There’s no question about it: Artificial intelligence (AI) is reinventing the way tax professionals approach tax season. To better understand the use of artificial intelligence in tax, it’s important to know what tax bots are, how they’re beneficial to tax teams, and why some professionals are still hesitant to adopt automation technology.
Defining Artificial Intelligence
Artificial intelligence (AI) is the concept of computers using intelligence to perform human-like tasks. This is accomplished by feeding a neural network – a computer system modeled after the human brain – with an abundance of diverse data to create cognitive answers to questions. Tax professionals are beginning to leverage AI to help them find answers to questions like, “How can I support an appeal on my property tax assessment?” Using AI technology, a computer or “tax bot” can review comparable assessments and help build a case for appeal.
While AI is the most advanced type of automation technology, other systems can be built into tax processes as well. Machine learning is an application of AI that focuses on the concept of computers being able to learn and progressively improve their performance on tasks. The computer must be trained to recognize different data patterns to help it arrive at conclusions—for instance, training it to know that a ThinkPad Pro always belongs in the “computer” category of assets.
Robotic process automation (RPA) is an application that performs highly logical, automated tasks by following clear conditional statements. RPA solutions enable tax professionals to create tax bots and direct them to perform tedious tasks, such as data extraction and data entry.
Tax teams that use software incorporating advanced technology have a competitive advantage. Find out how it works by downloading this free white paper on the state of property tax technology through 2020.
The Benefits Of Using Artificial Intelligence in Tax
AI and other advanced technologies can be used to optimize tax processes, specifically to:
- Automate tasks. Tax bots can perform time-consuming tasks such as data entry.
- Increase efficiency. Automation of tedious tasks frees up time for tax professionals, allowing them to focus on more productive work.
- Improve forecasting. AI solutions can analyze data and detect tax-related trends, making forecasting faster and more accurate.
- Create business continuity. Automated tasks aren’t stalled by external factors, such as employee sick days or turnover, minimizing interruptions and creating continuity.
The goal in adopting this technology is to remove all the repetitive, mundane tasks that take time away from more valuable work. By 2035, it’s estimated that AI will have the power to increase productivity by 40 percent or more.
Common Barriers To Adoption
Despite the obvious benefits, many tax professionals are still hesitant to invest in AI technology. Fear is a common barrier to adoption—fear of change and of overly complex technology.
Alternatively, some tax practitioners are hesitant to incorporate tax bots because they simply don’t trust the process. A robot can perform some tasks like a human, but ultimately lacks the human intelligence that may be required to fully understand something. By calling upon human intelligence crowdsourcing methodologies, such as asking people questions and compiling the answers, we can enable computers to begin interpreting important tax documents and predicting the most likely response, based on the crowdsourced data.
A Smarter Approach To Automation
Undoubtedly, automation technology will continue to evolve and improve. At CrowdReason, smart process automation (SPA) technology is our approach to combining computer algorithms with human intelligence in order to optimize processes. We accomplish this by creating diverse questions and answers, and then training a computer algorithm to use that information to predict human-like responses to tax questions. We’ve integrated smart process automation technology and machine learning into our property tax software to help further automate the compliance process and reduce the load on individuals making decisions.
Interesting in learning more about the future of artificial intelligence in tax? Download our white paper, The State Of Property Tax Technology: 2018-2020, for a deep dive on the technological advancements that are transforming the tax industry. You can also check out our software by scheduling a free demo.