Taxpayers rush to AI for tax help, but experts warn of incomplete answers and costly mistakes

I asked ChatGPT for tax help -- experts say I fell into a classic trap

I used an AI tool to do my taxes -- here's where experts say I went wrong For most of my adult life, I've enjoyed a relatively straightforward tax situation. In most years, I merely made sure the income from my W-2 was correct and clicked through my preferred tax software's questions to the end. No dependents, no side hustle income, no property in my name. This past year was a little different. After years of buying stock through my company's employee stock purchase plan, I sold the majority of my shares to begin raising funds for my upcoming wedding. There are some relatively tricky rules around selling these shares, but the gist is, these plans allow employees to buy stock at a discount to the actual share price. So determining how much money you made (in which case you owe capital gains tax) or lost on the sale of your shares requires some calculations. So I did what about 1 in 5 taxpayers are doing these days, per a recent survey from IPX 1031: I asked AI for help. I did so skeptically. I'd seen enough stories about AI "hallucinations" -- the industry term for when chatbots get things wrong -- that I was half-expecting ChatGPT to make a mess of my taxes. Plus, it had only been three years since I'd put AI to the test on tax strategies and watched it flounder. It's also worth noting that OpenAI's usage policies caution against using its product to automate "high-stakes decisions in sensitive areas without human review." And yet, when I started chatting with the latest version of OpenAI's large language model, I could feel my hesitation melting away. It not only answered my first question about how ESPP sales are taxed, but also broke things down into digestible bullet points and asked me if I was comfortable sharing more information. Since I was using a corporate version of the software that does not use data to train OpenAI's models, I uploaded the consolidated 1099 form from my brokerage firm. "This is great -- [your brokerage] actually gave us everything we need," the bot told me. "Here's what's going on." What ChatGPT told me essentially boils down to: Your brokerage is using one number, which is being uploaded into your tax software. But you actually have to use a different number. I just had to check my last few W-2s to see that they included a certain line item. I was ready to hit "file." But first, I ran my conversation by Miklos Ringbauer, a certified public accountant who has helped me with tax stories before. He told me that I had gotten possibly correct but also incomplete information. The W-2 check that ChatGPT had assured me wasn't that big a deal was actually quite important, he told me -- I or a tax pro would need to examine the numbers and compare them with my brokerage's to make sure everything added up. What's more, a few numbers in my 1099 appeared to indicate that I had made certain taxable moves I may not have made, Ringbauer told me. ChatGPT hadn't said anything about them -- probably because I didn't think to ask. "The question becomes does the taxpayer have necessary understanding of the documents they look at to understand and correct any items that needs to be addressed?" Ringbauer says. "In my understanding, many of our clients do not."

Should you use AI to file your taxes? Experts warn it can lead to costly mistakes.

Megan Cerullo is a New York-based reporter for CBS MoneyWatch covering small business, workplace, health care, consumer spending and personal finance topics. She regularly appears on CBS News 24/7 to discuss her reporting. Americans are increasingly turning to artificial intelligence tools like ChatGPT and Claude to help prepare their tax returns, but experts warn the technology can deliver outdated or inaccurate guidance, raising the risk of costly mistakes. About 26% of people are now using AI to file their 2025 tax returns during the current tax season, up from 11% in the prior year, according to polling from Adobe. In a post on X, Elon Musk said that his Grok AI chatbot "can help with your taxes." He was responding to another X user who said in a post that the tool helped boost a tax refund by $1,400. But tax experts warn that Americans may be putting themselves at risk by relying on AI, as chatbots can provide outdated or misleading guidance. For example, recent tax changes under the Republicans' "one big beautiful bill act," or OBBBA, may not be reflected in AI-generated responses. "Using AI for taxes is not new. It is integrated into tax preparation software, that's how they generate returns," Caroline Bruckner, tax professor at American University's Kogod School of Business, told CBS News. "But you want to be really careful about how you use the AIs that have become ubiquitous. AI on its own is not capable of preparing an accurate tax return." That's in part because government websites, including IRS.gov, contain a lot of outdated information that doesn't reflect changes in the tax law. Large language models could draw from such material and present it to users as up-to-date. "Our tax law is so incredibly complex, and the website has to have information that was true in 2020 as well as 2025, but tax laws and tax breaks have changed so much in five years," Bruckner said. "That's where generative AI can really cause problems if you just ask it a general question about deductions -- it may give you a summary of deductions that are no longer applicable, or in effect for this tax year." There are, however, some useful applications of AI when it comes to tax preparation, Bruckner and other experts said. "You can ask it a question without providing any identifying information," Bruckner said. For example, you can ask it to explain complicated tax concepts like, "What is the no tax on tips deduction?" if you are a worker who earns gratuities. "It can be great at translating a complicated tax concept into English," Bruckner said. That said, it's always important to think critically about the output generated by AI, and to scrutinize the sources it cites. Lisa Greene-Lewis, a tax expert with Intuit, the maker of the TurboTax filing program, said it's fine to use free, publicly available AI programs for general education purposes around tax concepts. But she doesn't recommend that people use them to file their own tax returns. "There's a difference between those AIs and TurboTax AI models, which have been trained by hundreds of millions of tax returns and financial data points and are up-to-date with the latest tax code and validated by tax professionals," she said. While AI can potentially help outline changes to the tax law under the OBBBA, like the tipped income deduction, it's no substitute for working with an experienced tax professional or tax prep-specific software tool, according to Mark Gallegos, a tax accountant at Porte Brown, an accounting firm. "It's not going to prepare your tax return at the moment. We might get there, but we're not there yet," he said. Danny Werfel, the former IRS commissioner from 2023 to 2025, told CBS News that ChatGPT and similar AIs are not specific to the realm of taxes and haven't been tested for accuracy. He warns never to feed sensitive personal information to such models. "You should be very wary of using AI and seek assurances that your information won't be harvested or shared for commercial purposes," he said. Julie Siegel, former deputy chief of staff at the Treasury Department, said people are turning to large language models, or LLMs, in the absence of a free, government-provided filing tool. The IRS eliminated its Direct File tool, created during the Biden administration, that saved taxpayers $160 each. "People are turning to LLMs because the government made a choice to pull back on an app it already built," she said. "But these apps don't understand how a certain set of facts apply to your particular tax situation." She added that LLMs also have difficulty interpreting between outdated and current information, in part because the IRS' materials can be misleading. For example, an IRS form with a headline reading "No tax on overtime" might suggest to an LLM that you don't owe taxes on any overtime pay, which is inaccurate. "So even if an LLM is looking at an authoritative source like the IRS, it may mistakenly calculate no tax at all on overtime," she said. She doesn't trust it to be accurate, and notes that individuals alone are responsible for the accuracy of their own returns. "If Claude misinterprets an IRS form and gets it wrong, and that causes you to owe a lot of money, you are the one at the end of the day holding the bag," she said.

Should you trust AI to do your taxes?

No language on earth has ever produced the expression "as enjoyable as filing your taxes." This annual chore is the pits. It's slow, frustrating work that requires organization, math skills, and the ability to decipher meaning from the U.S. tax code. People will jump on pretty much any solution that makes filing quicker, easier, and less painful-including giving AI a crack at it. Recent survey research from Qlik found that nearly 11% of taxpayers have used or plan to use a consumer AI system (such as ChatGPT, Claude, Copilot, or Gemini) to help them prepare their 2025 tax returns. But how trustworthy are these AI systems when it comes to something as sensitive as your taxes? It doesn't exactly inspire confidence that studies have shown AI is not so great at math. If you're considering letting your AI assistant give you some tax assistance, here's what Claude himself won't tell you. While it may seem outlandish to consult AI for anything tax-related (at least, that's my visceral reaction as a card-carrying, middle-aged luddite), the IRS itself has been using artificial intelligence for several years.