Poster: zkTax: A Pragmatic Way to Support Zero-Knowledge Tax Disclosures

Abstract

Tax returns contain financial information of interest to third parties: public officials are asked to share financial data for transparency, companies seek to assess the financial status of business partners, and individuals need to prove their income to third-parties.Tax returns also contain sensitive data such that sharing them in their entirety undermines privacy.We outline how zero-knowledge cryptography may be applied to address this tension by allowing individuals and organizations to make provable claims about select information in their tax returns without revealing additional information, in a way that can be independently verified by third parties.We highlight key system goals and design specifications for this zero-knowledge tax disclosure system (zkTax) and present a prototype implementation.The prototype consists of three distinct services that can be distributed: a tax authority that provides signed tax documents; a Redact & Prove Service that enables users to redact tax documents and produce a zero-knowledge proof attesting the provenance of the redacted data; and a Verify Service to check the validity of claims.We demonstrate how zkTax could be implemented with minimal changes to existing tax infrastructure, allowing the system to be extensible to other contexts and jurisdictions.This work provides a practical example of how distributed tools leveraging cryptography can enhance existing government or financial infrastructures, providing immediate transparency alongside privacy without system overhauls.