Accounting
AI implementation at firms grows 34% in one year
AI productivity and search solutions represented the biggest growth area for technology implementations, yet the proportion of firms that actually use them remains in the minority.
Part of this lag is due to concerns over data security and privacy risks (44%), and accuracy (43%), but another reason is the perception of high costs to implement and monitor AI (35%). These concerns are consistent regardless of location, firm size or how positively or negatively one feels about AI adoption. If one wishes to get more granular, firms in the Asia-Pacific region cited limited knowledge of AI implementation as a major concern, firms in the EU were worried about degradation of skills, and firms in the U.S. expressed worry that their clients do not trust AI. Wolters Kluwer noted, though, that the specific concerns a firm has tends to depend on how they view AI unto itself.
Kittipong Jirasukhanont/phonlamaiphoto – stock.adobe.com
“Firms that view AI negatively often worry about its potential impacts on decision-making, job replacement and reduced personal contact with customers,” said the survey. “Conversely, enthusiastic firms are more concerned with implementation costs, lack of expertise, and potential challenges in integrating AI with existing systems. These concerns highlight practical adoption issues, rather than objections to the technology itself.”
In terms of how firms plan to utilize generative AI, the top use case at 60% was client communications, which could theoretically range from simple emails to newsletters to engagement letters and more. In second place, at 50%, was using it as a productivity tool or assistant; in third place, at 48%, was scanning documents and data directly into a form or workflow; in fourth place, at 46%, was conducting tax, audit and accounting research; and, in fifth, at 39%, was bookkeeping automation.
The main benefits that accountants see in terms of AI include streamlining tasks (60%), automating processes (50%), reducing costs while boosting productivity (40%), and improving the accuracy of tax calculations (38%). However, 42% of firms that feel negatively about AI adoption are unable to see any positives at all.
The survey found that the interest in AI, and in implementing AI solutions, scales with firm size. Microfirms, defined as those with one to four employees, were generally the most skeptical, with only 33% feeling positively about the impact of AI on the profession. Meanwhile, 54% of small firms (five to 19 employees), 61% of mid-size firms (20-49 employees), and 80% of large firms (50+ employees) felt the same. Wolters Kluwer also noted that, regardless of firm size, high performing firms are more likely to implement the use of this technology; 21% of such firms (defined as those that experienced revenue growth of 5% or more in the past year) intended to implement AI-enabled tools next year, versus 19% of firms overall.
The survey also found that at least some firms think AI might necessitate changes in billing models, as increased efficiencies will make the traditional hours-based fee structure problematic from a revenue perspective, though respondents seem divided on this matter. Those saying the chance of hours-based pricing being replaced by subscription or value-based pricing is slight or not at all likely were 43% of the sample, but those 29% thought it was at least somewhat likely and 28% said it was extremely or very likely. Wolters Kluwer noted, though, that firms are already starting to head in this direction.
“This does not mean that firms are not changing business models: 19% of firms have recently changed their billing model to subscription or value pricing and an additional 19% of firms intend to make the change in the next year,” said the report. “The industry seems to be maintaining a cautious approach to changing established billing practices. However, this change may become essential to staying competitive, more so when considering the 29% of firms that find it ‘somewhat likely’ that billing models will change.”
While AI search and productivity tools represented the biggest growth area in terms of technology implementations, in terms of absolute proportions it was only third. The survey found that 44% of firms implemented client accounting solutions (up from 25% the previous year), and 39% of firms implemented client portal solutions (up from 28% last year).
The House unanimously passed four bipartisan bills Tuesday concerning taxes and the Internal Revenue Service that were all
- H.R. 1152, the Electronic Filing and Payment Fairness Act, sponsored by Rep. Darin LaHood, R-Illinois, Suzan Delbene, D-Washington, Randy Feenstra, R-Iowa, Brad Schneider, D-Illinois, Brian Fitzpatrick, R-Pennsylvania and Jimmy Panetta, D-California. The bill would apply the “mailbox rule” to electronically submitted tax returns and payments to allow the IRS to record payments and documents submitted to the IRS electronically on the day the payments or documents are submitted instead of when they are received or reviewed at a later date. The AICPA believes this would offer clarity and simplification to the payment and document submission process while protecting taxpayers from undue penalties.
- H.R. 998, the Internal Revenue Service Math and Taxpayer Help Act, sponsored by Rep. Randy Feenstra, R-Iowa, and Brad Schneider, D-Illinois, which would require notices describing a mathematical or clerical error to be made in plain language, and require the Treasury to provide additional procedures for requesting an abatement of a math or clerical error adjustment, including by telephone or in person, among other provisions.
- H.R. 517, the Filing Relief for Natural Disasters Act, sponsored by Rep. David Kustoff, R-Tennessee, and Judy Chu, D-California. The process of receiving tax relief from the IRS following a natural disaster typically must follow a federal disaster declaration, which can often come weeks after a state disaster declaration. The bill would provide the IRS with authority to grant tax relief once the governor of a state declares either a disaster or a state of emergency and expand the mandatory federal filing extension under Section 7508(d) of the Tax Code from 60 days to 120 days, providing taxpayers with more time to file tax returns after a disaster.
- H.R. 1491, the Disaster related Extension of Deadlines Act, sponsored by Rep. Gregory Murphy, R-North Carolina, and Jimmy Panetta, D-California, would extend the amount of time disaster victims would have to file for a tax refund or credit (i.e., the lookback period) by the amount of time afforded pursuant to a disaster relief postponement period for taxpayers affected by major disasters. This legislative solution would place taxpayers on equal footing as taxpayers not impacted by major disasters and would afford greater clarity and certainty to taxpayers and tax practitioners regarding this lookback period.
“The AICPA has long supported these proposals and will continue to work to advance comprehensive legislation that enhances IRS operations and improves the taxpayer experience,” said Melanie Lauridsen, vice president of tax policy and advocacy for the AICPA, in a statement Tuesday. “We are pleased to work closely with each of these Representatives on common-sense reforms that will benefit taxpayers, tax practitioners and tax administration and we’re encouraged by their passage in the House. We look forward to continuing to work with Congress to improve the taxpayer experience.”
The bills were also included in a recent Senate
The House also passed two other tax-related bills Tuesday that weren’t endorsed in the recent AICPA letter.
- H.R. 1155, Recovery of Stolen Checks Act, sponsored by Rep. Nicole Malliotakis, R-New York, would require the IRS to create a process for taxpayers to request a replacement via direct deposit for a stolen paper check. If a check is determined to be stolen or lost, and not cashed, a taxpayer will receive a replacement check once the original check is cancelled, but many taxpayers are having their replacement checks stolen as well. Taxpayers who have a check stolen are then unable to request that the replacement check be sent via direct deposit. The bill would require the Treasury to establish processes and procedures under which taxpayers, who are otherwise eligible to receive an amount by paper check in replacement of a lost or stolen paper check, may elect to receive such amount by direct deposit.
- H.R. 997, National Taxpayer Advocate Enhancement Act, sponsored by Rep. Randy Feenstra, R-Iowa, would prevent IRS interference with National Taxpayer Advocate personnel by granting the NTA responsibility for its attorneys. In advocating for taxpayer rights, the National Taxpayer Advocate often requires independent legal advice. But currently, the staff members hired by the National Taxpayer Advocate are accountable to internal IRS counsel, not the Taxpayer Advocate, creating a potential conflict of interest to the detriment of taxpayers. The bill would authorize the National Taxpayer Advocate to hire attorneys who report directly to her, helping establish independence from the IRS.
House Ways and Means Committee Chairman Jason Smith, R-Missouri, applauded the bipartisan House passage of the various bills, which had been unanimously passed by the committee.
“President Trump was elected on the promise of finally making the government work better for working people,” Smith said in a statement Tuesday. “This bipartisan legislation helps fulfill that mandate and makes improvements to tax administration that will make it easier for the American people to file their taxes. Those who are rebuilding after a natural disaster particularly need help filing taxes, which is why this set of bills lightens the load for taxpayers in communities struck by a hurricane, tornado or some other disaster. With Tax Day just a few days away, we must look for common-sense, bipartisan ways to make filing taxes less of a hassle.”
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