Artificial intelligence is reshaping tax preparation, planning, and compliance. Once limited to basic automation, AI now plays a meaningful role in data intake, calculations, research, and forecasting—changing how tax professionals and taxpayers interact with the tax system.

This white paper examines how AI is currently used in tax preparation, where it delivers efficiency and accuracy gains, and where its limitations create risk. While AI can streamline workflows, reduce manual errors, and support advanced tax planning, it cannot replace human judgment, contextual interpretation, or professional accountability. Issues such as data security, model hallucinations, and complex tax scenarios require active oversight by experienced tax professionals.

Rather than framing AI as a replacement for human tax preparers, this report explains why the future of tax work depends on collaboration between technology and professionals. As the IRS and other tax authorities increase their own use of AI for enforcement and compliance, the need for human review, ethical judgment, and strategic interpretation becomes even more critical.