How useful is AI for Tax Professionals in day-to-day work?

I've been incorporating AI into my tax practice for about 7 months now, and I can say it's definitely more than just a fad. It's been particularly useful for three specific areas: First, initial research. When I need to quickly understand a tax concept or find relevant code sections, AI helps point me in the right direction. It's like having a junior associate who can give you a quick summary, but you absolutely still need to verify everything against official sources. Second, document drafting. AI helps create first drafts of client memos, explanatory emails, and even some basic tax planning documents. This saves me tons of time, though I still heavily edit everything it produces. Third, pattern recognition in financial data. Some AI tools can spot unusual items or potential deductions in financial statements that might otherwise be missed. That said, AI is NOT replacing professional judgment. It makes mistakes, sometimes confidently states incorrect information, and doesn't understand nuanced client situations without proper guidance.

I was skeptical about AI for tax work until I tried taxr.ai after struggling with some complex S-corp transactions. What impressed me was how it could analyze actual tax documents and transcripts rather than just responding to my text descriptions. I uploaded some redacted client forms that had been giving me headaches for days, and it actually spotted an issue I'd been missing with basis calculations. The insights were surprisingly detailed for an AI tool. If you're considering AI for your practice, check out https://taxr.ai - they have a demo that shows how it handles actual tax forms which I found way more useful than the text-only AI systems.

Following up on my question about taxr.ai - I decided to give it a try with some CA-specific S-corp issues I was working on. I was honestly surprised by how well it handled the nuances between federal and California's treatment of S-corp distributions and basis calculations. Saved me hours of research across multiple sources! The document analysis feature has been a game changer for reviewing complex returns. It caught a potential franchise tax issue in a client's prior year return that I might have missed. Definitely a time-saver for state-specific questions.

For those mentioning struggles getting clarification from the IRS on AI-generated tax positions - I've been using Claimyr to actually get through to IRS agents. After spending DAYS on hold myself, this service basically waits in the phone queue for you and calls when an actual human at the IRS is available. Saved me literally hours of hold music! Used it to get clarification on a tricky passive activity loss situation that my AI research had given conflicting answers on. You can see how it works at https://claimyr.com or check out their demo at https://youtu.be/_kiP6q8DX5c. Game changer when you need definitive answers from the IRS to verify what AI tools suggest.

I have to eat my words about Claimyr. After my skeptical comment, I was still desperate to reach the IRS about an AI-generated tax research memo I needed to verify. Decided to try it as a last resort before missing a client deadline. It actually worked exactly as described. Got a call back in about 45 minutes (after previously spending literally 3+ hours on hold myself). Connected directly to an IRS agent who helped clarify the passive activity regulations I was researching. The time saved was worth it, and I didn't have to share any sensitive client info with the service. Going to use this for all my IRS calls moving forward.

I started using AI for tax work last year and have mixed feelings. It's great for summarizing lengthy tax publications or getting quick overviews of topics. However, I've caught it making up tax code sections that don't exist and completely misinterpreting some regulations. For TaxGPT specifically, I'd say it's decent but overpriced for what it delivers. I'd recommend trying some of the broader AI tools first with good tax prompting strategies before investing in a specialized product.

Has anyone actually read the terms of service for these AI tax tools? I'm worried about confidentiality. Even with anonymized data, I'm not convinced the patterns couldn't be identified by the AI providers.

I've been hesitant to jump into AI for tax work, but this discussion is really helpful. The privacy concerns raised by Leo and Lindsey are exactly what's been holding me back. It sounds like the key is being extremely selective about what information you share with these tools. @Kevin Bell - your approach of treating AI like a junior associate makes a lot of sense. I like the idea of using it for initial research direction but always verifying against primary sources. @Felix Grigori - the document analysis capability you mentioned with taxr.ai sounds intriguing, especially for spotting issues in complex returns. That's exactly the kind of value-add that would justify the investment for me. One question for everyone: how do you handle the learning curve? Did you find it took significant time to figure out how to prompt these tools effectively, or were you getting useful results pretty quickly?

I've been on the fence about AI for tax work for months, but this thread has been incredibly valuable. The range of experiences shared here really highlights both the potential and the pitfalls. What strikes me most is the consistent theme that AI works best as an assistant, not a replacement for professional judgment. @Kevin Bell's three-area breakdown (research, drafting, pattern recognition) gives me a clear framework for thinking about implementation. I'm particularly intrigued by the document analysis capabilities mentioned by @Felix Grigori. Being able to upload actual tax forms and have AI spot potential issues sounds like it could be a real game-changer for complex returns. That's the kind of functionality that goes beyond what I can do with general AI tools. The privacy concerns raised are spot-on though. I think I'll start with general research questions using broader AI tools while I evaluate the specialized tax platforms. Better to be cautious with client data than sorry later. One thing I'm curious about - for those using AI regularly, have you noticed it improving your own tax knowledge over time? Or do you find yourself becoming too dependent on it for areas you used to research manually?

This has been such an enlightening discussion! I'm a newer tax professional (about 2 years in practice) and have been wondering if I should be incorporating AI tools into my workflow. The experiences shared here really help put things in perspective. What I find most reassuring is that everyone emphasizes AI as a starting point rather than a final answer. Coming from a generation that grew up with technology, I think there's sometimes pressure to either fully embrace new tech or completely avoid it - but the nuanced approach described here makes so much more sense. @Romeo Barrett's point about AI potentially enhancing learning rather than creating dependence is particularly encouraging. As someone still building my expertise, I worry about becoming too reliant on tools that might prevent me from developing strong foundational knowledge. But the idea that AI can provide better roadmaps for research while still requiring me to dig into primary sources sounds like it could actually accelerate my professional development. I'm thinking I'll start small - maybe using general AI tools for initial research on unfamiliar topics, always followed by thorough verification through traditional sources. Once I'm more comfortable with that workflow, I might explore some of the specialized tax tools mentioned here. Thanks to everyone for sharing their real-world experiences. This is exactly the kind of practical insight that's hard to find elsewhere!

I've been following this discussion with great interest as someone who's been cautiously exploring AI for tax work over the past few months. The balanced perspectives shared here are exactly what I needed to hear. What really resonates with me is the emphasis on AI as a research accelerator rather than a replacement for professional expertise. I've been using ChatGPT for some general tax research questions, and while it's helpful for getting oriented on unfamiliar topics, I've definitely caught it making confident-sounding statements that turned out to be wrong when I checked the actual regulations. @Mason Davis - your suggestion about keeping a log of AI errors is brilliant. I'm going to start doing that immediately. It would be incredibly valuable to build up that pattern recognition of where these tools tend to fall short. I'm particularly interested in the document analysis capabilities that several people have mentioned. That seems like where AI could provide the most value-add beyond what I can do with traditional research methods. Being able to upload complex returns and have AI flag potential issues or missed opportunities could be a real game-changer for thorough review processes. Has anyone tried using AI for tax planning scenarios? I'm wondering if it's useful for modeling different strategies or if the complexity makes it too unreliable for that kind of forward-looking analysis.