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Taxpayers are relying on ChatGPT as a “reliable source” of information and advice, threatening integrity and trust in the tax system, an expert has warned.
Concerns grow as taxpayers turn to ChatGPT for tax information and advice
05 May 2025
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8 minute read
As generative AI tools grow in popularity, the accounting industry is seeing a growing trend of taxpayers treating them as a definitive source of information for complex areas of tax law.
According to Ani Tuna, director of tax advisory at BlueRock, taxpayers are using ChatGPT to obtain answers to intricate topics such as small business CGT concessions, foregoing the professional advice of their adviser.
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Tuna said through her work at BlueRock, she was increasingly seeing this happen and had even experienced some advisors relying on ChatGPT to determine eligibility for the concessions.
“This is incredibly risky if the taxpayer or advisor does not have the appropriate knowledge needed to provide all the relevant information, or they provide incorrect information, in the prompt and they don’t have the necessary technical expertise and experience to appropriately review the results for accuracy.”
“It’s undeniable that ChatGPT is a powerful tool but its limitation in understanding the nuances of a taxpayer’s circumstances means taxpayers risk making decisions based on incomplete responses.”
Some common concession errors made by ChatGPT were that it completely missed or incorrectly applied the 90 per cent participation percentage test.
Tuna said the AI tool would forget to apply the additional conditions where the CGT assets were shares or units and would not appropriately consider the connected entities or affiliates, usually due to limited information supplied in the prompt.
“The responsibility for accuracy will always rest with the user and without the appropriate expertise and experience, taxpayers are exposing themselves to heightened risk of error and potential penalties for failure to take reasonable care,” Tuna said.
“Once we go through the nuances of the rules with the taxpayer or adviser, we’re able to illustrate the value of formal tax advice. The fact that the ATO is very closely scrutinising these concessions confirms the complexity of the rules and the need to have experts involved, particularly when the stakes are high.”
From what Tuna has experienced, even some advisers have been turning to the AI platform to find answers for their clients, which induced concern based on the level of inaccuracy and potential risks.
“The same can be said of tax agents who are willing to prepare tax returns based solely on instructions provided by a client,” she said.
“Because of this, the more practical question advisers are being faced with in practice is this: how much risk can a client knowingly take on and at what point does shifting that risk onto the client constitute a failure to meet one's own professional obligations?”
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