In the past week, we’ve seen two titans of tech, Elon Musk and Mark Zuckerberg spar on Twitter over the continued emergence of Artificial Intelligence (AI) and its eventual impact on our lives. From watering one’s garden to automated trading, AI has become a buzz-term and holds importance in understanding our future. Without having visited the future, not even the masters of the futures two giant companies can be sure of what’s to come as we choose to rely more and more heavily on computer-powered systems.
H&R Block partnered with IBM Watson (the bodiless AI program of Jeopardy fame) last year to spread its computational capabilities and powerful algorithms in 10,000 of its U.S. locations. The system, of course, is not the full-fledged Watson system and was simply utilized to help H&R Block employees to find and recommend tax credits and deductions, so there is little fear of a full world takeover by these tax robots. But we still ask, how far will AI go? Who’s to say companies like H&R Block or Turbo Tax won’t build the technology to completely replace the need for your local tax preparer? A recent Price Waterhouse Cooper report suggests AI tools could potentially replace basic capabilities performed by new or semi-new tax associates.
The report suggests AI will be able to discover the best tax outcome and method of tax preparation for large company taxes, individual tax returns, or even partnership tax prep. These systems can take advantage of any available data and use it to optimize effective tax rates (ETR) and tax efficient preparations.
Will tax preparers be a thing of the past? Will your tax resolution issues be resolved in near identical ways to the building of your car? We don’t think so. AI can do a lot but here are some things it can’t do:
- Provide taxpayer representation to the Internal Revenue Service
- Provide the personal and emotional answers that tax payers have
- Provide the human, simple english description
- Provide personalized customer service
What are the benefits of adding AI to a Tax Preparer’s arsenal?
H&R Block may have a small advantage in being first to market, but dozens of companies, extant and upstart alike, are learning from IBM and H&R Block and building strong tax preparation and resolution tools that can be utilized by tax professionals. And it doesn’t mean all hope is lost for smaller tax preparation firms.
Simply from data made available to the IRS through these systems, tax codes and tax reform could become an easier and more manageable topic of discussion. From personal, historical data from individual tax returns, IRS Customer Service stands to increase, as well as the department’s ability to efficiently and accurately provide tax advice.
Price Waterhouse Cooper’s tech lead Michael Shehab states, “What has been missing in this industry for a long time, and what we’re really focused on, is not just delivering a tax return but delivering the analytics associated with the tax return. We’re trying to make the tax return preparation process more efficient, but we’re also trying to make it higher value added rather than simply delivering a tax return.”
Second, there’s a lot of time that could be saved with AI as your tax assistant. Categorizing and processing information that has different formats, statistical modeling, tax research, generating K-1 schedules, etc. Using AI to automate repetitive tasks could help tax preparers elevate themselves to do more reviewing rather than being bogged down with data and paperwork each season. This could have huge impacts at the corporate level when there’s a lot more data to deal with.
While we wait to see what the future of Tax Technologies can create, and how our tax firm can help you to benefit them, Professional Tax Resolution is dedicated to finding the individual approach to tax planning that is best for you, if you have tax question or a tax debt you are unable to pay, our experienced tax settlement professionals are happy to discuss your tax resolution options free of charge. For more information about our services, visit us today at www.professionaltaxresolution.com or call us at 877.889.6527. Our CPAs, Enrolled Agents and other skilled accountants have a thorough understanding of tax law together with the experience necessary to know which tax settlement optionwill be the best fit for your specific set of circumstances.