistently stem from opacity without accountability, proxy discrimination without detection, and harm concentrated on vulnerable populations who lack resources to fight back. * Concrete Protection Guardrails: Protecting citizens requires three non-negotiable standards: mandatory pre-deployment algorithmic impact assessments, enforceable rights to an understandable explanation, and proportionality constraints so minor filing errors do not trigger ruinous penalties. Thank you, Marcela Distefano, for providing such a clear, courageous, and vital framework for safeguarding human rights in automated governance. For every policymaker, technologist, and citizen navigating the rise of algorithmic state power, her chapter in AI Everywhere is an indispensable blueprint for democratic accountability. Marcela reminds us that algorithms are not neutral tools, but direct reflections of the values and optimization targets chosen by the people who build them. Her final message is an urgent call to action: we must mandate fairness, transparency, and human oversight before turning computational power against the public. I highly recommend following her work and subscribing to her Newsletter, Ethics, life and AI, where she continues to champion algorithmic ethics and public accountability. And if you’re interested in more conversations like this, consider subscribing to She Writes AI. I’ll continue sharing insights from the voices shaping the future of AI, including contributors from new chapters in AI Everywhere from the book2 collaboration stream, where 32 women from across five continents explore how artificial intelligence is changing the world we live in, and how we can change it for the better. References For more insights on the book, see aiEverywhereBooks.com, our beautiful book series website created by Blessing Okpala, PhD (now updated with previews for stream II): Where To Buy, How To Read and Listen, Ways To Review * Buy Volume 1 (now in ebook and print on Amazon, Gumroad, Lulu, Ingram Spark, and many reading platforms) * Tips from our publisher on how to buy an Amazon ebook from a country that isn’t a ‘KDP marketplace’, and how to read the ebook without a Kindle device (free) * Look for our new abridged audiobook edition! * Review links for Volume 1 (we’re on Amazon, Goodreads, and Storygraph) Ways To Support To help cover book-related costs (ISBNs, proof copies, etc.) as well as other SheWritesAI community services, we follow the Wikipedia model. We are now accepting donations via one-time tips worldwide through Stripe (‘digital ink’) or Gumroad. We can also accept paid subscriptions in some geographic regions (limited due to tax complications that we hope will be resolved soon). All donation sizes are welcome and help keep these book authoring opportunities free for She Writes AI Community members worldwide! Patrons and Sponsors are acknowledged on our book site. Learn more. Thanks as