International Journal For Multidisciplinary Research

E-ISSN: 2582-2160     Impact Factor: 9.24

A Widely Indexed Open Access Peer Reviewed Multidisciplinary Bi-monthly Scholarly International Journal

Call for Paper Volume 7, Issue 4 (July-August 2025) Submit your research before last 3 days of August to publish your research paper in the issue of July-August.

AI-Powered Tax Preparation: Accuracy, Bias, and Compliance Implications of Automated Tax Systems

Author(s) Ms. ATHIRA T A Thazhathuveettil
Country India
Abstract The integration of artificial intelligence (AI) into tax preparation systems represents a fundamental transformation in how individuals and businesses comply with tax obligations. This study examines the accuracy, bias, and compliance implications of AI-powered tax preparation tools, analyzing their impact on taxpayer behavior, audit outcomes, and revenue collection. Through a mixed-methods approach combining quantitative analysis of 50,000 tax returns processed by AI systems and qualitative interviews with 200 taxpayers and 50 tax professionals, this research reveals significant disparities in AI performance across demographic groups and income levels. While AI systems demonstrate superior accuracy for standard returns (97.3% vs. 94.1% for human preparers), they exhibit systematic biases against minority taxpayers and complex financial situations. The findings indicate that AI adoption could exacerbate existing inequalities in tax compliance while potentially reducing overall preparation costs by 40-60%. This research provides critical insights for policymakers, technology developers, and tax practitioners navigating the digital transformation of tax administration.
Keywords rtificial Intelligence, Tax Preparation, Algorithmic Bias, Tax Compliance, Digital Taxation, Machine Learning, Tax Technology
Field Business Administration
Published In Volume 7, Issue 4, July-August 2025
Published On 2025-08-14
DOI https://doi.org/10.36948/ijfmr.2025.v07i04.53468
Short DOI https://doi.org/g9w7hz

Share this