00:00The deadline for U.S. taxpayers to file their return is just weeks away, whether they live in New York,
00:05London or Paris.
00:06But accountants may find their work drying up this year as AI chatbots improve, close to the point of being
00:13able to navigate the U.S. tax system.
00:15Let's get more from Bloomberg's Charlie Wells.
00:17So, Charlie, that's quite the claim.
00:20The U.S. tax system is particularly complex, I would say.
00:23Are they really, these chatbots, able to work it all out?
00:26People are starting to make inroads here.
00:28And what I would say is if you walk around Bank Station or Canary Wharf after market close today and
00:34say April 15th, a lot of these traders, a lot of these bankers who are U.S. people who have
00:39to file their taxes wherever they reside are going to look at you and tell you the only thing worse
00:44than paying my taxes is filing them.
00:47Because, as you say, the system is really complex.
00:48There's a lot of different rules.
00:50And a lot of these really highly paid people pay accountants to help them prepare their taxes.
00:55Their accountants turn around and say, OK, here's all this stuff you need to get for me.
00:58And so these really busy people have to fill out their taxes, do a lot of this work.
01:02And so they're starting to use AI to help get a lot of these PDFs, get a lot of this
01:07information organized for their accountants.
01:09That's one of the use cases that I really came across in reporting this story.
01:13And, of course, we saw a huge sell-off in some of these names that prepare your taxes for you
01:17in recent weeks as that sell-off from AI started spreading.
01:21But surely it could be dangerous in this environment, too.
01:24So this is the question, right?
01:26So that SaaSpocalypse, this issue that maybe some of these big tax software companies, you know, could be replaced by
01:32AI.
01:32And I think that some of these stories are use cases of using AI instead of, say, Intuit or H
01:38&R Block products.
01:39They control 80 percent of the U.S. tax software market.
01:43But as you say, there are risks here.
01:45And we spoke to over a dozen tax professionals, tax preparers.
01:49And they said that, look, just because you're using computer code, it doesn't mean that the tax code is going
01:55to overlay on that easily.
01:56A lot of these, you know, AI LLMs, they hallucinate.
02:01They aren't up to date.
02:02So there have been major changes to the U.S. tax code over the past year.
02:06And some of these LLMs just aren't up to date yet.
02:09Well, and the other thing is you don't want to raise red flags, right?
02:11So are you willing to have the AI do your work for you and chance that red flags might be
02:17raised and it wasn't even your intention?
02:20What are you hearing from people that have prepared their taxes this way?
02:23This is another main concern, right?
02:24What is the recourse if one of these models gets something wrong, right?
02:29There's not a lot of history here.
02:31And as you say, the IRS is, you know, razor focused on this issue because they know that this is
02:37out there right now and that people could be doing it.
02:39If you get audited, the last thing you want to say to a federal official is, oh, I just had
02:45AI do this, right?
02:46So accountants really are urging caution here.
02:49But, again, I spoke with an accountant yesterday who said, oh, we use AI at my firm and it's making
02:54my junior staffers more efficient.
02:56And so I think this is a nuanced story, right?
02:59It's something where this is helping professionals in the space.
03:02This is helping very busy professionals at bank or at Canary Wharf who don't want to spend their weekend downloading
03:09PDFs, downloading bank statements.
03:11So it can be helpful, but you have to know the limitations.
03:13I think that's the key that I picked up in talking to a lot of these people.
03:17Charlie, have you filed your taxes?
03:19No comment. No comment.
03:21I am not going to ask you a second time.
03:24Bloomberg's Charlie Wells, and I would urge everyone to read the story.
03:26It is a fascinating and funny read.
Comments