TurboTax and H&R Block started using artificial intelligence (AI) chatbots to give tax advice. The potential results? Dramatically inaccurate tips that could lead to an audit. Consider this your reminder to rely on real CPAs.
Washington Post reporter Geoffrey A. Fowler decided to put TurboTax’s “Intuit Assist” and H&R Block’s “AI Tax Assist” to the test with the help of two wealth advisors. The cohort determined that TurboTax got more than half of the 16 questions the reporter asked wrong, and H&R Block gave incorrect answers 30% of the time, including “confidently recommend[ing] an incorrect filing status and erroneously describ[ing] IRS guidance on cryptocurrency.”
Out of curiosity, we experimented with the popular generative AI tool ChatGPT ourselves. Some of the answers to simple tax questions we asked were outdated and/or based on regulations from outside the U.S. More disturbing is that spotting these inaccuracies is difficult if you don’t have a tax background.
“The companies appear to have a different bar than I do for what’s responsible,” Fowler writes. “They think it’s okay to give some people bad answers so long as some people get good ones and the system continues to improve. In other words, we’re their guinea pigs.”
Similarly, the City of New York’s chatbot was recently caught telling local businesses to break the law in various employment and ordinance areas. Citing disclaimers posted with the tool, officials didn’t feel it necessary to take down the chatbot when they learned of the bad advice.
The disclaimers these AI tools use absolve them from wrongdoing if you file your taxes incorrectly based on their advice. Any inaccuracy penalties or even criminal charges brought about by your actions based on their advice are your own responsibility to bear. The same can be true for working with a CPA but with a significant difference: A CPA may also face fines or even legal or professional consequences, so they have considerable motivation to be accurate. A CPA can also represent you in an audit or investigation.
Plus, AI tools still have a long way to go before they can effectively weigh individual circumstances and give customized advice. “Despite efforts to ensure accuracy, these AI assistants may encounter difficulties interpreting complex tax laws correctly or considering unique circumstances that could impact a taxpayer’s return,” explains the IRS’s Taxpayer Advocacy Service.
These AI tools may offer convenience and speed but cannot replace human expertise and judgment regarding complex and personal matters like taxes. Feel free to contact us with questions.
