The Interception of AI and the Tax Sector – What You Need to Know

By now, you probably have heard of or encountered some form of artificial intelligence (“AI”), which appears to be rapidly expanding globally. AI's application in tax preparation also seems to be growing. With growth, comes growing pains and learning curves; even though using AI to analyze vast volumes of tax data has advantages in terms of reducing human error, recognizing patterns, and increasing efficiency. The intriguing aspect of the learning curve, as it relates to tax preparation, is that AI most depends on access to data pools which present security challenges and additional levels of complexity. Additionally, research shows that there are different types of AI models, including generative, limited, reactive, natural language, narrow, speech recognition, reinforcement, etc. which should be considered when determining how it will best serve tax clients.

As AI continues to develop, so too must tax professionals and their plans for using it; it must be done securely, accurately, responsibly, and encrypted, with internal security measures in place to keep data safe. Once this has been established, use of AI will enhance client relationships, assist tax professionals in identifying consequences sooner, modernize internal processes, lower errors, and increase the overall effectiveness of services rendered to clients. This is not to suggest that tax professionals' valuable labor and expertise may be replaced by AI. Perhaps, to some extent, AI can open the door for tax professionals to concentrate on higher-value tasks while leaving the mundane tasks to AI.

The use and protection of AI in the tax professional world is no doubt a hot issue to be considered upon thoughtful review and in conjunction with the relevant and evolving professional standards and codes of conduct determined by state and local regulatory and licensing bodies, including, but not limited to, the  AICPA, State Bar, American Bar Association, IRS Office of Professional Responsibility and Circular 230.

To find out more about how Wilson Tax Law Group, could help with your tax litigation and defense needs, we invite you to set up a  consultation with our firm.

Wilson Tax Law Group, APLC is a boutique Orange County tax controversy law firm that specializes in representation of individuals and businesses before federal and state tax authorities with audits, appeals, FBAR, offshore compliance, litigation and criminal defense.  Firm founder, Joseph P. Wilson, is a former Federal tax prosecutor and trial attorney for the IRS and California Franchise Tax Board.  Wilson Tax Law Group is comprised of former IRS litigators & Special Agents, and Assistant US Attorneys from the US Attorney’s Office, Central District of California, Tax Division, which at the time handled both civil tax lawsuits and criminal tax prosecutions on behalf of the United States of America.

For further information, or to arrange a consultation please contact: Wilson Tax Law Group, APLC

Tel: (949) 397-2292 (Newport Beach Office) 

Tel: (714) 463-4430 (Yorba Linda Office)