Artificial intelligence isn’t here to take accounting jobs — but it can already do big chunks of them, and accountants can’t afford to be complacent in the face of that, according to AI expert Radhika Dirks.

With AI increasingly capable of performing many of the basic tasks of compliance work like tax, accounting and other core offerings of the profession, accountants need to evolve, she told attendees at the BDO Evolve 2025 Conference, being held this week in Las Vegas.

“The harsh truth is that the value of 80% of your skills have just dropped to zero,” said Dirks, an AI consultant who has started three separate successful AI companies. “The good news is that the value of the remaining 20% has skyrocketed. This is the expertise that you picked up by being out there in your profession that AI can duplicate. This is your intuition. This is your ability to see that something is wrong, even if you can’t explain why, and to know where to look.”

Accountants can’t afford to rest on all those laurels, however; according to Dirks, they need to ask themselves, “If AI can do everything I can do, how can I amplify myself?”

To start, both firms and accountants need to get up to speed — learning about the technology, updating their skills, and creating thoughtful approaches to integrating AI into their practices — and then keep up to speed, as AI rapidly changes.

“The pace of this technology has been incredible – so you need to continually update your strategy and your team’s skills,” she said. “This is the time to thoughtfully transform your business — but also yourself.”

This is all the more important because AI has taken the modern world by storm, and none of the normal guardrails have had a chance to adapt.

“Our laws haven’t been updated, our institutions haven’t been updated, and most important, our minds haven’t been updated,” she explained. “Every powerful technology has the potential for catastrophe. We have to treat AI with the same care as, say, nuclear technology.”

Besides making sure that individual accountants are upskilled in AI, accounting firms also need to start thinking about potential investments in the technology.

And while no one expects the average firm to invest a billion dollars in AI the way PwC did, Dirks suggested that they can learn from the Big Four firm’s approach.

“They’re empowering processes, teams and customers with AI,” she explained; the firm’s top internal uses cases are in IT, finance and marketing, where their gains range from 20-50% improvement. As an example, she cited a project PwC undertook to revamp Southwest Airline’s crew management system; thanks to AI, they were able to complete a project that would normally have taken anywhere from six months to a year in just five weeks.

Speaking later in the same session, BDO USA CEO Wayne Berson highlighted the Top 10 Firm’s own benefits from artificial intelligence.

“Today, AI is proving to be a powerful addition to our culture of innovation and a valuable addition to our approach to client service,” he said. “Since we launched ChatBDO, this tool has saved 1,200 users 600,000 hours on everyday tasks over two years. Regular users have increased their billable hours, without significantly increasing their hours spent — saving countless hours spent on administrative tasks.”

“Everyone here has an opportunity to use AI to enhance your service capabilities and to improve your businesses,” he told the attendees.

(Read more from Evolve: “Accounting’s challenge: Making it out of the canyon.”)

Tax Court judges; like-kind slip-ups; estate planning and digital assets; and other highlights from our favorite tax bloggers.

Start to finish

• Eide Bailly (https://www.eidebailly.com/taxblog): How Congress is behaving like a lazy teenager in the face of monumental tax decisions.
• Institute on Taxation and Economic Policy (https://itep.org/category/blog/): Rampant uncertainty this year extends beyond the national economy and federal policy. Many state legislatures are declaring their tax and budget debates finished and just getting started, sometimes in the same breath.
• The Wandering Tax Pro (http://wanderingtaxpro.blogspot.com/) Fifty years of professionally filing can be yours in “The Joy of Preparing Taxes.”

Benchmarks

• TaxProf Blog (http://taxprof.typepad.com/taxprof_blog/): Favorite opening of the week: “Tax practice is like comedy. Timing is critical.” Of all the corners citizens must round squarely when interacting with government, the timing requirements in the Internal Revenue Code contain some of the squarest and sharpest. Did the Supreme Court’s decision in Boechler v. Commissioner sand down some of those corners?
• HBK (https://hbkcpa.com/insights/): The Tax Court’s recent decision in Kaleb J. Pierce v. Commissioner provides guidance for valuing closely held business interests in the context of gift tax planning — and IRS scrutiny.
• Taxnotes (https://www.taxnotes.com/procedurally-taxing): To remedy an “asymmetric information gap,” this series provides a guide to each Tax Court judge. First is Judge Patrick J. Urda, and reader input is sought for future profiles. No pejorative comments, please, but there is great interest in comments about specific practices.

In action

Three questions

The Internal Revenue Service has been conducting “sweeps” in recent years to uncover cases where high-income people have not been filing taxes, but the tracking data and training need to be improved, according to a new report.

The report, released last week by the Treasury Inspector General for Tax Administration, found that high-income nonfiler sweeps cases worked on by IRS revenue officers from fiscal years 2021 through 2022 were more impactful in terms of case closures and dollars collected than similar non-sweeps cases. As a percentage of the overall cases they worked on, revenue officers secured more returns under sweeps than non-sweeps and referred significantly more returns to the IRS’s Examination function. “For tax years 2014 through 2020, revenue officers consistently collected more per sweep case than non-sweep case,” said the report.

Sweeps are a strategy employed by the IRS to either address an increase in its unassigned high-priority inventory of tax cases in an understaffed location or to support a compliance initiative, such as egregious employment tax cases and high-income nonfilers. The IRS expanded the use of sweeps between fiscal years 2019 and 2022.

Last year, former IRS Commissioner Danny Werfel announced an initiative in which it began sending notices to high-income people who haven’t been filing tax returns since 2017.

“When people don’t file a tax return they’re required to, it’s not fair to those hardworking taxpayers who responsibly do their civic duty under the laws of our nation,” he said during a press call last year. “When people don’t file their taxes, they need to know there’s a consequence. And this is why I was particularly troubled to learn when I became commissioner that the IRS had to back off our core compliance work on non-filers. Due to severe budget and staff limitations, the IRS non-filer program has only run sporadically since 2016. This program pullback didn’t happen because of lack of information. The IRS knows who these non-filers are. The IRS has the third-party information, such as through Forms W-2 and 1099, indicating these people received significant income but failed to file a tax return. The IRS has known these people are out there, and they involved some very prosperous households.”

Sweeps were conducted throughout the U.S. and internationally, the TIGTA report noted, but there were several geographic areas in the continental U.S. that have a high number of high-income nonfilers where limited or no sweeps were done. The report suggested opportunities for more sweeps in places like eastern New Mexico, western Texas, northwestern Nevada and Wyoming. 

However, it’s unclear whether the IRS will be prioritizing such sweeps in the future, given the layoffs underway at the agency. On Monday, TIGTA reported that more than 11,000 IRS employees have been laid off so far this year, or about 11% of the workforce, under the Trump administration’s efforts to reduce the size of the federal workforce, with cuts especially heavily among revenue agents, where 31% have been laid off or agreed to participate in the voluntary buyout program. 

There were other areas where the sweeps could be improved. The review found that missing, incomplete, and/or inaccurate data were found in data fields such as the taxpayer’s name, address, revenue officer identifier and case assignment date. These errors were not identified and corrected before TIGTA’s review. 

TIGTA said it worked with the IRS to make corrections so the data reviewed for the audit were accurate and complete. However, it suggested the IRS would benefit from complete and accurate data to track the results of sweeps. 

The IRS’s Field Collection team is not always using sweeps to help train and develop employee skills, the report noted. And while the sweeps desk guide provides the IRS with many opportunities to develop employee skills, managers at the IRS’s Collection unit are not always taking advantage of them. Those kinds of activities have the potential to make sweeps an even more effective tool. 

TIGTA recommended that the IRS’s Small Business/Self-Employed Division’s director of Field Collection should continue to identify and perform sweeps of all types, including assessments of high-risk geographical areas as well as issue-based sweeps. The report also suggested the IRS should regularly review sweeps data to identify and correct errors and ensure it’s accurate and complete before using it for management reporting. The IRS should also capture more information in the tracking spreadsheet so management can better assess the productivity of each sweep, the report recommended. That should include information such as which delinquent tax return modules were secured, whether any of the returns had tax assessments, and the results of specific collection initiatives. In addition, the IRS should remind all levels of management of the sweeps desk guide procedures and provide refresher training on their responsibilities in the sweeps process, the report recommended. IRS management agreed with all of TIGTA’s recommendations.

“We appreciate the audit team’s efforts to understand Field Collection employees’ experiences with Sweeps through revenue officer and manager interviews,” wrote Lia Colbert, commissioner of the IRS’s Small Business/Self-Employed division, in response to the report. “Their experiences and feedback conveyed the positive impact of Sweeps, and the importance of raising awareness of tax laws and compliance for many taxpayers in communities across the country.”