The Evolving Tax Profession: Technology, Artificial Intelligence, and the Future of Enrolled Agents

More than a decade ago, a respected leader in the tax industry told me that individual tax preparation and small tax firms would be gone within 10 years. Well, here we are—10 years later—and that prediction has not come true. While that individual was highly knowledgeable about the industry, I believe that person misinterpreted how technology and market trends would actually impact the tax profession.

Yes, innovations in technology, generational shifts, and changing market demands are reshaping the profession, but they are not eliminating it.

Technology isn’t replacing tax professionals; it’s redefining the work they do and how they do it. Processes are being streamlined, freeing up time for more advisory services and strategic firm growth. Successful tax practitioners are leaning into this shift, expanding their expertise from return preparation to financial and tax planning, small business services, and year-round client engagement. Enrolled agents are especially well-positioned to capitalize on these opportunities.

Enter artificial intelligence (AI) as a valuable tool. Artificial intelligence won’t replace the core of what tax professionals do, and that is connecting with and advising clients. It also won’t replace the trusted relationship between tax professionals and their clients. However, those who embrace automation and digital tools to enhance their work will find that they’re able to build a livelihood around their lifestyle, rather than the other way around.

Of course, there are valid questions and concerns about the use of AI. How can tax professionals use AI responsibly and ethically? Tasks such as data entry, drafting emails and memos, client correspondence, and summarizing reports or lengthy documents, are excellent starting points. For transparency, I did not use AI to write this article, but I did use it to research some of the topics, and I ran a draft through AI tools for editing and proofing.

Other tasks, such as tax research, tax planning analysis, and process automation, will require more due diligence. Be sure to vet the tools you use. Especially when it comes to research products, confirm that sources are authoritative and transparent. Using large language models can be risky if you aren’t mindful of where the information comes from. At the end of the day, everything still needs human oversight and professional judgment.

Younger generations are taking notice, too. Generation Z (born between 1997 and 2012) and Generation Alpha, coming up behind them, are digital natives. They’re rejecting traditional work structures. Their entrepreneurial aspirations, combined with the high earning potential of tax professionals and the increasing use of technology, make the tax industry an appealing option for this group.

Why is this important? Because AI and digital tools are already part of their daily lives. They will expect to work in an environment that embraces and supports these technologies. If your practice isn’t adopting these new technologies, then you could be missing an important opportunity to recruit new talent.