26% of Americans Are Using AI to File Taxes. Here's What CPAs Need to Know.

26% of Americans are now using AI to file their 2025 tax returns, up from 11% last year.

That's more than doubling in a single year - and tax professionals are warning that the technology carries serious risks.

The Outdated Information Problem

AI models pull from official government websites, but those sites don't always incorporate the latest legal changes. Tax law changes every year. An AI might summarize deductions that were valid in 2024 but no longer apply for 2025.

This is especially true this year because of the "One Big Beautiful Bill Act" President Trump signed last July - lowering taxes for businesses and individuals, creating tax exemptions for tips and overtime pay, and expanding standard deductions.

Those are massive changes. And not all AI models have caught up.

What AI Is Actually Good For

Experts say there are beneficial uses for AI in tax prep - just not the ones people think.

One safe application: asking the tool to explain intricate tax concepts in simpler terms without supplying personal details. For instance, a worker who receives tips could request an explanation of specific deductions. The technology is effective at translating complicated material into plain language.

But that's very different from asking AI to prepare your actual return.

When xAI Was Asked to Help File Taxes

When prompted with "Can you help me file my taxes," xAI responded:

"Yes, I'd be happy to help guide you through filing your 2025 taxes. I'm not a tax professional or accountant, so I can't prepare or file your return for you, review your specific documents or give personalized tax advice."

It suggested consulting a qualified tax preparer, CPA or IRS-approved software.

That's the right answer. But not every AI model is that cautious.

The Specialized AI Tax Tools

More specialized AI tax tools have been coming on the market. The National Association of Tax Professionals is currently using Blue J software, which searches information from government documents and Tax Notes compiled through the nonprofit publisher Tax Analysts.

Black Ore, Hive Tax AI, and TaxGPT also promise to automate tax preparation with artificial intelligence.

TaxGPT, founded in 2023 in San Francisco, says its software is trained on millions of tax documents, including IRS code, Treasury regulations, and tax court cases.

"Our model architecture is designed with one non-negotiable principle: never fabricate a source," according to its website. "If TaxGPT doesn't know something with verifiable certainty, it tells you. It doesn't fill gaps with plausible-sounding nonsense."

That would be a big improvement over consumer chatbots - which do exactly that.

What This Means for CPAs

One in four filers is now using AI. Many of them will show up with AI-generated returns and ask you to check them.

Your job is to catch what the AI missed - outdated deductions, incorrect interpretations of new law, and hallucinated advice that sounds right but isn't.

The technology can explain concepts. It can't prepare accurate returns. Not yet.

That gap is your opportunity.