As AI continues to advance, the tax preparation industry may be in for a wild ride. With the ability to process vast amounts of data and make calculations faster than a team of accountants, these machine-learning monsters may make tax season a breeze for some, but spell doom for others. Imagine a world where you can just snap a picture of your receipts and let an AI do the heavy lifting, leaving tax preparers out of a job. But beware, these intelligent machines may also come with their own set of dangers. They may make mistakes, like claiming deductions you’re not entitled to, or even worse, they could be hacked by cybercriminals looking to steal your personal information. So while the idea of having an AI do your taxes may sound appealing, it’s important to proceed with caution.
Human hands didn’t write that last paragraph. Artificial intelligence did – specifically, the ChatGPT bot that’s taking over the internet. ChatGPT can answer questions, write essays, debug computer programs, take tests, and even compose music. You can ask it to write a story about Marion Barry and Mickey Rourke trying to score drugs on a Saturday night in Kowloon City, and you’ll get a noir tale of neon lights, crowded streets, and sketchy back-alley deals. It won’t be Hemingway. But criticizing the bot for predictable plotting and weak character development is like watching a beagle do long division and nit-picking that he slobbered all over the paper. It’s a beagle. Doing long division.
How close are we to AI automating tax preparation? We’re not at the point in Jurassic Park where the velociraptors learn how to open doors. Not yet. But we can hear them sniffing around in the next room. They know we’re in here. They smell our fear. And they’re hungry.
The ChatGPT story raises all sorts of tax questions. For starters, how will tax professionals keep busy when AI spells doom for the H&R Blocks of the world? And second, how will Uncle Sam replace the tax revenue he loses when AI destroys everyone else’s jobs?
The tax pros who survive the AI storm will be the ones like us who go beyond just putting the right numbers in the right boxes on the right forms. Tax planning, business consulting, and family office services are all more valuable things that we can do to help you achieve your financial goals. Ultimately, our real objective isn’t just to help you pay less tax. It’s to help you accomplish your financial goals with the least possible interference from taxes.
As for the second question, Microsoft founder Bill Gates has one proposal for robots that we can probably extend to AI. Gates knows a thing or two about taxes – he reports paying over $10 billion in his lifetime. Gates once proposed that companies using robots should pay a tax similar to what the people they replace would have paid. But calculating that sort of replacement value will be harder with AI. It’s easy enough to calculate how many pairs of hands a robot replaces. But software applications like ChatGPT have a wider range and are more scalable. Maybe the solution is to just ask the AI how much it should pay!
Here’s one thing we can safely assume. When Skynet becomes self-aware, AI won’t be any happier about paying taxes than we are. That probably means we’ll need to learn planning strategies to help it pay less, too. At that point, we’ll hold the fate of humanity in our hands. Wish us luck!