Off the Beaten Tax: Could the Robots Be Coming for the Tax Preparers?
Journalists aren’t the only professionals who could be looking for a new career thanks to the development of artificial intelligence. If a video showcasing the latest updates to ChatGPT is to be believed, tax return preparers could also soon be out of a job.
In a “developer demo” posted to YouTube March 14, Greg Brockman, president of OpenAI, demonstrated the newest version of the AI chatbot, dubbed GPT-4. Brockman finished up the demonstration by asking the bot to perform some tax calculations — or as he put it, “how to work with the system to accomplish a task that none of us like to do but we all have to.”
According to Brockman, he fed the AI “about 16 pages' worth of tax code” and then asked it to figure out the standard deduction and total tax liability of a hypothetical taxpayer for tax year 2018.
In its response, the chatbot not only provided the requested calculations but also cited applicable code sections in explaining how it arrived at its results.
“To tell the truth, the first time I tried to approach this problem myself, I could not figure it out. . . . It was only by asking the model to spell out its reasoning — and then I followed along — that I was like, ‘Oh, I get it now; I understand how this works,’” Brockman said.
That’s the promise of ChatGPT, according to Brockman. “It can be helpful to understand some dense content, to just be able to empower yourself to be able to sort of solve problems and get a handle on what’s happening when you could not otherwise,” he said. The program previously demonstrated that it can produce content similar to news articles.
After the demonstration, a writer for ForexLive, a provider of economic and market information, expressed amazement. “You can see how it’s on the path to putting millions of accountants out of work. Obviously it can’t yet fill out the forms and submit your taxes but that looks like a trivial challenge at this point,” wrote Adam Button.
Others were less credulous. “I look forward to the first Tax Court case discussing the merits of ‘I relied on ChatGPT’ as a potential defense to accuracy related penalties,” Justin Hughes, a tax attorney and CPA, wrote on Twitter.
So maybe tax professionals shouldn’t submit their letters of resignation just yet. Even Brockman was quick to note that ChatGPT “is not a certified tax professional — nor am I — so you should always check with your tax adviser.”
According to OpenAI, GPT-4 builds on GPT-3.5, the publicly available version of ChatGPT that allows users to enter text into a prompt and get a response from the AI chatbot. GPT-4 is capable of understanding more complex tasks and can even view and describe images, the company said.
As a demonstration of its improved capabilities, the company compared GPT-4’s results on several standardized tests with the results of GPT-3.5 and found improvements nearly across the board. For example, while GPT-3.5 ranked in only the 40th percentile on the LSAT, GPT-4 finished in the 88th percentile.