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

ChatGPT for Tax Help Gains Popularity Despite Expert Warnings

Americans are increasingly embracing artificial intelligence for taxes, with approximately 26% of people now using AI to file their 2025 tax returns during the current tax season, according to polling from Adobe2

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. This represents a dramatic surge from just 11% in the prior year. Survey research from Qlik similarly found that nearly 11% of taxpayers have used or plan to use consumer AI systems such as ChatGPT, Claude, Copilot, or Gemini to help them prepare their 2025 tax returns3

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. Even Elon Musk promoted the trend, claiming on X that his Grok AI chatbot "can help with your taxes," citing a user who reported boosting a tax refund by $1,4002

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The Risks of Using AI for Taxes Become Apparent

Despite growing adoption, tax experts warn that relying on AI for tax preparation carries significant risks. A CNBC reporter's firsthand experience illustrates the pitfalls. After selling shares from an Employee Stock Purchase Plan (ESPP) to raise funds for a wedding, the reporter turned to ChatGPT for guidance on the relatively tricky rules around capital gains tax1

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. The AI tool appeared helpful at first, breaking down information into digestible bullet points and analyzing uploaded financial data from a consolidated 1099 form. However, when certified public accountant Miklos Ringbauer reviewed the conversation, he identified critical problems: the information was "possibly correct but also incomplete," and ChatGPT had failed to flag certain taxable moves indicated in the 10991

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. "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 noted. "In my understanding, many of our clients do not"1

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Why AI Tax Guidance Can Lead to Costly Mistakes

The core problem with using AI to file taxes stems from how large language models (LLMs) process information. Caroline Bruckner, tax professor at American University's Kogod School of Business, explained that government websites including IRS.gov contain substantial outdated information that doesn't reflect changes in the tax law2

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. "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"2

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. Recent tax changes under the Republicans' "one big beautiful bill act," or OBBBA, may not be reflected in AI-generated responses, creating additional confusion for taxpayers2

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AI Tax Mistakes and Hallucinations Remain Concerns

The phenomenon of AI "hallucinations"—the industry term for when chatbots get things wrong—poses particular dangers in tax preparation1

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. Julie Siegel, former deputy chief of staff at the Treasury Department, highlighted how LLMs struggle to interpret between outdated and current information. 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 inaccurate2

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. "So even if an LLM is looking at an authoritative source like the IRS, it may mistakenly calculate no tax at all on overtime," Siegel warned2

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. Danny Werfel, the former IRS commissioner from 2023 to 2025, emphasized that ChatGPT and similar AIs "are not specific to the realm of taxes and haven't been tested for accuracy"2

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How Tax Experts Recommend Using AI for Tax Preparation

While cautioning against complete reliance on AI, tax experts acknowledge some useful applications of AI tax help. Bruckner noted that taxpayers can ask AI questions without providing identifying information, such as requesting explanations of complicated tax concepts like "What is the no tax on tips deduction?" for workers who earn gratuities2

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. "It can be great at translating a complicated tax concept into English," she said, while emphasizing the importance of thinking critically about AI output and scrutinizing cited sources2

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. Lisa Greene-Lewis, a tax expert with Intuit, the maker of TurboTax, distinguished between free AI programs and specialized tax software: "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"2

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. Mark Gallegos, a tax accountant at Porte Brown, was blunt about current limitations: "It's not going to prepare your tax return at the moment. We might get there, but we're not there yet"2

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. OpenAI's usage policies also caution against using its product to automate "high-stakes decisions in sensitive areas without human review"1

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. Werfel warned taxpayers never to feed sensitive personal information to such models, advising people to "be very wary of using AI and seek assurances that your information won't be harvested or shared for commercial purposes"2

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