Tax experts, like EY’s Stephan Kuhn, have noticed some big changes in their industry:
‘There is a global trend towards transparency in tax matters… companies will have to start thinking now about how they will collect the data that may be required to be produced, and how they will explain it to tax officials.’
The world of taxes is becoming more and more transparent. 87 percent of senior executives expect tax work to snowball as a result, which represents a significant increase in their workload.
AI is becoming more transparent, as well. It has the potential to lighten that load by collecting the data. With black-box AI attracting increasing criticism, it's becoming important that it can explain itself, too. 80 percent of people still don’t trust AI with their money, though. Are they right, or can we trust AI to do our taxes?
Trust it with the taxing busywork
Letting AI do your taxes is not as drastic a step as it may seem. It definitely doesn’t mean replacing tax professionals, for starters.
One of the biggest impacts that AI could have on the world of tax lies in its ability to automate repetitive jobs. Things like tax classification take up valuable hours that could be spent working through thornier, more creatively-driven issues.
A set of rules govern taxation. Professionals can ‘teach’ these rules to a machine-learning algorithm, which can then apply them. The rise of Explainable AI (XAI) brings with it an added layer of confidence. Anything unusual that sits in a tax ‘grey area’ can be flagged to a specialist, and the AI can explain how it got to that conclusion. This can be reviewed, and then corrected or accepted. Every time a correction is made, the AI becomes better at its job.
AI is more accurate and more detailed
When it comes to processing information and recognising patterns, AI has the upper hand. What might take a tax expert several weeks to work through can be collated by AI almost instantaneously. A truly valuable AI accountant will have been built using expert input, making it as trustworthy as the professionals who ‘taught’ it.
As Bjarne Berg, leader of advanced tax analytics at PwC’s US Tax Group says:
‘…instead of your legal team spending hours poring over a 500-page sales contract, an AI tool will be able to do the same job in a matter of seconds, determining whether the document contains any thorny legal problems or taxation risks.’
Berg’s statement gets to the core of what it means to trust AI with taxes. It’s not about handing over the reins completely, it’s about using the technology as a tool. AI can process and make predictions for us on a far more granular level than even the most efficient tax professional, and the truly valuable platforms can explain why and how they've done it. It isn’t making the decisions for us, though; it’s giving us access to insights and data analysis that would previously have taken hours to gather, so that we can make more informed choices in a fraction of the time. With explanation to back up the numbers, it becomes easier and easier to hold the technology accountable.
Industry leaders like Deloitte, PwC and H&R Block are already making use of AI to cut down on repetitive work and boost their productivity. Where these organisations go, others soon follow. Trusting AI to help with your taxes may soon become a competitive necessity.