Australians Turning to AI for Tax Returns — But ATO Warns of Risks

As the end-of-month tax return deadline looms, more Australians are using artificial intelligence (AI) to prepare their returns. While the tools may be free, fast, and easily accessible, the Australian Taxation Office (ATO) has issued a strong warning: AI can give confident-sounding but incorrect advice.

AI Use on the Rise

A survey by financial comparison site Compare Club found:

• 31% of Australians are already using AI to complete their tax returns.

• Nearly 40% rely on AI to manage their personal finances.

• 36% said they are open to using AI for financial management.

• About a quarter admitted they wouldn’t trust it at all.

Most participants reported using AI for budgeting (over 50%), followed by saving/investing (45%), and then tax preparation (31%).

ATO Issues Caution

ATO assistant commissioner Robert Thomson confirmed the office is aware that taxpayers are experimenting with AI for tax advice.

“We would just issue some caution if people are using AI to help get tax advice because there can be risks associated with it, and we know some of the AI platforms are giving incorrect advice,” he told SBS News.

Thomson stressed that tax laws are complex and vary across countries, meaning AI may pull in information that simply doesn’t apply to Australia.

He urged users to:

• Always check AI’s references.

• Verify information with credible sources such as the ATO website or registered tax agents.

• Remember: “Whether you’re using AI or not, you are still responsible for the information that goes into your tax return.”

Privacy and Scam Risks

Beyond accuracy, Thomson also highlighted serious privacy concerns.

Scammers posing as ATO representatives may exploit people’s trust, asking for sensitive details like:

• Tax File Numbers

• myGov credentials

• Bank details

• Date of birth and addresses

“Scammers will put all of that information together like a puzzle to steal your identity,” Thomson warned.

His advice: stop, think, and protect before sharing private information, and contact the ATO immediately if you suspect a scam.

Expert vs AI Advice

Despite the growth in AI usage, Compare Club’s research shows Australians still trust human expertise more than machines:

• 59% prefer advice from financial advisers.

• 44% trust government sources.

• Only 25% rated AI as a trusted source.

Head of research at Compare Club, Kate Browne, acknowledged AI’s appeal — it is low-cost, time-saving, and available 24/7 — but said people should always double-check AI-generated information.

“AI can make complex financial language more understandable, which is one of the reasons people are using it. But it should be a tool, not your only source of truth,” she said.

ATO’s Final Message

The ATO already provides more than 40 industry-specific guidelines on what Australians can claim at tax time. Thomson said these resources are safer and more reliable than relying solely on AI.

“We know people are trying to maximise their claims, but the best way to do that is to use trusted, accurate information — not advice that could be wrong.”

✅ In short: AI can help break down complex tax terms, but when it comes to your tax return, the risks of wrong advice and privacy breaches are real. Australians are urged to treat AI as a supplementary tool — not a replacement for expert guidance.