How WCG Is Using AI in Tax Return Preparation

The tax industry is fixated on AI tax return preparation. Every conference, every vendor demo and every LinkedIn post promises a machine that swallows your source documents and spits out a finished tax return. We spent months testing five of the major players, and our conclusion has not changed: AI tax prep is not quite there yet. Most tools handle data extraction or partial preparation, then hand off to commercial tax software that runs its own diagnostics anyway. The last mile still belongs to humans.

As such, WCG CPAs & Advisors is pointing AI somewhere else. Rather than asking AI to prepare tax returns, we are using it to support the work our tax professionals already do: review tax returns, analyze year-over-year changes, reconcile actual results with tax projections, and identify tax planning and strategy opportunities. We already do these things. AI gives us another way to organize the information, extend the analysis and share more of it with our clients.

And that last part is important. We are not investing in AI because our accountants need a computer to tell them how to do their jobs. We are investing in it because there is more to a tax return than the amount you owe or the refund you receive.

The Workflow: Scrub, Brief, Narrative

Preparation still runs through SurePrep, best in class, and UltraTax for 2026 tax returns filed in 2027. Once a tax return is prepared, it moves into Filed, our AI tax analysis partner, and that is where AI enters the picture. With a cigar. Looking pompous.

We gave each step a name that works in everyday office conversation, because accountants already have enough acronyms to make the alphabet nervous.

Tax Package

The source documents, prior-year tax return, current-year tax return, tax projection and any relevant tax strategy recaps are assembled into one package. This gives Filed the historical information and planning context needed to analyze the current tax return, rather than looking at a single year in isolation.

Safehouse

Our SOC 2 Type II-compliant environment inside Filed, where the Tax Package is securely loaded from ShareFile. For this workflow, client data touches AI inside this controlled environment and nowhere else. Sensitive personal information is masked before AI processes it, data is encrypted on U.S. servers, and the AI providers retain nothing after processing. That last feature is called zero data retention, or ZDR. The name might be playful, but the security is not.

Scrub

Filed performs an additional layer of analysis across the Tax Package, comparing the prepared tax return with source documents, prior-year results and tax projections. It organizes significant changes, highlights items warranting professional judgment and identifies potential planning opportunities. For example, it might highlight tax basis considerations surrounding an RSU stock sale, summarize differences between federal and state tax treatment, or reconcile projected taxes with the final tax return. We also incorporate WCG’s established tax positions, including our approach to reasonable officer compensation (among several), so the analysis understands the context of our work. These are all matters our tax professionals already consider. The scrub gives us another structured view of the information.

Brief

The results of the Scrub are organized into a concise Brief for the reviewing tax professional. It brings together significant year-over-year changes, tax projection comparisons, relevant tax considerations and potential planning opportunities in one place. The Brief supplements our existing review procedures and gives our reviewer a useful reference alongside the tax return and supporting documents. No brief, no review.

Review

Your WCG Client Manager performs the professional tax return review, evaluating tax treatment, supporting documentation, reporting positions and opportunities identified throughout the process. The Filed analysis is another resource available to the reviewer, not a replacement for professional judgment. Our tax professionals remain responsible for the quality and accuracy of your tax return.

Narrative

Once the professional review is complete, Filed helps turn the tax return into something clients can actually understand. It drafts a plain-English explanation of the results, including year-over-year changes, taxable income, effective tax rates, tax bracket utilization, rental property and investment activity, and the results of prior tax planning strategies. Your WCG team reviews and refines the narrative before delivery. The goal is not another tax document. It is helping you understand what happened, why it happened and what we might consider doing next.

Why Safehouse? WCG is organized into Pods. The people running them are Podfathers and Podmothers, and each has a Capo as their second in command. Once you have a Godfather… err… Podfather and a Capo, the place where the family keeps its valuables pretty much names itself.

The name is a joke. The security behind it is not.

Curious what a Brief looks like? Our sample Scrub and then Brief uses made-up numbers to illustrate the process. It uses red, yellow and green indicators to help prioritize items for professional review, compares actual results to the client’s tax projection, highlights significant year-over-year changes (including amounts moving more than $1,000 or 10%), and organizes questions, tax considerations and planning opportunities.

Those colors are not an AI grade of our accountants or a declaration that a tax return is right or wrong. They are simply a way to organize information and direct attention where it is most useful.

The tax projection comparison is particularly interesting. We spend considerable time during the year projecting taxes and recommending strategies. The brief brings that work back into the conversation by comparing what we anticipated with what actually happened. It connects tax preparation with tax planning, rather than treating them as separate events.

Around the office it sounds like this: “It’s in the Safehouse, scrubbed, reviewed, and the Narrative went out Tuesday.”

No AI Without HI

You cannot have AI without HI, and at WCG, HI stands for Human Intelligence.

Filed can analyze tax data, organize observations and draft explanations. What it cannot do is replace the experience, judgment and accountability of a tax professional.

Our tax professionals determine the appropriate tax treatment, evaluate planning opportunities and make recommendations based on each client’s circumstances. AI helps organize the information and communicate those conclusions.

And the distinction matters. An AI system might identify an unused retirement contribution opportunity, but deciding whether that contribution makes sense requires understanding your cash flow, business plans, other investments and financial priorities. A Roth conversion might look attractive on a tax bracket chart, but that is only part of the decision.

The computer does not know your business, your family or your plans for next year the way your WCG team does. The tax professional remains responsible for the work. The computer doesn’t sign the tax return, and it never will.

Is AI Saving Us Time? Nope.

Every AI provider eventually asks us the same question: is AI saving you time?

Our answer surprises them. Nope. At least not yet.

We already have a disciplined tax preparation and review process. Adding an AI Scrub, reading the resulting Brief and preparing a client Narrative introduces more work, not less. We are not using AI because we suddenly discovered a way to prepare tax returns in half the time. That would be neat.

We are using it because there is value in the additional analysis and in how that analysis is organized and delivered.

Consider a tax return that includes an S Corp, two rental properties, several investment accounts and a Roth conversion. Our tax professionals already know how to review those activities, evaluate the tax treatment and identify planning opportunities. That is everyday WCG life. Filed can help pull the relevant information into a consolidated analysis, compare it with the tax projection and organize the results into a Narrative the client can understand, and we can explain in a short conversation.

That does not make the tax accountant smarter. It makes the information more accessible and potentially more useful to the client.

And there is a benefit to consistency. Our tax professionals have different areas of expertise, different client portfolios and different workloads. A common analytical framework helps standardize how information is presented and which comparisons are readily available, without forcing every tax professional into the same conclusions.

The goal is not to substitute a checklist for professional judgment. It is to make more information available to support that judgment.

We will gladly spend a little more time if it means providing clients with more meaningful information.