AI-Native Accounting Podcast · Episode 018

AI in Tax Is Moving Fast.
Are We Ignoring the Risks?

Danny Werfel, former Commissioner of the Internal Revenue Service, joins host Kacee Johnson to lay out what responsible AI adoption should look like across the tax profession.

Guest: Danny Werfel Host: Kacee Johnson Presented by Digits 51 min
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AI in Tax Is Moving Fast. Are We Ignoring the Risks? Episode cover featuring Danny Werfel, presented by Digits
Quick Take

What This Episode Covers

  • Danny Werfel, former IRS Commissioner, built an AI risk framework to help tax authorities and preparers evaluate AI systems before deployment.
  • Extraordinary productivity gains from AI should not automatically mean removing people from the process.
  • Firms need a more rigorous way to evaluate AI vendors, with accuracy, auditability, transparency, and governance at the center.
  • A significant long-term risk is the erosion of human expertise as AI agents take on work once handled by junior accountants and tax professionals.
  • Werfel's core argument: AI should sit beside the tax professional, not take their chair.

AI in tax is advancing at a staggering pace, but are tax professionals moving too fast to understand the risks?

In this episode of the AI Native Accounting podcast, Kacee Johnson sat down with Danny Werfel, former Commissioner of the Internal Revenue Service and current Executive in Residence at the Johns Hopkins University School of Government and Policy, to talk about what responsible AI adoption should look like across the tax profession.

An AI Risk Framework for Tax

Werfel recently developed an AI risk framework for tax authorities and tax preparers to help organizations evaluate AI systems before deployment. The conversation examines why extraordinary productivity gains should not automatically mean removing people from the process, how firms can more rigorously evaluate AI vendors, and why accuracy, auditability, transparency, and governance must remain central to AI risk management.

The Expertise Gap Nobody's Solved Yet

The discussion also considers a significant long-term risk: the erosion of human expertise. As AI agents begin performing work traditionally handled by junior accountants and tax professionals, the profession must determine how the next generation will build the knowledge and judgment required to supervise those systems effectively.

"AI should sit beside the tax professional, not take their chair."

Also Discussed

For accountants, tax professionals, firm leaders, technology providers, and anyone seeking to understand how AI will reshape the profession, this conversation offers an important counterweight to the race for maximum automation.

Additional Topics In This Episode

  • AI hallucinations
  • Human-in-the-loop systems
  • Client trust
  • AI pricing and billing
  • Tax as a model for responsible AI adoption