By Maryam Aflak, VP of Finance, Pearl.com.
Pearl.com’s August 2025 proprietary survey of U.S. adults found that 10% acted on AI tax guidance in the prior 30 days and 21% acted on AI crypto guidance. “Acted” ranged from asking AI to populate a tax return, share top stock picks, or even advising how to claim a particular tax incentive.
At the same time, independent evaluations continue to find material error rates on complex tax questions, especially when facts are nuanced or multi-year. As noted by the Taxpayer Advocate, GenAI tax advice is likely inaccurate for up to 50% of complex questions. Even if AI improves to attain a semblance of professional expertise, it may never be able to be trusted to navigate the unique attributes of complex tax cases or understand financial markets.
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In the meantime, American taxpayers aren’t waiting for AI accuracy to catch up, instead actively following its recommendations for investment purchases and tax claims, often with financially damaging results. CPAs must counsel their clients on proper use of AI or risk running into compliance issues themselves.
Why clients lean on AI – and how to respond
Multiple factors, from lower cost to perceived ease of use, are driving taxpayers and investors to consider using AI. Pearl.com’s proprietary data shows 38% of Americans have used AI instead of consulting a human expert because of its convenience and 21% cite the cost of expert services as the deciding factor. Americans are already inundated with misleading tax advice through social media, so AI might seem like a tempting “fact checking” tool by comparison.
2025 saw a sharp increase in Americans relying on reviews, online forums, and news articles instead of human professionals for tax guidance. To fill the CPA access gap, AI companies are working tirelessly to put their tools in Americans’ hands. For taxpayers, Intuit’s AI-Driven Tax Expert Platform offers “an accurate and personalized ‘done-for-you’ tax filing experience… guaranteeing maximum refunds faster.” For investors, AI chatbots like NansenAI distill waves of complex crypto information into profitable trading “advice.”
What each of these AI solutions have in common is that they claim to aggregate the entirety of available information on the tax code and financial advice. CPAs should continually remind their clients that while these models can guess the most likely response, they do not harbor any actual tax or financial “knowledge” that individual taxpayers or investors should practically apply.
Where AI gets tax and financial advice wrong
Research from university law professors Leigh Osofsky and Joshua Blank reveals that, when it comes to tax advice, AI often suffers from an issue of “simplexity,” meaning it misinterprets complex concepts in an effort to make them simple. The two discovered this issue is present even in the IRS’s Interactive Tax Assistant, finding it can characterize tax laws in ways that are overly favorable to the taxpayer.
Meanwhile, Bloomberg Tax found that, when it asked ChatGPT complex tax questions, the answers were incorrect 100% of the time. While most of the responses were on the right track, the model failed to recognize the nuances of the tax code.
Time and again, AI shows that it is not up to the task of understanding regulations created by and for human interpretation, but that doesn’t stop humans from running with its advice. Pearl.com’s proprietary data found that 19% of Americans have already lost over $100 due to following bad AI advice, yet over 1 in 4 (27%) still said AI could give them all the financial advice they’d ever need. Yet the IRS warns that an AI-advised mistake on a tax return still falls on the human taxpayer.
How CPAs can install tactical and legal guardrails
CPAs have a responsibility to identify improper AI use for tax preparation and warn clients against using its advice without scrutiny. However, CPAs should clarify in engagement letters that their professional responsibility extends only to advice they provide directly, not to AI-based guidance clients may have used independently.
To create this balance, CPAs should suggest the following strategies to help their clients:
- Demand provenance: Clients should ask AI to cite all primary sources used, list assumptions it made, and rate the confidence of its response on a numerical scale
- Treat AI’s response as a starting point: Clients should ask the AI to share a step-by-step calculation, argue the opposite conclusion, and identify what an IRS auditor would flag in its advice
- Emphasize safe practices: CPAs should ensure a client logs every AI interaction and include any AI research in their notes for defense if the advice is challenged. They must continually counsel their clients not to paste any PII into publicly available AI models
AI has opened the door for thousands of interested taxpayers and investors to learn about investments strategies and tax reporting but can just as easily lead them astray. With AI as a starting point, however, CPAs can add their human expertise to help their clients streamline and enhance their financial decisions.
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Maryam Aflak is the Vice President of Finance for Pearl.com, an AI platform for professional services. Prior to joining in 2012, Aflak spent eight years in investment banking where she raised over $800 million of capital for over 20 high-growth companies, mostly focused on traditional consumer and ecommerce companies.
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