Rather than dropping a strongly worded letter on the topic of the IRS’s position on AI in tax practice and dropping the topic there to focus on other pressing matters, the AICPA is teaming up with former IRS commish Danny Werfel on a new initiative that hopes to hammer out some remedial answers to the serious questions about AI in the field. They’re calling it CART, Council on AI Risk in Tax.
Said the AICPA in an article on their site:
The American Institute of CPAs (AICPA) and former IRS Commissioner Danny Werfel have partnered together to lead a new initiative bringing together leaders from accounting, law, technology, government and academia to advance practical approaches to the responsible use of artificial intelligence in tax administration and tax practice. Participating organizations include the National Association of Enrolled Agents (NAEA), Federation of Tax Administrators (FTA) and several others.
CART was established to:
- Test, refine and strengthen an AI risk framework for tax to ensure it remains practical, relevant and responsive to evolving AI capabilities, industry practices and regulatory expectations.
- Identify additional tools, guidance and other resources that can help organizations manage AI-related risks and promote responsible innovation.
- Create a forum for collaboration and shared learning where stakeholders can exchange lessons learned, emerging practices and practical approaches to responsible AI use in tax.
“Tax is high-stakes, and we cannot assume that emerging AI tools will police themselves. The AI risk framework published earlier this month provides a starting point,” said Werfel. “Through this new Council, the AICPA is bringing the tax community together to refine that framework and explore additional tools that can help tax administrators and practitioners realize the benefits of AI while managing the various and material risks that AI presents.”
This is the AI risk framework he’s talking about, published August 31st in The Tax Adviser under his byline. It’s fairly extensive, you should give it a look if you’re in this field. It’ll be interesting to compare these risks to potential risks 5 or 10 years from now, assuming the AI evolves past hallucinations and hasn’t nuked the entire system for funsies by then like doomers keep saying it will:
We’re particularly interested in the discussion around workforce risks on the tax preparer side, outlined in Werfel’s article here:
Workforce and strategic
Skill erosion: Staff develop expertise in operating AI tools rather than in the underlying tax law those tools are applying. The firm loses the independent analytical capability needed to catch AI errors or handle complex matters without AI assistance.
Vendor dependence: The firm becomes operationally reliant on a single AI vendor to the point where a vendor outage, pricing change, or contract termination would materially disrupt client service. The firm no longer has the internal capability to operate without the tool.
Institutional knowledge loss: Experienced preparers retire or leave earlier than they otherwise would as AI reduces demand for their expertise. The knowledge they carry — about complex clients, “edge” cases, and professional judgment — leaves with them and is not replaced.
Sounds like they’re onto something with this CART business. And not a moment too soon.
