The Australian Taxation Office (ATO) has issued a stark warning to taxpayers regarding the reliance on AI tools, such as ChatGPT, for tax advice as the end of the financial year approaches. With tax time looming, many individuals are seeking ways to maximise their refunds, but the ATO’s second commissioner, Jeremy Hirschhorn, cautions against using AI for this purpose.
AI tools have surged in popularity for various tasks, including work assistance and meal planning, but Hirschhorn insists their application in tax matters should be avoided. He expressed this sentiment at the Financial Review AI Summit, noting, “I would caution against using AI for your tax advice.”
Hirschhorn compared AI advice to tales exchanged over a barbecue, highlighting its potential unreliability. “Tax is small changes in facts that make a big difference in outputs, and so it’s very hard for an AI model to get those nuances,” he explained. He stressed the importance of getting accurate Australian tax information, urging the audience, “please don’t use ChatGPT for your tax advice.”
The cautionary advice is echoed by Jenny Wong, the tax lead at CPA Australia. She reiterated the need for scepticism regarding AI tools, stating, “AI tools are only as good as the information you put into them.” Wong warned that while it may be tempting to seek tax tips from these bots, they cannot effectively navigate the intricacies of the Australian tax system or individual circumstances.
The ATO is not only concerned about the reliance on AI for advice but is also aware of taxpayers using such tools to create fraudulent documents, including falsified invoices. An ATO spokesperson highlighted recent instances of taxpayers submitting these fraudulent documents during audits. The ATO has mechanisms in place to cross-check financial data against bank records, and those caught fabricating documents could face serious consequences, including financial penalties and criminal investigations.
It is crucial for taxpayers to understand that they are ultimately accountable for all information presented in their tax returns. Relying on inaccurate information from AI tools could result in severe repercussions, such as significant fines or criminal charges. “Exaggerating a claim could have severe consequences; making false tax claims could lead to hefty fines, a criminal record, or even imprisonment,” the ATO warned.
As tax time approaches, the ATO’s message is clear: when it comes to tax advice, individuals should seek guidance from qualified professionals rather than relying on AI tools, which are incapable of comprehending the nuanced and specific nature of the Australian tax landscape.
