AI-Enhanced Tax Preparation and Filing: Automating Complex Regulatory Compliance

AI-Enhanced Tax Preparation and Filing: Automating Complex Regulatory Compliance is a proposal for tax preparation software that integrates with a web-based chat assistant. Modern tax preparation is a three-step process: 1) Tax return preparation; 2) Use of regulatory forms to file the tax return; and 3) Aone-to-many communication system to communicate with regulators. Potential for tax planning also is considered by employing artificial intelligence to automate data collection and optimize tax planning. This software's benefits against commoditized tax preparation services offered by for-profit firms and its approach to avoid regulatory failure are discussed.Conversely, taxpayers poorly serviced through “off-the-shelf” commoditized tax return preparation applications face tax filing penalties and fines. Taxpayers’ easy misunderstanding of the tax return preparation software package is likely to yield incorrect filling with corresponding penalties. Democratization of tax return preparer services would be a much more beneficial solution for both parties. Liberalization of the market for tax preparation burdens clients with increased costs and far less assurances of quality. Based on the current health-care system, for a fraction of current costs, taxpayers would only need to make use of the application web interface to retrieve regulatory knowledge and documentation needed to prepare tax returns.