As the tax deadline approaches, many filers are looking for assistance with their returns, and some are turning to chatbots powered by artificial intelligence. The use of AI chatbots for tax advice is becoming more popular, with a study showing that nearly 1 in 5 Americans trust AI chatbots like ChatGPT to review their income taxes. While there are benefits to using AI for tax guidance, experts warn that filers should proceed with caution when relying on generative AI for financial advice.
Although AI chatbots offer convenience and accessibility for taxpayers, there are potential risks associated with using this technology for tax assistance. One key concern is the accuracy of the information provided by AI chatbots. According to experts, AI chatbots like ChatGPT may not have the specialized knowledge required to provide accurate answers to specific tax questions. Filers may receive general information that is not tailored to their individual tax situation, leading to potential errors on their tax returns.
Furthermore, data security is another significant issue when using AI chatbots for tax assistance. Plugging sensitive financial information into these chatbots could pose a risk of data leakage, as highlighted by experts in the field of data science and artificial intelligence. While some chatbots may offer a level of protection for personal information, filers should still exercise caution when inputting data into these platforms.
The IRS and tax software companies have introduced AI chatbots to assist taxpayers with their returns. For instance, TurboTax has unveiled the generative AI-powered “Intuit Assist” chatbot, designed to help users with the filing process. Similarly, H&R Block has introduced the “AI Tax Assist” chatbot to assist DIY filers. While these chatbots aim to streamline the tax preparation process, experts caution that they may not be fully equipped to handle complex tax issues.
Additionally, experts have found that AI chatbots are still in the early stages of development and may not be ready to provide personalized tax recommendations. While there is potential for education and general tax information through these chatbots, filers should use them as a supplemental tool rather than a primary source of tax advice.
To mitigate the risks associated with using AI chatbots for tax assistance, experts recommend several precautions. It is essential for filers to verify the information provided by AI chatbots by cross-referencing it with official sources, such as the IRS website or a tax professional. Additionally, filers should be cautious when inputting sensitive financial information into AI chatbots and consider using general fact patterns instead of specific personal data.
While AI chatbots offer a convenient and accessible way to obtain tax guidance, filers should proceed with caution when relying on this technology for financial advice. The potential risks of inaccuracies and data security issues highlight the importance of verifying information and using AI chatbots as a supplemental tool in the tax preparation process. As AI technology continues to evolve, there may be future opportunities for more advanced and personalized tax assistance from these chatbots.