Much of the discourse surrounding the impact of artificial intelligence on tax preparation tends to remain at a high level. The specific day-to-day implications for the industry are often overlooked. How exactly will AI influence the ease or difficulty of tax preparation, and in what specific ways? What are the sentiments of industry professionals on the frontline?
John Dundon, an Enrolled Agent and president of Taxpayer Advocacy Services in Englewood, Colorado, expressed his apprehension, stating, “I’m terrified.”
On the contrary, Manasa Nadig, an EA and owner at MN Tax and Business Services in Canton, Michigan, views AI as a tool to enhance her practice. She mentioned, “I look at AI as a tool to enhance my practice,” and highlighted her gradual integration of automation and research processes. She emphasized that despite the capabilities of AI in preparing tax returns, the human touch provided by experienced advisors cannot be replaced.
Scott Kadrlik, managing partner at Meuwissen, Flygare, Kadrlik & Associates in Eden Prairie, Minnesota, acknowledged the inevitability of incorporating AI to meet the growing demand for services. He stated, “Whether or not you’re afraid of AI, we’re going to need it to meet the demand for services.”
Potential Benefits of AI
According to Wolters Kluwer’s report on a presentation at its CCH Connections User Conference, AI could offer several advantages for accounting and advisory firms, such as:
- Enhancing client relationships beyond annual engagements.
- Improving communication efficiency with clients.
- Automating tasks to save time and handle large datasets.
- Allowing more focus on in-person client interactions rather than solely on task completion.
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Morris Armstrong, an EA and registered investment advisor at Armstrong Financial Strategies in Cheshire, Connecticut, emphasized the importance of embracing technology to drive business transformation. He mentioned, “It’s evolutionary and yes, it will make a difference in how many firms do business. But they have to embrace the technology and make it work for them.”
Armstrong stressed the significance of training individuals to effectively utilize AI processes to enhance efficiency and overall performance.
Anticipated Impact and Challenges
AI is poised to significantly impact the allocation of time towards client advisory services and enhance profitability across various industries. Surveys indicate:
- Business owners are willing to pay a premium of 10% to 20% for advisory services.
- A majority of global CEOs foresee improvements in product/service quality, increased profits, and revenue growth due to AI.
- Concerns persist within the business community, with cybersecurity breaches being the top worry followed by misinformation spread and legal/reputational damage.
Embracing Change
The adoption of AI varies among practitioners, influenced by multiple factors including their field of practice. Some viewpoints include:
- Bruce Primeau, a CPA and financial planning consultant at Summit Wealth Advocates in Prior Lake, Minnesota, expressed confidence in the wealth management sector regarding AI.
- Dan Henn, a CPA in Rockledge, Florida, remains unfazed by AI, focusing on adding value to services that are less susceptible to automation.
- Manasa Nadig raised concerns about data security and the need for robust monitoring mechanisms to prevent misuse of confidential information.
In conclusion, the integration of AI in tax preparation presents both opportunities and challenges, urging professionals to adapt to technological advancements while remaining vigilant about potential risks and ethical considerations.
