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ATO Warns Against Using AI for Tax Advice
As tax time approaches, the Australian Taxation Office (ATO) has issued a strong warning to taxpayers regarding the use of artificial intelligence (AI) tools, such as ChatGPT, for seeking tax advice. ATO’s second commissioner, Jeremy Hirschhorn, emphasized the potential dangers associated with relying on AI-generated information during a recent address at the Financial Review AI Summit.
AI Tools in Popular Use
There has been a noticeable surge in the use of AI programs for various needs, including professional assistance, meal planning, and tax-related queries. However, Hirschhorn cautioned that these AI platforms should not be trusted for tax-specific guidance. He likened the advice from AI to that of informal discussions at barbecues, suggesting that the information may be misleading or insufficiently detailed.
“Tax is nuanced, and minor variations in facts can significantly alter the outcomes,” he explained. The commissioner stressed that AI models struggle to grasp these subtleties, which are vital for accurate tax advice.
Risks of Misguided Information
Caution was further echoed by Jenny Wong, the tax lead at CPA Australia, who advised taxpayers to approach AI-generated advice with scepticism. "These AI tools are inherently limited by the quality of the data provided by users. They cannot adequately interpret the complexities of the Australian tax framework or individual situations,” Wong articulated.
Moreover, the ATO has reported an uptick in instances where AI has been employed to create fraudulent documents, such as bogus invoices. A spokesperson noted that the ATO can cross-reference financial data with bank records, indicating a readiness to investigate any discrepancies. Taxpayers who fabricate documents may face severe consequences, including financial penalties, criminal charges, and potential prison time.
Responsibility Lies with Taxpayers
Ultimately, the ATO asserts that taxpayers are held accountable for the information included in their tax returns, regardless of whether they relied on erroneous data sourced from AI. Exaggerations or false claims could lead to significant repercussions.
As the deadline for tax submissions looms, it is crucial for individuals to ensure they seek accurate and reliable advice through appropriate channels, rather than turning to unverified AI sources.
In summary, while AI tools can be appealing for quick advice, the intricacies of tax law and the potential for penalties necessitate consultation with knowledgeable professionals.
