AI in tax consulting: greater efficiency, but also the risk of legislative “hallucinations”

Artificial intelligence can significantly increase tax consultants’ productivity, but it cannot replace professional judgment or assume responsibility for the answers it provides, said Adrian Luca, first vice-president of the Chamber of Tax Consultants.

Luca warns that AI tools can “hallucinate,” inventing legal provisions, court rulings or legislative references. In addition, models may provide outdated information because their knowledge ends at the date on which they were trained. One example is the standard VAT rate, which may be indicated incorrectly if the model does not include recent legislative changes.

Risks also arise when AI analyzes large volumes of documents. A tax inspection report running to hundreds of pages and appendices may exceed the tool’s context window, without the tool warning that certain documents were not reviewed. AI may also confuse terms such as tax and levy, exempt and non-taxable, or taxpayer and tax payer.

According to Adrian Luca, consultants should use AI but verify every result. A tool can identify legal provisions within seconds, quickly analyze reports or draft initial versions of documents. The time saved can be invested in tax planning, restructuring, mergers and acquisitions.

As access to information becomes easier, the value of the consultant shifts toward interpreting the law, understanding the client’s situation and taking responsibility for the final recommendation.