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From smartphones to social media algorithms to virtual assistants, artificial intelligence (AI) has permeated nearly every aspect of our lives, even taxes. Yet the advice you get from an AI chatbot may not be as good as you think. In fact, AI is a rapidly evolving new technology and may not be able to provide accurate answers to your complex tax questions.

AI refers to the simulation of human intelligence processes by machines, especially computer systems. In the context of tax preparation firms, AI is used to automate various aspects of tax filing, including data entry, calculations, and even providing recommendations for deductions and credits based on the taxpayer’s answers to questions.

Recently, some leading tax preparation firms have taken AI even further, offering generative AI assistants, often referred to as AI chatbots, that answer a variety of tax-related questions. A chatbot is a computer program that simulates a conversation with human users. Some chatbots, such as those currently deployed by the IRS, provide users with canned responses, while AI chatbots can generate responses based on user input and can tailor responses to the specific scenario or query. Generative AI chatbots are constantly evolving and learning from user input and feedback.

The knowledge base for AI assistants used by tax preparation firms generally consists of current tax laws, regulations and IRS guidance, as well as information from the firm’s own tax preparation experience, and is reviewed by accountants and tax law experts. Despite best efforts to be accurate, these AI assistants may have difficulty correctly interpreting complex tax laws or considering special circumstances that could impact a taxpayer’s tax return. Therefore, taxpayers should not rely solely on AI-generated tax advice.

A recent informal investigation by The Washington Post found that chatbots at two leading tax preparation firms provided inaccurate or irrelevant answers up to 50 percent of the time to 16 complex tax questions. Both companies note on their websites that the assistants are still learning and that users should verify the information provided.

Although AI can be a useful tool to simplify the entire tax filing process, taxpayers should not rely on AI-generated answers to complex tax questions. Taxpayers should be vigilant when using tax filing software and ensure they understand the limitations of AI-generated advice. Taxpayers are ultimately responsible for the information provided on their tax returns, so it is important to carefully review all information, double-check calculations, and seek help from qualified professionals when necessary to ensure compliance with tax laws and regulations.

If you need help choosing a tax preparer, the IRS website has information about the different types of preparers and their qualifications.

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