Should You Trust a Chatbot to Do Your Taxes?

People are becoming more comfortable getting financial information online, but are they ready for AI CPAs?
illustrated by Benedikt Luft
Illustration by Benedikt Luft

It’s tax season, which means it’s also Oh-My-God-I-Have-No-Idea-How-To-File-Taxes season. This time of year is especially nerve-wracking for people who rely on freelancing or gig jobs, and getting into the wild west of understanding how to properly fill out 1040s and W-2s can be a daunting task.

You need to get help. But from who? Luckily, there are trained professionals—called Certified Public Accountants (CPA)—available to help. Unluckily, they could cost between $150-$300 per form. When you’re living paycheck to paycheck, that might not be in your budget.


So, like most of us, you'll most likely turn to the internet to solve your problems, and more specifically to a chatbot. Kevin Desouza, a foundation professor in the school of public affairs at Arizona University, defines chatbots as “computer programs that leverage machine learning and artificial intelligence to complete tasks while mimicking human conversation.” The more a chatbot interacts and simulates conversations with people, the more they learn and are able to respond with more detailed answers in the future.

In the tax world, chatbots have been popping up everywhere. Last year, accounting organization Deloitte published a report on the emergence of artificial intelligence in tax services, especially to mitigate the huge and varied amount of information employees and customers have to wade through to file. The Internal Revenue Service (IRS) even has an “interactive tax assistant” built into their website.

Desouza said that there’s more talk lately about chatbots because people are getting more accustomed to the idea of getting their information online.

“It's no [longer] more strange for individuals to prefer to deal with information on a website rather than gain it from an individual,” he said.

There are still major limitations concerning the ways in which chatbots learn—take the example of Microsoft’s conversational chatbot, Tay, which was corrupted in less than a day to become an AI nazi in 2016. Given these shortcomings, should anyone trust chatbots with complex tax questions?


In short, yes, but only to an extent.

Ask My Uncle Sam (AMUS) is a tax chatbot that’s been online for about a year. Busayo Ogunsanya, the founder of AMUS and a CPA from New York, said that they created their chatbot service when he noticed that a lot of his friends didn’t know a lot about tax returns.

“A lot of millennials don't understand how tax deductions work, and a lot of freelancers in the shared economy don't understand what deductions to take, what to withhold, and a lot of people can't afford a CPA,” he said. “Furthermore, there's no accuracy built around a Google search.”

So with a focus on freelancers, small businesses, and workers in the gig economy, AMUS’s chatbot takes their info straight from IRS documents based on different keywords. Ogunsanya said they currently have about 4,000 questions in their database, but that will increase the more it’s used. The chatbot doesn’t ask for any specifying or identifying information, which means it doesn’t pose threats to financial privacy.

Tax chatbots are a good tool for general questions to get you started on your returns, especially if your biggest concern is filling out the more basic forms. But since most of the questions and answers are based on generic information and other FAQs, anything more complicated should probably go through a CPA.

“If you're an individual who has highly complex financial portfolios associated with international holdings, then you don't want to use a chatbot,” Desouza said. “A chatbot won't be able to do your information request because it's not used to those kinds of queries.”

But the rest of us should go ahead and freely ask our most clueless questions to these chatbots, saved from the shame of letting the rest of the world know we have no idea what we’re doing.

“If you have a human agent,” Desouza said, “they are going to use the chatbot and relay that information anyway.”

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