How to prepare your corporate tax department for AI

Highlights: 

4% of tax professionals welcome new technology, with 42% exploring AI
AI enhances rather than replaces tax professionals, acting as a “digital junior resource” for repetitive tasks
Successful AI integration requires building trust, experimentation, and starting with accessible tools in existing systems
Responsible AI demands attention to privacy, bias prevention, and oversight, with future trends

The buzz around artificial intelligence (AI) isn’t just hype anymore, especially within the corporate tax world.  94% of tax professionals express optimism about the potential of new technologies. 88% believe AI will be central to their work within the next five years. The change is already happening. The latest Thomson Reuters Corporate Tax Department Technology Report reveals that 42% of tax departments are actively exploring AI solutions.  This isn’t a future trend; it’s real, and it’s happening now,  driven by the strong promise of improved efficiency, increased accuracy, and freeing of valuable human capital for strategic work. 

This technological evolution prompted a crucial discussion in a recent Thomson Reuters webinar, “The Time is Now: Preparing the Corporate Tax Department for AI.”, moderated by Tracy Davis, Global Director – Retail & Manufacturing Industry Lead. The webinar also included insights from AI strategists Andrew Fletcher and David von Rickenbach, alongside Product Marketing expert Roshen Abraham. They tackled pressing questions facing tax leaders, including: How is AI reshaping the landscape? What are the real opportunities and challenges? And, how can you prepare your team and organization for what’s next? This summary captures key takeaways, but the full depth of strategy is available in the complete session. 

The AI wave is here: Embracing augmentation over replacement

One of the most significant reassurances emerging from the discussion is that AI in tax is primarily about augmentation, not wholesale replacement. While automation handles repetitive tasks, AI aims to enhance the capabilities of tax professionals. According to Andrew Fletcher, “Automation can sometimes be scary because that’s replacing things that have been done manually… but for us… it’s the augmentation that’s exciting and where there is the biggest opportunity.” 

Think of AI as a powerful assistant. The report highlights that 74% of respondents are prioritizing process automation – AI can supercharge this. It can sift through vast datasets, identify anomalies, handle preliminary analysis, and streamline compliance tasks far faster than manual methods allow. This lets tax professionals focus on more important things, like strategic thinking, complex advice, risk assessment, and relationship management. Tracy Davis described AI as a “digital junior resource,” addressing a critical need in the profession. “There just aren’t enough people replacing the retirees that are exiting the profession,” she noted, “So this is where the power of the digital assistant that AI is providing us comes in.” The message is clear: AI is a tool to empower tax experts, enabling them to operate at a more strategic level. 

Getting started: Cultivating trust and an experimental mindset 

Knowing AI is beneficial is one thing; successfully integrating it is another. The panel emphasized that adoption isn’t a rigid, linear process. David von Rickenbach, focusing on AI in corporate tax and trade at TR Labs, stressed, “We aim to reach our goal, but the journey won’t follow a straightforward path like steps 1, 2, 3, and 4.” This journey requires two crucial elements: trust and a willingness to experiment. 

Andrew Fletcher highlighted the importance of trust:

“Trust is crucial… trust in the tools  that you give to your people, and trust that they know their jobs… and they’ve built familiarity with those tools.”.

This involves selecting reliable AI solutions and empowering teams to use them effectively. Building this familiarity often starts small. Von Rickenbach advised focusing on “low-hanging fruits” – practical, achievable use cases using tools potentially already available. “It’s about trying it with one of the tools that you have available, creating a few hypotheses, and learning from them,” he stated. 

Roshen Abraham echoed this, advocating for an experimental mindset focused on meaningful applications. He talked about not adopting AI for technology’s sake; identify genuine pain points where it can deliver value, such as data classification or anomaly detection. Crucially, Fletcher pointed out the ease of adoption when AI is embedded within existing systems: “If you think about the best technology to use or the easiest technology to use is the one that you already have access to.” 

Early, iterative learning is key. As Abraham put it, “Early detection leads to early prevention,” emphasizing how proactive adoption can mitigate risks and maximize benefits sooner. View AI integration as a continuous learning cycle rather than a one-time implementation project. Abraham further added that fostering interest in using AI “as a co-pilot… an assistant rather than being the sole driver” is a significant factor for success. 

Navigating the hurdles: Ensuring ethical and compliant AI integration 

While the potential is immense, adopting AI isn’t without challenges. Beyond the practicalities of infrastructure and change management, the ethical and compliant use of AI is paramount in the highly regulated tax environment. Andrew Fletcher cautioned, “When we think about ethical and compliant use of AI, it’s thinking about what AI is doing here, what is appropriate, and whether I want to be handling and treating data in this way.” 

Data privacy and protection are major concerns. Tax departments handle highly sensitive corporate and personal information. Von Rickenbach stressed the need for transparency regarding data usage and robust safeguards to prevent exposure.

Furthermore, AI models learn from data, and if that data contains biases, the AI’s output can perpetuate or even amplify them. This necessitates critical human oversight. Fletcher emphasized that “There are some things where you would want a person to be making that judgment and to kind of review and decide if this is appropriate now.” Professionals need to understand how the AI reaches its conclusions and be equipped to evaluate the outputs for accuracy, fairness, and compliance. Building robust governance frameworks around AI use is not just recommended; it’s essential for responsible adoption. 

Beyond today: What’s next for AI in corporate tax? 

The current wave of AI, often characterized by Large Language Models (LLMs), is already transformative, but its evolution is far from over. Andrew Fletcher highlighted the exciting potential of “reasoning models” and “agentic systems.” These more advanced AI forms “can invest time and iterate within their own processes to improve the correctness of quite sophisticated answers,” moving beyond pattern recognition towards more complex problem-solving. While currently excelling in constrained domains like math and coding, their sophistication is rapidly increasing, promising capabilities to handle more ambiguous and complex tax scenarios in the future. Fletcher acknowledged past AI hype cycles but asserted, “this time the pace of change and the evolution of capabilities are genuinely different.” 

Another significant trend noted by Von Rickenbach is the move towards smaller, proprietary AI models. “The barrier for hosting and training your proprietary language model is coming down,” he explained. This lets companies create AI that is trained on their own data and processes. This gives them very specific solutions and could give them more control over data privacy and security. These developments signal that the AI journey in tax is just beginning, requiring ongoing learning and adaptation. 

Don’t get left behind – Prepare for the AI future now! 

The insights shared by the experts paint a clear picture: AI is rapidly becoming integral to corporate tax. It offers unprecedented opportunities for efficiency, accuracy, and strategic focus, but requires thoughtful planning, an experimental approach, and a strong focus on ethical implementation. 

Understanding how to navigate this shift, upskill your team, choose the right tools, and implement AI responsibly is critical for future success. The full webinar, “The Time is Now: Preparing the Corporate Tax Department for AI,” provides the in-depth strategies and practical recommendations you need.