How do I feel about machines learning to do your Tax?
I believe technology will reduce complexities for individuals and businesses. Advances in artificial intelligence will create a future when clients ask a chatbot to answer tax questions not their accountant.
This is not some distant dream that the current cohort can choose to ignore leaving for the next generation to embrace.
There is already a ChatBot called AskMyUncleSam that uses A.I to answer tax questions and financial inquires for millions of Americans. With AskMyUncleSam, you can ask questions such as ‘How can I reduce my Tax Bill’ - by building up a massive database of tax-related queries a chatbot can easily answer basic questions.
So what must accountants do now to embrace this evitable change?
I believe AI and Machine Learning will advance the world of the accountant from rear view mirror to front seat driver
Machine learning is a branch of artificial intelligence (AI) that gives computers a degree of self-learning ability through an ability to identify patterns with only periodic human intervention.
The idea behind machine learning is the construction of computer algorithms that automatically improve themselves through the detection of patterns in data without explicit instructions.
It’s all about the data
It’s all about the data. Machine learning relies entirely on data. As the quantity and quality of data increases a computer’s predictive accuracy grows.
Imagine a computer programme studying accounts and tax return data, it could learn what deductions were in point in specific circumstances, how claiming them would affect a person’s (or business) tax position, and as a result offer context sensitive guidance.
With the aid of a chatbot accounts production or tax return filing software could interact with a taxpayer or their agent by posing context sensitive questions devised by the programme.
Tax calculations will be reduced to an algorithm that machines will do better and faster
Most of us already do a lot online from engaging with friends and colleague via social media to banking. In fact, over the last ten years most tax returns and statutory accounts have been prepared, filed and stored digitally.
Details of trading income and expenditure, income from employment, savings and investments, capital gains and losses and pension contributions are already posted directly, or captured from third party sources and inserted into accounts production and return filing software to calculate a business’s profitability or individual’s tax liability.
It would be a relatively simple step for machine learning algorithms to be deployed to release accountants from simple data input work. In the future, machine-learning programmes will guide accountants and tax advisers in the preparation of their client’s accounts and returns and through an iterative learning process improve for future generations.
But what about businesses?
It would be just as easy to apply an algorithm to a specific industry or company and as a computer gathers more and more data it will be possible to build industry-specific tax software.
What are the 3 big areas accountants need to have on their radar
- Automation of routine decisions and reporting - Routine tasks are wide open to automation. You know, the kind of time-consuming work that can fill a professional’s workday is where we see most impact. This work involves using machine learning algorithms that have recently become common in today’s business world and our daily lives.
- Clever dashboard monitors- Cloud computing has ushered in a new era. Dashboards collate information which give useful snap shots of taxpayers positions. But where, over time, this will become an even more powerful ally of the adviser is that they will become a dynamic interface, allowing the professional to use the system not only to evaluate the past, but also to anticipate the future.
- Adaptive learning based on operations - Imagine a complex tax return which AI tool could analyse in a matter of seconds, determining whether any thorny tax problems or risks are inherent in it or if there are more efficient ways of using allowances and reliefs. This kind of analysis, when performed by a human can be onerous. Where as an AI tool can build its own statistical model based on historical information and make more predictive decisions.
It is this being able to see into the future that will change role of an adviser.
AI will enable accountants to keep their eyes on the road ahead instead of constantly looking in the rear view mirror. And as we take our tentative steps forward into the world of automated taxation AI will become an increasingly crucial part of progressive and successful accountant who can help drive business success.