Artificial intelligence tools have arrived in tax practice, and they are changing how both practitioners and clients approach tax planning and compliance. Recent research indicates that roughly 6 percent of corporate work product now consists of material generated by AI that contains significant errors or omissions despite appearing credible on its face. Tax practitioners must understand how this technology affects their practices from two critical angles: using AI effectively in their own work and identifying problematic client submissions created with AI assistance.
AI chatbots can now help clients identify tax planning strategies that they may not have otherwise known about. In one example where AI recommended an opportunity zone investment, the chatbot provided accurate information about the basic structure and investment timeline. However, it completely failed to mention the documentation requirements for the working capital safe harbor provision. Without this critical piece, the entire strategy would have failed under IRS scrutiny. This is the fundamental problem with AI in tax contexts: it understands concepts but misses the procedural safeguards that make those concepts compliant.
AI-generated materials look reasonable to clients who lack technical expertise. They use proper terminology and appear detailed. But they systematically omit the procedural requirements, documentation standards, timing rules, and safe harbor provisions that determine whether a tax position actually works. This creates a concerning quality of work that would never pass review by a competent professional but appears legitimate to the untrained eye.
For practitioners, this technology presents both challenges and opportunities. You will increasingly encounter clients who arrive with tax strategies or return positions developed using AI tools. Your intake process must evolve to identify these situations early. Look for plans that demonstrate unusual sophistication in strategy but vagueness about compliance steps. Ask directly whether clients consulted AI tools during their research. When you discover AI-generated work, use it as a teaching moment. Walking clients through what the technology missed demonstrates your professional value more powerfully than almost any other interaction.
Practitioners also face decisions about incorporating AI into their own workflows. The technology can accelerate research and drafting when used properly. The key is treating all AI output as preliminary work requiring thorough professional review. AI excels at gathering information and creating initial drafts but consistently fails on technical details. Always verify regulations and citations, as AI sometimes invents plausible-sounding but nonexistent authorities. Never use AI for final work product or for complex compliance matters involving multiple steps.
The liability implications deserve careful attention. When you review and approve client work created with AI assistance, you assume responsibility for that work regardless of its origin. Document your review process carefully. When clients insist on filing returns based on AI guidance over your objections, memorialize your contrary advice in writing.
Forward-thinking practitioners can distinguish themselves by positioning themselves as experts who help clients use AI responsibly. The transition period we are experiencing now may define competitive advantages for years to come.
Christine Gervais is a licensed CPA, using her skills to help businesses grow and achieve their fullest potential. Christine has a Master’s degree in accounting from Southern New Hampshire University in addition to holding her CPA license for over a decade. Notably, Christine is a nationally recognized speaker providing education to other CPAs on how to best serve clients as well as instruction on a wide variety of topics for business owners on how to maximize success. Christine prides herself on the value she can bring to clients with her extensive tax knowledge and provides strategic, forward-thinking financial strategies to help clients grow. When not behind her desk, you can find Christine spending quality time with her daughter and stepson or tending to the family’s excessively loved farm animals.
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