Interpretive Divergence™

Canonical Definition

Interpretive Divergence™ is the gap between three things: the tax position selected by the taxpayer, the structured data representation of that position, and the interpretation the authority may ultimately apply. It is not only a legal risk. In a real-time tax environment, it becomes a data-design risk. A tax position that is correct in human reasoning may still fail in a real-time system if the invoice data, document category, tax code, transaction flags, contextual attributes, evidence trail and exception logic do not carry the position clearly enough to be understood from the outside.

— Nitin Agarwal, Tax Technology Architect