CPA warns AI can mislead taxpayers on deductions and filing rules

As more Americans use AI for tax help, CPA Phil Liberatore says the tools can explain basics but still miss critical details that affect what people owe. He is urging taxpayers to verify AI-generated guidance with a qualified professional before making filing or planning decisions.

Why it matters: - AI is making tax information faster to find, but faster answers can still be wrong. - Tax mistakes can lead to missed deductions, incorrect filings, higher bills, or decisions that affect future tax years. - Taxpayers who enter sensitive financial data into AI tools also face privacy risks.

What happened: - Phil Liberatore, a CPA and IRS expert in Los Angeles, said taxpayers should not rely on AI alone for tax advice. - Liberatore said AI can help people understand basic tax topics, but it can miss details that change how a return should be filed. - He said taxpayers should verify AI-generated guidance with a qualified tax professional before acting on it.

The details: - AI tools can help explain tax terminology, organize financial information, and help taxpayers prepare questions before filing. - Filing status, dependents, business income, retirement distributions, and state-specific rules can all change a taxpayer’s return. - A general AI answer can sound confident while still overlooking a detail that changes the outcome. - Liberatore said AI can miss important details or provide inconsistent answers when tax questions become personal. - AI-generated guidance may overlook eligible deductions or credits. - AI tools may rely on outdated tax rules. - Tax planning decisions involving retirement, investments, and business operations can create consequences beyond the current filing year. - Taxpayers should be cautious before entering Social Security numbers, bank details, or complete tax documents into AI platforms. - The concern is how that information may be stored or used. - Liberatore is the founder of Your IRS Problem Solvers and has more than 40 years of experience helping individuals and businesses with tax issues. - He has assisted thousands of clients with IRS disputes, tax liabilities, and negotiations. - He is also the author of God, Money and You. - More information is available at StopIRSpain.com.

Between the lines: - The warning is not that AI is useless. - The bigger issue is that tax law depends on personal facts, and missing one detail can change the answer. - AI may be useful for preparation and education, but it is not a substitute for judgment on complex or high-stakes financial decisions.

What's next: - Liberatore is available for interviews. - Taxpayers are likely to keep using AI for quick guidance, which makes verification with a professional more important as filing decisions get more complex.

The bottom line: - AI can help taxpayers ask better questions, but it should not be the final authority on taxes.