With Tax Day approaching on Wednesday, April 15, taxpayers might be tempted to use artificial intelligence to prepare their returns. However, experts warn against relying on AI chatbots due to privacy risks and the potential for fabricated information.
Robert Persichitte, an accounting professor at MSU Denver, advises against using the technology for tax preparation just yet.
"First, these basic chatbots are not giving you privacy," Persichitte said. "You are uploading your information in a way that is not private and not secure."
▶️ WATCH: Experts warn against using artificial intelligence to prepare your taxes due to privacy and legal risks
Persichitte noted that AI cannot keep disclosed personal information secure.
"The first risk is privacy. If you're disclosing information that you want to keep private and the AI can't do that, that's going to be a problem," Persichitte said.
The second major issue is that AI struggles to apply the correct tax rules, which change annually and vary based on individual situations.
"The second problem that I see most frequently is the chatbots are really bad at determining which set of rules apply," he said. "Tax rules change from year to year, and the rules that apply to you can be very different based on what your situation is."
Another immediate threat is that AI might fabricate information or make blatant errors on tax returns — do things that are blatantly wrong on your tax returns," Persichitte said.
Because a tax return is a legal document, taxpayers are ultimately responsible for the information submitted to the IRS, regardless of whether AI was used.
"You're standing behind that. It doesn't matter if you have AI or not. If the IRS comes back and audits you, you can't just say, 'Well I tried. I put it into AI.' You're still responsible for what it's putting out," Persichitte said.
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