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Transcript (Note: There may be typos due to automated transcription errors.)

Brian F. Tankersley, CPA.CITP, CGMA  00:00

Randy, welcome to the accounting Technology Lab sponsored by CPA practice advisor, with your host, Randy Johnston and Brian Tankersley,

Randy Johnston  00:10

welcome to today’s technology accounting lab. We’d like to talk about another AI based tax research tool called Tax GPT. Now tax GPT has a bit of a history. They are venture backed. They’re Silicon Valley with an office address in San Francisco, and they basically have received funding from Adobe and a few others to build this engine out. Looks like it’s a still a small company, but they have some rather interesting approaches that they’re using. They say they’re an AI tax assistant for accounting and tax firms, and I think that to be true. So Brian, what would our listeners need to know about their product? You know, I know they have two specific offerings, embed tax, GPT and the AO AI tax autopilot, but I think embeds what we should talk about

Brian F. Tankersley, CPA.CITP, CGMA  01:00

first. So, so embed is a, really a tool that that offers that solves a lot of different workflows that you would have in with in an accounting firm or tax firm. It really is designed to to go through and ingest all the information and then query it, so you can get, like a client summary and other things like that, to gather information, and again, to integrate new clients into a workflow. It also has a bot that you can work with that will actually do some lead qualification and provide some context to where answers to things. And and again, it just will go through and and kind of on board folks into into your firm and provide some some real time interaction with it. Interestingly, this particular, and I’m going to skip too far ahead, but in this product, it says it provides 100% AI based 24 by seven, AI based tech support, which I thought was interesting, given that, you know, again, it’s a it’s kind of interesting to see tech support as the as the front line implemented so heavily there.

Randy Johnston  02:13

So how about the AI tax co pilot feature here? Now this also has some very interesting features in it. And, you know, they basically claim that the using this tool can save our save accounting professionals, five hours a week, so an hour a day. You know, that may be a little overstatement, unless you’re doing a lot of tax research, but what, what’s in this tax co pilot?

Brian F. Tankersley, CPA.CITP, CGMA  02:41

Well, it will actually go in. And again, it’s a generative AI tool, so you can feed documents in a situation into it, and then it will reply to things. So in particular, client email is something that that this will do in here very well. It will also, it also can be used to respond to IRS notices, you know, state and federal tax notices, like, you know, the RS CP, 2000 notices. Or they think you made an error on your return, and again it will, it will go through and do this research very, very quickly. So think of this as a very fast cut at that information that you can then look at and vet and use to folk use your time then figuring out what the alternatives are and where some of the other places can go. Here, you can actually upload client documents securely into this and use this platform for client communication, audit checks and secure document sharing. And again, these they’re they go through, and they’ve got, they’ve actually got a writer tool that will actually write correspondence for you. And I think that’s something that that accounting professionals generally have struggled with. We’re good at being right and communicating things well, but that’s because we spend a whole lot of time on it, word smithing and getting everything right. And sometimes we just need to, we just need to make some sausage and get something out there and get it, get it done. And maybe we start out with something that’s not so great, and then we trim it down and make it into the perfect thing that we want to send out by starting out with something that is imperfect and maybe a little bit pulpy that comes out of a an AI generated tool.

Randy Johnston  04:29

Yeah. So, you know, your point on this is actually kind of interesting, I think, because they claim to, you know, allow you to upload documents and manage those securely, but on this writing capability, the ability to write text memos or client email replies or IRS notice replies, or producing social media content and so forth, they claim they’ve got all that in there. Now I did not caution our listeners, like I often do. I. That you know this product is in early access. So you know, we will talk about the security and privacy policy here in a minute, and the pricing in just a moment. But we do caution you it’s a relatively new tool, but the best we can tell the back end data privacy policy is okay, but not as good as, let’s say, competitor, Blue Jay, from the best we can read. I think Blue Jay has got one of the most simple privacy policies that’s out there. This one’s a little more convoluted. But what about the pricing on this doggone thing, Brian? Because, well, you know, it’s, I’m not sure we got something to exactly compare it to. I’m

Brian F. Tankersley, CPA.CITP, CGMA  05:42

not sure we’re comparing apples to apples here, but we’re we’ve got basically for tax, GPT, they’re saying that they will provide access to us, federal, all states, territories, tax court rulings, Canadian sources, document uploads, IRS forms, tax memo and email composer and client profiles, and again, also real time tax law updates and other pieces for basically $1,000 a year. They’re comparing that to Thomson, Reuters, Bloomberg tax and cch answer Connect, which they say are 4455 a year, 8200, a year, and 12,000 a year. Now, let’s keep the main thing, the main thing here. Okay, if we’re looking at this, if something is 12,000 a year, or 8000 a year, or 1000 whatever it is, if it provides value and it is the right solution for my workflow, the pricing is almost irrelevant, just because you think about your average, you know, you think about a well run professional service firm, and you’re billing about $200,000 per FTE. And so if I’ve got somebody that’s doing this, you know, whether it’s 1000 or 12,000 it’s almost immaterial. And when I start looking at it at scale, it’s, even more immaterial. So, so as we’re, as we’re thinking about this, I want you to see that they provide a lot of things. It looks like they’re relying on the AI for for help here. And again, in in particular, they’re, they’re, they’re comparing to some of the other, some of the other solutions. Not exactly sure that Thompson, Reuters, Bloomberg and cch answer connect, don’t have the real time tax law updates. But you know, again, it’s a it’s a sales, competitive presentation. And I’m sure, from from some perspective, that that’s that’s accurate from their perspective.

Randy Johnston  07:39

So knowing that, sorry, I cut you off there, Brian, you were gonna say, go ahead, yeah, okay, so I wanted to cut us over to security for a moment, because, you know, one of the things that we have continued to be cognizant of is protecting client data. Now, the vendor claims that data security is their top priority, and that they went through the process of what we would now call table stakes using industry standard protections, 256, bit encryptions, secure data storage with SOC one and two reports that they have access controls. But

Brian F. Tankersley, CPA.CITP, CGMA  08:20

catch here. Catch here. This is third party hosted servers compliant with AICPA SOC levels one and two. Okay, yep, this is a sock on the data center environment, and not a sock on the their operations and their process. Okay? And that’s a key thing, I think, for our listeners to understand about about SOC reports is that it’s very easy for somebody to say they have a SOC one or a SOC two, but it may just be that they’re in a data center that has a SOC one or a SOC two, and then they could be running completely amok in their operations, which I don’t think these guys are under any circumstance, okay, but I think it’s important to differentiate between the SOC on the data center versus the SOC on the business operations and the organization’s code and its services, because there that’s a very important differentiating point that that some people miss, and they say, Oh, it says SOC two somewhere. So I’m going to just check the box. It’s not that easy. Yeah,

Randy Johnston  09:24

as a matter of fact, Brian, your point is exactly correct. Inherited socks are not a thing. A lot of vendors try to publish that on their website. It’s as if they have one, and you do actually have to have the sock performed on the product, not just the data center, so you’re absolutely right on on that point. And then, of course, they also go on to talk about incident response and disaster recovery. But I think those are just functions of the data centers that they live in, which are AWS and Azure. So okay, I kind of get. That side of it. But you know, everything said and done, if the tool is $1,000 a year, and if the tool keeps your data private, and if the tool has authoritative response without hallucination, which, by the way, seems it may have in those areas. Again, when I compare it against, let’s say, Blue Jay or Thompson Reuters, counselors, alders COVID product. You know, all of the big boys have to have some guarantee of of standards here. I didn’t really see a guarantee like that inside the offering, but we were aware that, you know, we want you to leverage AI in your tax and CAS and audit practice, and we recognize that this is a tool that’s getting some noise out there, even though it’s a relatively small startup. So other key things that you’d like our listeners to know today, Brian, you

Brian F. Tankersley, CPA.CITP, CGMA  11:01

know, I think, I think it’s important to try new things out. And as accounting professionals, many times, we are so focused on working in the business that we forget to work on the business. And AI is such a huge shift and a huge change for so many things in the way we we deliver professional services that I think you’re going to need to try out some different services. And so I would encourage you to to try out different ones, and again, see which, which of the generative AI tools meet your needs and learn as much as you can. Because it’s, it’s like we’re in front of a fallow field right now, and we don’t know exactly what’s going to grow when spring comes into AI into the accounting profession, but we want to, we want you to have some experience with different things so that you can start to understand and differentiate between the different products. Okay, again, I don’t think we’re at a we’re at the point yet where the where the offerings in AI are mature enough that we can say definitively, for this kind of firm, this is the best fit, and for that kind of firm, that’s the best kind of fit. I think it’s early days. And I think if you’re willing to make I think if you’re looking to be a leading edge firm, you’re going to need to try different engines and different engines you may use for different tools, and this may be one of those engines.

Randy Johnston  12:30

Yeah, absolutely on that. And, you know, I thought it was interesting. You know, with the three founders, looks like, you know, husband and wife and CPA involved, but they claim that their values are innovation, accountability, commitment, teamwork, ownership and transparency, and you know if they really are performing under the ethical standards of the profession, okay, we may have a tool that makes some sense here. Well, it is such a pleasure to have you along with us again today, we appreciate you listening in, and we’ll talk to you again soon in another technology accounting lab. Good day.

Brian F. Tankersley, CPA.CITP, CGMA  13:06

Thank you for sharing your time with us. We’ll be back next Saturday with a new episode of the technology lab from CPA practice advisor. Have a great week. You.

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