Not all AI is equal: Expertise matters for tax and accounting professionals

Artificial intelligence is reshaping the future of tax and accounting, moving the profession beyond routine compliance and into strategic value creation. With the ability to automate repetitive tasks, analyze vast amounts of data, and flag potential compliance risks, AI empowers tax and accounting professionals to work smarter, not harder. The result is more time for deeper client relationships, meaningful advisory services, and a sharper focus on growth opportunities.

However, not all AI solutions are created equally.

The importance of domain expertise, data quality, and user-centric design cannot be overstated when choosing an AI-powered tax technology solution. Purpose-built, professional-grade AI platforms consistently outperform publicly available generic alternatives by specifically addressing the complexity of tax law, ensuring accuracy in regulatory requirements, and enabling insight that meets individual client needs.

For AI-native firms, embedding the right technology into core operations results in a significant strategic advantage. In addition, innovations such as agentic AI and autonomous workflows can further enhance accuracy, adaptability, and efficiency for firms who seek a specialized solution. The question is, how do you choose the right AI-powered tax software?

Whether you are looking to enhance workflows, stay ahead of regulatory change, or shift to an advisory-focused business model, this white paper examines the role of AI in tax and accounting, compares purpose-built and generic solutions, and outlines practical guidance for evaluating AI tools so your firm can gain a competitive edge.

AI’s role in tax

Just as AI technology has infiltrated everyday lives of individuals, it is quickly becoming a necessity in work environments. Initially, AI introduced subtle, intuitive benefits that made accounting work more efficient. Now, AI has become the most powerful software, able to complete seemingly impossible tasks with ease.

Traditional tasks of tax and accounting professionals have become increasingly automated in recent years. While it may seem as though technology is taking over, now is the time to understand it and leverage it to your advantage. The power of using AI for data-driven insight can enable your firm to better serve your client base with value-added services that diversify revenue.

What exactly can AI technology do? For starters, it can help your staff conduct research, analyze large data sets, monitor risks and compliance obligations, and find answers in mountains of data. By completing your existing workload faster and more efficiently, you benefit your firm by having more time for developing client relationships, increasing service offerings, and growing your bottom line.

Big data in tax and accounting

The amount of data being generated worldwide is nearly unfathomable. In 2024, humans and machines together produced an estimated 402 million terabytes of data each day.

By its nature, the tax and accounting profession is a data-intensive environment. Firms process and review hundreds or even thousands of documents, provide analysis on high-volume data sets, and search for connections in disparate documents. Every client interaction, regulatory filing, transaction record, and financial statement adds to the ever-growing pool of information that must be managed.

For accounting firms, the challenge is not only managing the volume of this data but also extracting accurate, actionable insights in a timely and compliant manner. That’s where the need for an AI-powered solution comes in.

The importance of data quality

AI solutions depend on the information they are fed. If that information is inaccurate, incomplete, or irrelevant, the resulting outputs will be unreliable. High-quality, vetted data is the foundation of trustworthy AI, ensuring that tax professionals can rely on the insights delivered. In a field where even small errors can lead to costly compliance failures or reputational damage, data quality is mission critical.

That’s why AI solutions built on carefully curated tax and accounting data deliver more precise answers and actionable recommendations than generic tools pulling from the open web. For example, vetted datasets drawn from authoritative tax codes, IRS guidance, and legal precedents ensure that AI outputs are aligned with current laws and professional standards. This level of rigor provides accounting firms with the confidence to integrate AI into their workflows without compromising accuracy.

Data privacy and regulatory compliance

Equally essential is the protection of data once it is collected and processed. Sensitive financial and client information must be safeguarded at every stage of the workflow. Robust data privacy measures including encryption, access controls, and audit trails, are vital to ensuring that confidential information remains secure while being used for analysis and decision-making.

AI solutions designed specifically for tax and accounting professionals bring the added advantage of embedding compliance into their design. Unlike generic AI platforms, professional-grade tools incorporate data protection regulations and accounting-specific safeguards from the outset. This alignment not only reduces the risk of breaches or non-compliance but also gives firms and clients peace of mind.

Ultimately, big data represents both an opportunity and a responsibility for tax and accounting firms. With the right AI solution, your firm can harness vast volumes of information to deliver faster, more accurate insights, improve client service, and strengthen compliance. But this requires a deliberate focus on data quality, security, and regulatory alignment. By prioritizing vetted, professional-grade solutions, you can transform big data from an overwhelming challenge into a strategic advantage.

Agentic AI and autonomous workflows

Agentic AI represents the next evolution of AI. These systems act on behalf of users, making decisions and acting autonomously. They can automate routine but time-consuming tasks such as data entry, compliance checks, and even client communications. They also conduct in-depth analyses of large, complex data sets, producing actionable insights that empower professionals to respond to client needs more effectively.

For accounting firms, the integration of agentic AI opens the door to automation-first models that combine specialized domain knowledge with high-quality data. AI-native firms, designed from the ground up with these technologies in place, gain an advantage by embedding automation directly into their workflows.

Instead of layering new tools on top of outdated processes, AI-native firms operate with efficiency at their core, delivering faster and more accurate results for clients. This approach not only increases productivity but also positions firms as forward-looking advisors in a competitive marketplace.

However, the real strength of agentic AI lies in its adaptability as it is capable of continuous learning as it regularly updates its models to reflect changes in tax laws, compliance frameworks, and regulatory standards. This ensures that outputs remain accurate and relevant in a constantly shifting environment.

Purpose-built vs. generic AI solutions

When it comes to adopting AI in tax and accounting, one of the most important questions firms must ask is if we should rely on a purpose-built solution designed specifically for our profession, or turn to a generic tool that is open to anyone? Given most accountants’ low tolerance for risk, the answer is obvious.

What makes purpose-built AI different?

To start, it’s developed with direct input from experienced tax and accounting professionals and trained on vetted, relevant, and authoritative data from trusted sources.

Tailored to handle the specific complexities of tax law, regulatory requirements, and compliance obligations, a purpose-built AI solution provides accurate, context-aware answers that continuously improve through user interaction — and it delivers insights aligned with professional standards.

What are the trade-offs of generic AI?

Generic AI is designed to be adaptable across multiple industries and use cases. It’s useful for general tasks such as drafting text, organizing information, or answering simple queries. However, it lacks the accuracy, depth, and reliability required for complex tax research or compliance.

While generic AI can be cost-effective and easier to implement, it often falls short when addressing domain-specific challenges.

Which solution best supports your firm’s goals?

For firms handling high-stakes tax and audit work, the distinction is critical. If you need AI that can interpret tax codes, apply regulatory frameworks, and deliver audit-ready outputs, then purpose-built AI is a better, more strategic investment in both risk management and client service.

Bottom line — while generic AI has its place for broad, low-risk tasks, firms that want to remain competitive and trustworthy in an increasingly complex environment should prioritize AI solutions designed specifically for the tax and accounting profession.