The Washington Post recently reported, “that two of the leading tax preparation companies’ chatbots provide inaccurate or irrelevant responses up to 50 percent of the time when initially asked 16 complex tax questions.” That’s right. The machines were wrong half of the time.
The Taxpayer Advocate’s Office recently warned that “taxpayers should not solely rely on AI-generated tax advice.”
I’ve had more than a few instances where clients called me for advice on complex tax issues. Prior to this they’d Googled an answer, and when my answer was contrary to what the machine said, they wanted to argue.
This isn’t an isolated case. We’ve all had instances where we looked something up and received an answer that was so wrong that no reasonable person would ever consider it to be correct.
The problem becomes much worse when inside the realm of accounting and tax law.
Please realize that when it comes down to any of the taxation agencies, you’re guilty until proven innocent. That’s right. Mother Russia didn’t die when she became a democracy. She’s still alive and well inside the IRS and the various Departments of Revenue.
Please also realize that ignorance of the law is no defense. Period. End of Story. Cut it, dry it, and leave it right there.
If you make the mistake of relying on AI for accounting and tax answers, you’re literally gambling with your freedom. When you get audited, are you actually going to tell the Revenue Officer or Judge, “But that’s what the machine told me. How could it possibly be wrong?”
Wanna bet how that’s going to go? I’ll give you 99 guesses just as long as the first 98 don’t count.
Please seek advice from a competent and experienced taxation professional.
Taxation is neither fair nor reasonable. Anyone who does this for a living who tells you otherwise, doesn’t know what they’re doing.
You may not always like my answer. But please realize that I only have your best interests at heart and that I will never lie to you.
Let me leave you with this…
Adam R. Oliva, 43, of Rolling Meadows, IL, recently pleaded guilty to one count of wire fraud and another count of filing a false income tax return. The wire fraud count is punishable by up to 20 years in a Federal Penitentiary and the false income tax count carries another potential 3 years.
Mr. Oliva did business under many business names including Oliva and Associates, and The Oliva Group, Ltd.
He admitted that during the period from 2015 to 2020, he collected money from clients to pay their income tax liabilities. Instead of paying the tax bills, he kept the money for himself. He then filed other income tax returns on behalf of the clients that erased the tax that was owed to cover up his fraudulent activities.
Earlier this year, Mr. Oliva pleaded guilty in another unrelated fraud case to stealing money from investors. He was supposed to use the money to do short term loans to individuals promising his investors a 10% – 20% return. Instead he pocketed the money and used it for personal expenses.
This charge carries a potential 20 year prison term. Sentencing on this count has been scheduled for October 18th, of this year.
A copy of the DOJ Press Release can be found at the following link.
https://www.justice.gov/usao-ndil/pr/suburban-chicago-tax-professional-admits-stealing-more-11-million-client-funds
When I write about a small fraction of the tax cases that go through the DOJ, normally they’re in far flung place. But this one is in our backyard.
We’ve never handled transactions on behalf of our clients. Think about it. Why would anyone offer to pay your taxes for you? If you’re a responsible adult, why can’t you write the check?
I can’t tell you how many cases like this that I’ve seen in the past 34 years. Taxation professionals aren’t immune to the ills of man.
Please use your common sense when dealing with anyone in finance. If it smells wrong, it probably is. Be careful in your choices.
Just because a person looks respectable and has nice offices doesn’t mean anything. Mr. Oliva had beautiful offices.
But I’ll bet you dimes to donuts that his new accommodations, once sent up the river, won’t be quite as comfortable.
We’re all going to get through this. Let’s get through it together.
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Sincerely yours,
Chris Amundson
President
Accounting Solutions Ltd.
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