Tax industry trends for 2026

Thomson Reuters released its 2026 State of Tax Professionals Report, and the headline is hard to miss: tax, audit, and accounting firms are experiencing a newfound surge of optimism. Profits are healthy, advisory work is expanding, and firms are adopting AI and automation at unprecedented rates. 

However, concerns about accuracy and authority persist, along with workload and staffing challenges for slow-to-moderate adopters. Here’s what the survey data from over 600 respondents has to say about where the profession stands, and what it means for your firm’s technology plan. 

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1. AI investment just had its biggest year yet 

2. The adoption gap between large and small firms is widening 

3. Clients are starting to expect AI-enabled service 

4. Accuracy concerns are still the elephant in the room 

Where does this leave tax firms heading into the rest of 2026? 

1. AI investment just had its biggest year yet 

Efficiency remains the top strategic priority for tax firms, cited by 52% of respondents (up from 44% last year). The clearest path to efficiency: AI adoption. 

Investment in AI has climbed sharply three years running: 

57% of respondents say AI is now their top technology investment priority 
That’s up from 47% in 2025 
And up from 35% in 2024 

AI integration was the only tax industry trend with statistically significant year-over-year growth in this year’s survey. Meanwhile, spending on foundational IT (hardware upgrades, technical support) dropped considerably, a sign that firms have largely moved past basic infrastructure and are now focused squarely on productivity. 

Automation is following a similar trajectory as well.  

Only 11% of firms report using no automation at all, down from 18% in 2025 
44% of respondents now automate up to a quarter of their tax workflow  
27% say they’re automating up to half. 

2. The adoption gap between large and small firms is widening 

Every firm’s technology journey is unique, but firm size tends to be a fairly reliable indicator. 

Among large firms (30+ professionals), 63% describe themselves as in the “proactive” or “optimized” stage of tech development.  
Among small firms (1-3 professionals), that number drops to 35%. 

The barriers are mostly resource-based, not attitude-based: 

51% of respondents cite lack of time and resources as a top barrier to further automation 
47% cite the cost of implementation 
Internal resistance to change and workflow complexity round out the top concerns 

This is one of the clearer tax industry trends 2026 has produced so far: bigger firms are pulling further ahead technologically, which means smaller and midsize firms have a narrowing window to close the gap before the competitive divide becomes permanent. 

3. Clients are starting to expect AI-enabled service 

The Thomson Reuters Future of Professionals Report 2026 found another interesting tax industry trend among corporate clients who buy professional services. 78% say receiving AI-enabled quality improvements from their providers is very important or essential. Yet only 6% say most or all of their current providers are actually delivering on that. 

That gap has real financial consequences. Nearly a third of corporate clients (32%) say they’ve already reconsidered (or plan to reconsider within the next 12 months) their relationship with a firm they feel is falling behind on AI. Among those clients, a third estimate more than $1 million in annual work is at stake.

4. Accuracy concerns are still the elephant in the room 

Here’s where the “AI is winning” narrative gets more nuanced, and where the two reports connect most directly for 2026 tax industry trends:

Professionals are using AI constantly (74% now use it several times a week, according to the Future of Professionals survey).  
However, 41% say they lack access to AI tools that are actually built for professional work and grounded in verified content. 

That distinction matters more in tax than in almost any other profession. When asked what they need from an AI tool to trust it with real client work, professionals were clear: 

96% say it must safeguard confidential data 
94% say outputs need to be grounded in authoritative content 
90% say the reasoning behind an output needs to be explainable and defensible 

That’s why accuracy and authority are two of the biggest tax AI trends for 2026. General-purpose AI tools can draft an email or summarize a document, but they weren’t built to reason through the Internal Revenue Code, cite the right authority, or hold up under an accuracy review.  

When AI gets something wrong in a tax return or client memo, the professional signing off on it is still the one who owns that mistake. That’s exactly why “professional-grade” (or a step above, Fiduciary-Grade AI™) is becoming its own category, separate from consumer AI, and why firms that treat AI adoption and AI accuracy as two sides of the same decision are the ones pulling ahead. 

Where does this leave tax firms heading into the rest of 2026? 

Put these 2026 tax industry trends together and the picture is consistent: AI adoption is no longer much of a debate. Trust, accuracy, and fit are the real variables going forward.  

Firms that invest in AI tools built specifically for tax (trained on authoritative source material, with citations and reasoning a preparer can actually verify) are the ones positioned to capture the efficiency gains without taking on new liability risk. 

That’s the thinking that Thomson Reuters built into CoCounsel Tax, the Fiduciary-Grade AI assistant built specifically for tax and accounting work. CoCousel Tax is trained on Checkpoint content and IRS code, so research is reliable, automation is accurate, and analysis is tailored to each client’s tax plan based on up-to-date regulations. 

Two other tax AI platforms from Thomson Reuters:  

Ready to Review: Automates 1040 tax returns so your team can jump to review in record time. 
Ready to Advise: Analyzes client data and creates custom tax plans and strategies for each client. 

If accuracy has been the hesitation holding your firm back from going all in on AI, check out our information page to see what integrated, Fiduciary-Grade™ AI really looks like.