You Should Think Twice Before Asking AI To Help You Do Your Taxes, Here's Why
As Artificial Intelligence programs continue to learn and develop, the list of their uses is growing by the minute, and these days, even tax preparation services are integrating AI into their interfaces. That includes both H&R Block and TurboTax, as each now prominently features ChatBot assistance within their software.
Such tax preparation services are, of course, utilized by millions of professional and non-professional users to file taxes. Those who utilize TurboTax and H&R Block know that those AI bots have been around via chat bubbles for the last couple of years. But this year, those bots have been tasked more than ever with helping users find answers to some genuinely tricky tax prep questions.
Some users are likely happy to let AI lead the way in sorting through the nerve-wracking process of filing yearly taxes. It's a safe bet, however, that many are far more wary of allowing AI to lord over matters that could land them in trouble with the IRS, and given how AI is performing to date, it's hard to argue the latter group's logic. Here's why you should think twice before letting an AI bot do your taxes.
AI is a mixed bag when answering important tax questions
As rapidly as generative AI is advancing, the tech is not yet in a place where a bot can simply do your taxes for you. But services like TurboTax and H&R Block are utilizing the technology to help users answer questions about deductions, declarations, and credits, among other things. That means AI has as much control over your tax filings as you're willing to give it.
Per some reports, you may want to set restrictions on how much advice you seek from bots when preparing to file your taxes, as AI assistants are reportedly struggling to provide accurate answers to many of the questions they are being asked. The Washington Post even went so far as to prepare an actual test for H&R Block's AI assistant, claiming that it provided questionable answers to about 30% of the posed questions and had little understanding of the IRS's guidelines concerning cryptocurrency.
Such numbers would seem to bolster the concerns some users have about using generative AI during tax prep, particularly as filing your taxes with inaccurate information can lead to an IRS audit, financial penalties, or worse, and there's little chance that auditors will be giving free passes due to AI misinformation or hallucinations. To that point, H&R Block bosses acknowledged to WaPo that the technology is still in the early stages of development and are encouraging users to double-check any advice provided by AI assistants.
Sharing info with an AI bot can also be a risky endeavor
On top of the potential for generative AI to provide misinformation that could result in an IRS audit or other penalties, there are also privacy concerns to consider when utilizing such programs when preparing your taxes. You are, after all, required to input all manner of Personal Identifiable Information (PII) into your tax forms when preparing to file them, including your name, address, social security number, personal income, and other sensitive financial figures.
You are, of course, required to provide that info with any tax prep program, whether it includes an AI assistant or not. But it seems unlikely that an AI bot would prompt you for such information or that a user would need to supply it in the course of asking a question. Moreover, there's been no indication that AI bots utilized by tax prep services are collecting such sensitive information or that they even have access to it.
Nonetheless, privacy concerns over generative AI have grown enough that they're being addressed at the top levels of government, and some tax services have already been put on notice for sharing client information with third parties. Given the stakes, it's easy to understand why someone might be wary enough of putting an AI bot in charge of any tax-related doings to instead talk matters over with a real-life tax professional.