Experts warn of the risks of using AI technology to help with tax returns

ABC NEWS (Australia)

There are growing warnings about the dangers of using artificial intelligence to help with tax returns. Experts say while using technology can be convenient it does carry risks.

Transcript

00:00Right now, the biggest source of AI is actually integration into regular tax products.

00:08And that's not the kind of thing that we need to be that worried about.

00:11However, what we're also seeing is a lot of people turning to online tools like ChatGBT

00:18or Google's Gemini in order to try and do some of their tax work.

00:22And that's where things are a little more concerning.

00:25This is so often the case when we're talking about AI, there are potential benefits, but

00:30also risks.

00:31So if we look at the potential benefits first, what are some of the positive ways that AI

00:36can be used for people in this scenario?

00:40Preparing your taxes has quite a lot of dull, repetitive work.

00:44Something like going through and categorising all of your transactions for your deductions,

00:50according to what type of category they might fit in, whether it's a legitimate business

00:54expense or not, that sort of thing is something that AI is very well suited towards helping

01:00out with.

01:01You can run it over a list of your transactions and it can make a guess at what's right for

01:06a deduction and what's not.

01:08However, when you start to go beyond that and try and get it to do the actual numeric calculations,

01:15that's where things can go very wrong.

01:16And you might not even notice that it's actually producing the wrong numbers.

01:20Yeah, so what kind of risks could people face if they did use it in that way?

01:27You could face the same types of risks that you face when making an error on your tax return.

01:33However, you can't turn around to the ATO and say, the AI did it.

01:37Ultimately, you're responsible for what goes in your tax return.

01:41And so using these tools is not an excuse for having it go wrong.

01:45So is it a case here that it really is, I suppose, a case by case basis, depending on

01:50how complex your tax return is going to be?

01:52People really need to apply some caution here.

01:56The general AI tools are not going to be the right fit for doing all of your taxes.

02:02That's where you really ought to be using an accountant or specialised tax software or

02:07the ATO's website.

02:09Where it can be useful is if you need help in arranging your tax affairs and you're willing

02:14to actually do the work to check what comes out of the AI.

02:18There one of the online AI tools may be able to speed up part of your work.

02:23And how do you see the future of AI developing in this area?

02:28This is one of the places that's very well suited to not very complex AI, but the sorts

02:34of algorithms that we already use on a day-to-day basis in all sorts of places.

02:40Tax software that is specially tailored to doing your taxes can use fairly advanced algorithms,

02:47but in a very efficient and reliable way.

02:50So I think that AI in tax is here to stay, but that it's going to increasingly become something

02:56normal such that we don't even notice we're actually using AI at its heart.

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