It’s been just over two years since a group of scientists and technologists including Elon Musk, Steve Wozniak and Stephen Hawking published their concerns about escalating military applications of artificial intelligence (AI). Since then, the topic has received plenty of press. So, it’s probably not surprising that the term “arms race” popped into my mind as I read through a recent article by my Vertex colleagues John Viglione and David Deputy that explains, among other things, how AI will shape the evolving dynamic between tax authorities and corporate tax departments.
The article, “Your Tax Data Is Ripe for Artificial Intelligence. Are You Prepared?,” appears in Tax Executive, the professional journal of the Tax Executives Institute. Let me quickly add the authors don’t use the arms race metaphor themselves. But they do point out governments are already using AI for tax insights, and as regulatory requirements evolve, businesses and tax departments are finding themselves “pushed and pulled to adopt AI technologies to ensure their processes and reporting capabilities meet and even exceed these new regulatory requirements.”
That said, the article is emphatic about the benefits of cognitive technologies for the tax function. The authors explain how machine learning can help tax departments increase efficiency, save time and reduce costs. They describe what AI can do with your data, and they suggest five key steps to take before investing in AI.
Most important, John and David offer some recommendations to ensure your organization is ready for the AI wave. The disruption is still on the horizon, they note, but it’s not too soon to start evaluating work flows and processes to determine which ones are best suited to AI. Executives should consider investing in tools to extract the full value of data that can’t be analyzed via spreadsheets alone.
Above all, tax leaders should develop a deeper understanding of AI and how it can solve business challenges: “The power of AI and ML technologies can help leaders make decisions that are critical to their mission – a power that should be recognized and leveraged.”
Please remember that the Tax Matters provides information for educational purposes, not specific tax or legal advice. Always consult a qualified tax or legal advisor before taking any action based on this information.