An increasing number of Australian taxpayers are turning to artificial intelligence (AI) tools to prepare their tax returns, according to recent research, raising concerns about the accuracy of information and potential scrutiny from the Australian Taxation Office (ATO). A national survey conducted by Compare Club found that 36.8 percent of working Australians are either currently using or planning to use AI for their tax filings, with 9.5 percent having already abandoned professional tax assistance in favor of AI services such as ChatGPT.

The survey also highlighted widespread financial pressures, revealing that 41.3 percent of respondents had already spent or partially spent their expected tax refunds before lodging their returns. Additionally, 47.2 percent indicated that receiving a refund is now essential to maintaining their household budgets. Kate Browne, head of research at Compare Club, noted that taxpayers are seeking to maximize deductions through AI due to economic hardship but face risks in doing so. “They are gambling on making a saving of a few hundred dollars by not using a professional to do their tax return, but at the same time fear missing out on deductions in the thousands,” Browne said, describing the situation as a “minefield.”

Browne further explained that for many Australians, tax refunds have shifted from discretionary spending—such as purchasing electronics or funding holidays—to covering basic expenses. According to the survey, 36.1 percent of respondents plan to use any refund to pay bills, while 31.6 percent intend to reduce debt, underscoring the refund’s role as a financial necessity rather than a bonus.

The ATO has issued cautions regarding the use of AI for tax purposes. Assistant Commissioner Anita Challen emphasized the importance of verifying any tax advice derived from third-party sources like AI platforms. “In an environment where misinformation can spread … it’s important to pause and check your tax information before you act on it,” Challen said. She highlighted that AI tools often compile information from a wide array of sources, which can vary in reliability and may result in inaccurate guidance. “Tax misinformation often sounds convincing, but dodgy tax advice can also lead to significant penalties,” Challen warned. The ATO maintains that taxpayers are ultimately responsible for the accuracy of the information they submit, regardless of whether it was prepared by professionals, AI systems, or received from informal sources.

The survey results come at a time when many Australians are seeking cost-effective alternatives to professional tax services amid rising living costs. The increasing reliance on AI for tax preparation reflects broader economic pressures but also points to the need for caution and verification to avoid errors that could lead to disputes or penalties with the taxation authorities.