Hate taxes? H&R Block’s new AI chatbot aims to reduce your tax frustrations
Like a spoonful of mustard or mayonnaise – or maybe you prefer sriracha? — it seems no software recipe is complete these days without a touch of generative AI. The groundbreaking technology plays games better than you, writes songs for you… oh well it could even be your girlfriend (to each his own). And now it can help you with life’s toughest challenge: taxes.
In mid-December, H&R Block quietly announced AI Tax Assist, a generative AI tool powered by Microsoft’s Azure OpenAI Service. The new offering leverages the tax giant’s decades of experience in tax preparation and leans on its stable of more than 60,000 tax professionals to answer your thorniest questions about U.S. and state tax laws: Can I deduct this new laptop? Is this a personal expense or a business one? How many roads does a man have to travel before travel is officially part of his job?
We see AI as one of the defining technologies of our time.
Sarah Bird, AI Responsible, Microsoft
In a press preview on Thursday, January 25 in New York City, H&R Block announced a new tool designed to simplify importing last year’s tax returns from competitors. And it gave Ny Breaking the opportunity to try out the new AI assistant software and talk about the future of tax preparation.
“We see AI as one of the defining technologies of our time… but only if we take responsibility for it,” explains Sarah Bird, who serves as global leader for responsible AI at Microsoft. (Bird was virtual during the event, due to possible Covid exposure.) Microsoft’s Azure OpenAI service lets developers easily build generative AI experiences, using a range of pre-built and curated models from OpenAI, Meta and beyond. Her team helps companies like H&R Block ensure their tools use the highest quality training data, guide you with smart prompts, and more. “It’s really a best practices implementation in responsible AI,” she said.
H&R Block notes that the technician will not file or even fill out your forms; it just answers questions. But if you’re hesitant to even ask AI for tax advice, you have good reason. The technology is notorious for hallucinations, where it simply makes up the answers to questions when it can’t find the right answer. Some experts worry the problem may never be solved. “This is unsolvable,” Emily Bender, a professor of linguistics at UW’s Computational Linguistics Laboratory, told the Associated Press last fall. “It is inherent in the disconnect between the technology and the proposed use cases.”
One answer to the problem is to start with the right training data. If the AI has reliable, reliable data sources to sift through, it can find the right answer, saving you from having to hunt through the Kafka-esque bowels of the IRS looking for the Schedule B instruction form or whatever. And off-the-shelf large language models (LLMs) simply don’t have that data, explains Aditya Thadani, VP of Artificial Intelligence Platforms for H&R Block. Ask ChatGPT 4 a question, he noted, and you risk missing out on something new: the cutoff date for that LLM’s data sources is April 2023.
“The IRS has since released a number of changes,” he told attendees at the H&R Block event. “They’re making changes well into December and January, well into tax season. We will make sure you get all that information.”
To try out the new system, Ny Breaking sat down with some sample data and asked a few test prompts: Am I missing any deductions? Can I deduct a car as business expenses? And so forth. The chatbot provided reasonable directions: a few paragraphs of information from H&R Block’s extensive data catalog, links to find more information, and so on. The company says it can answer questions about tax theory, clarify tax terms and provide advice on specific tax rules. And crucial to the entire experience: live, human beings – even CPAs! – are always just one click away.
“What if we’re not completely sure? Don’t guess. Give an answer that we really trust,” Thadani said. And if you don’t get the answer you’re looking for from the AI, you can get it from the tax professional.”
Privacy is important: who sees your data?
It’s difficult to discuss emerging technology without touching on privacy, and both Microsoft and H&R Block are well aware of the risks. After all, an individual’s tax returns are highly personal and confidential – one of the reasons they have become so popular in the US presidential elections. Should a company be allowed to train an LLM on your data?
“We have a lot of personal, private information,” Thadani admitted. “As much as we want to use that to answer questions effectively, we have to continue to find the balance.” So the assistant will not remember you. It doesn’t process your tax forms to answer the questions you ask. And the intention is that other people will not benefit from your questions later.
The new software also takes advantage of one of the quirks of our modern software assistants. We don’t necessarily talk to them like adults. We are trained to ask Alexa or the Google Assistant to interrupt half words and sentences. Meanwhile, chatbots can communicate in natural language. H&R Block’s tool works well in both spaces, Bird explained.
“It’s incredibly empowering because it allows people to speak in words they feel comfortable with,” she said. This is the real power of technology in a nutshell: “Make a complex thing more accessible to people, because technology meets them where they are.”
Now if only it could help us take a few holiday pounds off our waistlines.