AI for Tax Professionals
Tax automation and AI explained: What every tax practitioner should know
Artificial intelligence (AI) is revolutionizing the tax industry, offering tools that streamline workflows and enhance accuracy like never before. With more than a decade of experience applying AI to tax information delivery, Bloomberg Tax supports tax professionals with cutting-edge insights and trusted solutions, helping you stay compliant, manage risk, and maximize efficiency.
Tax automation topics
Tax Automation Software
Fixed Assets Automation
Tax Provision Automation
Tax Workpaper Software
Unlock the potential of AI tax software with Bloomberg Tax
Bloomberg Tax delivers unmatched insights and innovative solutions, empowering tax professionals to fully leverage the power of AI technology. With access to actionable data and cutting-edge AI-driven tax tools, Bloomberg Tax enables smarter decision-making and modernizes your tax function with streamlined, efficient workflows.
Recent breakthroughs in AI technology have revolutionized the corporate tax industry, unlocking unprecedented opportunities for innovation. Now, with the ability to streamline operations and deliver data-driven tax strategies, AI is more than an upgrade – it’s a game changer.
Tax professionals are no longer confined to traditional workflows and tools; instead, AI can reshape the way they work by automating complex tax calculations and time-intensive tax research. The corporate tax landscape is entering a new era, and tax professionals are beginning to recognize tax automation software as a catalyst for efficiency, precision, and growth like never before. And in light of potential tax policy changes in 2025 – including the extension or expiration of TCJA tax provisions – AI is quickly becoming an important compliance and risk mitigation tool.
Below, we discuss the potential benefits and impact of AI on corporate tax teams – including whether generative AI has the power to replace tax professionals. Plus, gain a better understanding of how to evaluate AI tools and choose the best AI tax software for your needs.
What is artificial intelligence?
Artificial intelligence (AI) encompasses technology designed to replicate intelligent, humanlike behavior. If you’ve ever used Siri or Alexa, or conducted a Google search, you’ve used AI.
A key component under this broad term is machine learning, which refers to a specific method of using algorithms to analyze data, recognize patterns, and predict outcomes. Machine learning enables AI systems to continuously learn and improve without being explicitly programmed. In corporate tax work, AI leverages machine learning to automate complex calculations, streamline compliance, and improve efficiency – allowing tax teams to focus on being a strategic partner to the business rather than being bogged down by routine tasks.
Generative AI
Another application of AI technology is generative AI, such as ChatGPT. Generative AI tools are trained on vast amounts of data, known as a large language model, to instantaneously create seemingly new, task-appropriate content in response to instructions, or a “prompt,” from a user.
AI vs. automation
AI is distinct from tax automation, which involves systematizing a set of clear, repeatable steps that can be applied consistently to time-intensive or error-prone tasks that are otherwise done manually. However, AI technology can expand automation capabilities by applying machine learning to power predictive analytics, support risk management, and conduct more efficient research.
How is AI being used in the corporate tax industry?
Today’s tax professionals are already adopting AI to transform their day-to-day operations, drive efficiency, and gain a competitive advantage. According to a 2024 KPMG survey of chief tax officers:
- 29% of tax functions are already deploying generative AI
- 26% of tax functions are currently exploring uses for generative AI
Accounting firms and corporate tax departments aren’t the only ones adopting AI – the IRS and other tax authorities are increasingly leveraging AI to capture tax revenue.
Here’s how forward-thinking tax professionals can harness AI tax software to elevate their services and adapt to the evolving tax landscape.
Automate tax compliance
Tax departments have historically been focused on compliance as their main objective, which often involves cumbersome manual review tasks and processes. Integrated AI tax tools improve reporting consistency and minimize compliance risks.
For instance, the Bloomberg Tax Research Compliance Tracker feature automatically generates the required forms, due dates, and administrative guidance based on your entity details for seamless reporting and filing. Gather tax forms and track deadlines on a single dashboard that’s always up to date, so you’ll always know what to file, when to file, and how to file – for both federal and state.
Seamlessly gather tax forms, track deadlines, and set alerts for approaching filing dates and changing obligations so you’re never caught off guard.
Modern tax tools can enhance workflow precision by automating repetitive tasks and providing powerful insights – ultimately reducing compliance burdens and allowing tax teams to shift their focus to higher-impact strategic activities.
Here’s how AI makes tax compliance more efficient:
Spot risks and anomalies early
AI tools can cut through the noise of massive datasets to make it easier for tax teams to identify exceptions, flag year-over-year anomalies, and uncover areas of potential risk – ensuring they allocate review time where it matters most.
Optimize year-to-year comparisons
Automated data transformation improves the accuracy of queries from source systems, simplifying year-over-year comparisons and helping professionals identify data trends or inconsistencies earlier in the process.
Mitigate audit risks
Machine learning can power predictive financial analytics and identify potential areas of fraud to support robust risk management processes. For this reason, AI is poised to play an increasingly important role in auditing and other reporting tasks. Nearly 72% of companies surveyed by KPMG are currently piloting or using AI in financial reporting – and that number is expected to increase to 99% in just three years.
Simplify tax research
Instead of spending hours digging through dense source material and long analyses to find the answers you’re looking for, you can get lightning-fast answers to tax questions from generative AI. This entry point is a lower-risk way for tax professionals to dip their toes into the world of AI.
Bloomberg Tax Answers provides quick, AI-generated responses sourced from vetted Bloomberg Tax source material, including our gold standard Tax Management Portfolios. This feature is integrated into our suite of solutions, so tax professionals can access trusted tax intelligence throughout their workflow, right where they need it.
Get quick AI-generated responses to search questions – sourced from Bloomberg Tax’s trusted tax intelligence and integrated right at the point of application.
Prevent manual errors
Tedious manual tasks such as data entry leave room for errors and inefficiencies. Excel spreadsheets are subject to formula errors and version control issues among multiple owners. Automated workflows simplify these processes to give tax teams a clean, repeatable process that mitigates risk and saves time.
For example, Bloomberg Tax Fixed Assets is a cloud-based fixed assets subledger that automatically calculates accurate depreciation based on the latest tax laws. By automating calculations, protecting closed periods, and providing flexibility if revisions are needed, the solution helps tax professionals prevent material weaknesses because of tax law changes and resolve ERP system inadequacies.
Eliminate manual data prep
AI removes the need for manual data preparation by automating processes including year-over-year roll forward and validation. For example, Bloomberg Tax Workpapers offers built-in, tax-specific features to automate data processes and update calculations to reflect the latest tax laws and rates. The Data Connect function automatically updates your workpapers when new data is entered, eliminating the risk of formula errors or missteps from last-minute entries or changes to the dataset – no reformatting required.
Learn how Bloomberg Tax Workpapers can help you gain control of your spreadsheets with automatic data transformation and timesaving tax-specific functions.
Generate formulas instantly
Plus, with our AI Expression Generator, you don’t need to be a syntax wizard to write complicated tax formulas. Just explain what you want to do in your own words, and the AI tool will automatically create your formula in seconds – making it easy to avoid manual mistakes.
Instantly create tax formulas using simple language in Bloomberg Tax Workpapers.
Optimize data analysis and tax planning
Many corporate tax departments are investing in AI tools and technology to manage the increasing volume of data to support tax optimization strategies and planning. Generative AI can sift through massive, complex datasets in seconds, identifying patterns and uncovering insights that might otherwise go unnoticed. Using AI tax tools, tax professionals can quickly create detailed impact analyses and executive summaries and deliver actionable intelligence to guide smarter, evidence-based financial decisions.
AI technologies can adapt and learn over time, becoming even more effective at identifying trends and opportunities. By leveraging these advancements, tax teams can not only streamline their operations but also become a strategic partner to the business, drive growth, and gain a competitive edge.
Support overburdened tax teams
Corporate tax teams are stretched thinner than ever: the Bureau of Labor Statistics estimates that there are 340,000 fewer certified public accountants in the workforce today compared to five years ago. According to a Bloomberg Tax survey of nearly 400 tax professionals, three out of every four tax departments reported experiencing difficulties in recruiting and retaining talented tax professionals. That means many tax departments are facing staffing shortages while juggling mounting workloads in an already challenging industry.
AI solutions provide much-needed support and efficiency gains, freeing up time to focus on more valuable, growth-driven initiatives. Plus, AI tax tools not only support existing teams but can also help attract talent eager to work with cutting-edge technology – especially as new generations enter the workforce.
Can AI replace tax professionals?
No. It’s true that AI offers myriad potential benefits, with more advancements forthcoming, but AI isn’t a job killer for tax professionals in practice because it can’t replace human critical thinking and analysis skills. Tax professionals will continue to be integral to the corporate tax function because human oversight remains essential for complex, strategic decision-making, and because software can’t replace the relational human touch that’s still necessary for corporate success.
That said, soon tax professionals will be expected to leverage AI tools in their day-to-day work to stay ahead of, or at least keep up with, their peers in the industry. Large companies are already seeking out these capabilities: 71% of surveyed business leaders said they would rather hire a less experienced candidate with AI skills than a more experienced candidate without AI skills. And more than three-quarters of those surveyed indicated that junior candidates with AI skills would be given greater responsibilities.
The tax industry is responding by deliberately exploring how to embrace and leverage this groundbreaking technology. By adopting AI, tax professionals can stay confident in maintaining a competitive edge in this fast-moving field. Incorporating an integrated suite of trustworthy AI-powered tools helps streamline workflows – giving tax teams more control, enabling smarter work, and simplifying tax compliance.
What AI tools are best for tax?
For corporate tax professionals, two realities are often in conflict: accuracy is essential, but much of their decision-making is based on interpretations of nuanced laws, regulations, codes, guidance, and more. As the volume of tax information continues to grow exponentially, sophisticated AI techniques can unearth the most important insights and help tax practitioners focus on the most actionable source materials.
However, generative AI can come with significant risks, including hallucinations, inaccuracies, and lack of context. If you’re using an untrustworthy tool that doesn’t ensure the quality and accuracy of the AI’s outputs, the tool can do more harm than good. While no AI tool is 100% infallible, it’s important to choose AI tax software that has guardrails in place to ensure AI-generated content is consistently accurate.
Bobby Puglia
Chief Product Officer, Bloomberg Tax
If you’re ready to integrate AI into your tax workflows, the right tools and strategies can make a significant difference. By choosing wisely and learning to use AI effectively and responsibly, tax professionals can enhance operations, improve accuracy, and optimize tax strategies.
But how do you determine which AI tools are best for your needs? Here’s a guide to the key factors you should consider when evaluating AI tax solutions.
Choose a product grounded in trustworthy, authoritative tax information
AI tools designed for general audiences can be more likely to deliver inaccurate results than those designed specifically for tax professionals. In part, this is because general-purpose AI software is often trained using unverified – and often untraceable – web-based data sources. Instead, look for a trustworthy AI product that uses vetted primary and secondary sources to answer your tax questions.
“Using this technology safely and responsibly starts with choosing the right tool and learning how to use it,” said Bobby Puglia, chief product officer at Bloomberg Tax. “My advice is to select a trustworthy and quality product that’s grounded in your professional domain and supported by expert human oversight as well as the appropriate industry guardrails.”
Bloomberg Tax’s cutting-edge AI technology is built on a foundation of comprehensive primary and secondary sources as well as award-winning news and expert analysis – including our database of more than a half-million agency guidance or determination documents and our ever-growing collection of hundreds of practitioner-written Tax Management Portfolios.
Our large language models are trained on this specialized content, and every answer our AI tools provide is sourced from expert-vetted materials.
Look for technology backed by specialized human expertise
AI tools are only as good as the experts who develop and oversee the technology they’re built on. Choose a tool backed by a team that supervises, measures, and tests the quality of AI-generated content.
There isn’t yet an industrywide standard for benchmarking the quality of large language model outputs. However, Bloomberg Tax is uniquely positioned to understand both the power and limitations of generative AI and build the right safeguards to foster accuracy in our AI models. Our engineers and subject matter experts have developed a specialized benchmarking system to track and measure the quality and accuracy of our AI-generated content – thereby ensuring our users get expertly vetted responses that are grounded in our original content and primary source materials, Puglia said.
At Bloomberg Tax, our teams work together to leverage innovative technology to deliver our customers unparalleled industry expertise:
- Product owners are focused on developing tools that will solve our customers’ challenges. Often having worked as tax professionals themselves, our product owners understand the real-world demands of the job and look for ways to apply AI to make your job easier.
- Content teams, including subject matter experts, produce a variety of analysis and guidance on core tax topics and dedicated practice areas, including thousands of annotated form templates, perspectives on tax law changes, and ready-to-use OnPoint presentations.
- Engineering teams are made up of machine learning experts and data scientists who are at the forefront of AI research and understand how to use the power of AI to help tax professionals work more efficiently.
Find a tool that works the way you do
You shouldn’t need to be an expert in prompt engineering to harness the power of AI. Adopting new technologies and adjusting workflows accordingly can be disruptive, expensive, and time-consuming. The best AI tax tool will have a low barrier to entry that integrates seamlessly with your existing processes.
At Bloomberg Tax, our approach to AI is grounded in customer needs. We want our solutions to make your job easier – not do it for you. By prioritizing solving specific workflow challenges and simplifying tasks, our suite of tax tools enables practical improvements and efficiencies without the need for a dramatic overhaul. The result? A smoother transition to AI with minimal effort and a low learning curve, ultimately empowering tax teams to maintain control of how they work.
Our customer-first approach drives everything we do, especially through initiatives such as our Innovation Studio, where we collaborate directly with Bloomberg Tax customers to develop and refine our AI solutions. From fine-tuning AI models to ensuring that new tools and features fit naturally into tax workflows, every step of our development process is guided by real user feedback.. We’re committed to working alongside our customers to ensure our tools address real-world challenges and deliver meaningful results that align with user goals and preferences.
Revolutionize your tax operations with AI-powered solutions from Bloomberg Tax
AI-powered tax automation software has become an essential tool for transforming how corporate tax professionals work. With more than a decade of experience in applying AI to the complex challenges faced by tax professionals, Bloomberg Tax delivers a trusted, integrated suite of solutions designed to simplify compliance, unlock operational efficiency, and provide actionable insights – all backed by reliable analysis and guidance from leading tax experts.
Ready to modernize your tax function and harness the power of AI? Request a demo and discover how Bloomberg Tax can help you achieve precision, efficiency, and confidence in your tax strategy.