AI and Tax Technology: How Generative AI Is Reshaping the Future of Tax Functions
Introduction
In a business environment shaped by regulatory complexity, talent shortages, and relentless digital transformation, tax functions are under increasing pressure to evolve. Yet, for many teams, Excel spreadsheets and manual processes still dominate. This reality not only limits efficiency but also constrains strategic value.
The recent InsightSoftware webinar, “AI and Tax Technology: The Future of Innovation”, led by Adam Beittz, a seasoned solution engineer, provided a compelling look into how generative AI (GenAI) is transforming tax operations — from compliance to strategic planning. In this blog, we explore the key themes from the session, highlight practical applications, and examine how tax departments can get started on their AI journey.
The Changing Tax Landscape: More Complex Than Ever
Despite advancements in enterprise software, 59% of businesses still rely on spreadsheets for tax processes, according to a recent Venta study. While useful for ad hoc calculations, spreadsheets are error-prone, hard to test, and inefficient at scale — especially in areas like indirect tax and cross-border compliance.
Simultaneously, tax departments are facing:
- Mounting compliance demands due to global regulatory changes like Pillar 2, BEPS, and country-by-country reporting
- A shortage of skilled professionals with data analytics, automation, or AI expertise
- Burnout and stress across the accounting profession, leading to fewer new entrants and accelerating retirements
“Tax teams are spending nearly 72% of their time on routine compliance work,” shared Adam Beittz during the webinar. “This leaves little room for strategic planning or value creation.”
Why AI in Tax? The Strategic Imperative
Tax is no longer just a compliance function — it is increasingly expected to serve as a strategic partner to the business. To meet this expectation, tax teams must transition away from manual, repetitive tasks and become more insight-driven, agile, and collaborative.
This is where AI and tax technology converge.
According to recent research cited in the webinar:
- 95% of organisations report a skills gap in tax
- 80% expect generative AI to transform tax strategy in the next three years
- Yet only 43% of tax professionals feel prepared for the pace of regulatory change
Clearly, tax departments must modernise — and quickly.
How Generative AI Enhances the Tax Function
Generative AI is more than a buzzword. It is already delivering measurable results across finance and tax teams, including:
1. Faster Tax Research and Analysis
GenAI can rapidly process and summarise vast tax codes, rulings, and documentation — delivering first-draft insights or position summaries that used to take hours.
2. Automated Report Generation
AI tools now support on-demand creation of tax impact analyses, executive summaries, and regulatory disclosures — significantly reducing the time required to prepare reports.
3. Advanced Anomaly Detection
Using quantitative data models, AI can identify irregularities or outliers in tax datasets, helping teams uncover risks or missed deductions.
4. Predictive Analytics for Strategic Planning
GenAI supports scenario modelling and forecasting, enabling finance leaders to assess future tax exposures and optimise planning decisions.
5. Simplified Communication
AI tools like InsightSoftware’s Lineus can translate complex tax outputs into plain-language narratives for C-level leaders and cross-functional teams.
Real-World Example: AI-Powered Tax Workflow with Longview
During the webinar, a live demonstration of InsightSoftware’s Longview Tax platform showcased how their AI assistant, Lineus, integrates into daily workflows. Here are some examples:
- Doc Assist: Answers user queries like “Where do I enter UTP adjustments?” using internal documentation.
- Data Assist: Analyses income statements in Excel for trends and anomalies, suggesting potential tax impacts.
- Report Assist: Automatically builds and edits reports across connected data sources — even for non-tax queries like top customers or revenue by region.
This integration shows how AI can act as a context-aware assistant, guiding users through data inputs, report generation, compliance workflows, and more — all within a secure, governed environment.
Barriers to AI Adoption in Tax
While the benefits are clear, adoption still faces notable challenges:
- Data security and privacy: Tax data is highly sensitive, and public AI tools raise legitimate concerns.
- Lack of internal skills: Only 12% of tax professionals report receiving GenAI training.
- Unrealistic expectations: AI is an assistant, not a silver bullet. Human oversight is still essential.
- Data quality: Poorly structured or inconsistent tax data undermines AI’s effectiveness.
“AI can only deliver value if the underlying data is reliable. The old saying ‘rubbish in, rubbish out’ applies more than ever,” warned Adam.
Getting Started with AI in Tax: A Roadmap
To build an AI-enabled tax function, organisations must focus on four key pillars:
1. Data Readiness
Structure and centralise tax data to make it accessible and machine-readable. Platforms like Longview help unify data across processes.
2. Targeted AI Pilots
Start small — for example, automating compliance checks or generating draft memos — and expand from there.
3. Training and Upskilling
Invest in educating tax professionals on prompt engineering, validation of AI outputs, and use of secure, private AI models.
4. Trust and Governance
Develop clear AI policies around data handling, ethical use, and oversight. Transparency builds user trust and stakeholder confidence.
Q&A: AI and Tax Technology — Insights from the Webinar
Q1: Why are spreadsheets no longer a viable option for managing tax processes?
A: Many organisations still rely on Excel, but this comes with risks. Spreadsheets are prone to errors such as broken links and incorrect formulas, and they often lack proper testing or validations. This leads to a heavy burden of low-value work spent maintaining files and mitigating risks. Dedicated tax solutions provide greater accuracy, automation, and compliance confidence.
Q2: How much time do tax teams spend on compliance versus strategic planning?
A: Tax and finance teams spend nearly 72% of their time on routine compliance work such as data collection, cleansing, and tax return preparation. This leaves little capacity for strategic planning and higher-value activities.
Q3: What talent challenges are tax departments facing today?
A: Hiring skilled professionals is increasingly difficult. A Robert Half 2025 UK Salary Guide found that 52% of finance leaders want to expand headcount, but 60% face high competition for talent and 45% struggle with candidates lacking skills in data analytics, business intelligence, and automation. Burnout is also widespread, with a 2022 survey reporting 99% of accountants experience chronic work stress.
Q4: How is the tax landscape becoming more complex?
A: The frequency of new laws and regulations has increased significantly since 2017. Initiatives such as Pillar 2, public country-by-country reporting, and Pillar One are adding complexity, requiring tax functions to adapt quickly.
Q5: How can AI help tax professionals become more strategic?
A: By automating routine tasks and compliance processes, AI frees professionals to focus on high-impact contributions such as forecasting, scenario modelling, and strategic tax planning.
Q6: What are some practical applications of AI in tax today?
A: Practical examples include:
- Answering workflow queries using Doc Assist
- Analysing Excel-based reports with Data Assist
- Generating and modifying reports via Report Assist
These applications help teams gain insights faster and with greater accuracy.
Q7: What are the main barriers to AI adoption in tax functions?
A: Key challenges include data privacy and security concerns, a lack of AI implementation skills, unrealistic benefit expectations, and poor data quality. As Adam noted: “Rubbish in, rubbish out.”
Q8: How can organisations get started with AI in their tax functions?
A: Four steps are essential:
- Ensure data readiness
- Run targeted AI pilots
- Invest in training and upskilling
- Build trust and governance frameworks
Summary: The Future of Tax Is AI-Driven, But Human-Led
The webinar made one message clear: Generative AI is here to stay — and it's already transforming the tax landscape. From compliance automation to strategic planning, AI offers unprecedented efficiency, insight, and agility.
However, successful adoption depends on data governance, upskilling, and clear implementation strategies. Tax leaders must act now to ensure their teams are ready for the future — and not left behind.
InsightSoftware’s Longview Tax platform with Lineus AI demonstrates how modern tools can integrate AI into day-to-day workflows, empowering tax professionals rather than replacing them.
👉 Missed the webinar?
You can watch it on-demand here:
AI and Tax Technology: The Future of Innovation
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