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Navigating the “excellent storm” in tax

Company tax departments are beneath extra strain than ever. OBBBA provisions creating 2026 planning uncertainty, ASC 740 disclosure growth beneath ASU 2023-09, and post-Wayfair nexus obligations that multiply throughout jurisdictions aren’t simply including work. They’re essentially altering how tax groups should function. In the meantime, tax groups are anticipated to ship sooner and smarter insights, sustain with federal and multi-state compliance, and act as strategic companions to the enterprise. All this, whereas juggling fragmented methods and regularly restricted sources.

If this sounds acquainted, you’re not alone. In line with the 2025 Way forward for Professionals Report (FoP Report), greater than half of tax groups (51%) say they’re under-resourced, and 61% of their work is spent on tactical duties somewhat than strategic initiatives. Organizations with seen AI methods are twice as prone to expertise income progress as a direct or oblique results of AI adoption in comparison with these with extra casual or ad-hoc adoption approaches. But solely 22% of organizations have a visual AI technique, in response to the FoP Report.

In the meantime, you’re managing 50-state nexus monitoring, 2026 OBBBA planning situations, and provision deadlines that don’t transfer. The hole between what tax groups have to ship and the sources they’ve continues to widen. The excellent news is that tax departments that spend money on agentic AI are reworking how they function. Analysis that used to take hours now takes minutes. Senior tax professionals are spending much less time gathering info and extra time making use of their experience to high-stakes selections.

Why the market is shifting quick

So, what’s driving this transformation? Know-how — particularly AI. In line with the FoP Report, practically 80% of tax professionals imagine AI can have a transformational impression on their work inside 5 years. However, with the aforementioned 22% of organizations having a visual AI technique, that’s an enormous hole that presents each a danger and a possibility.

Let’s break down the forces at play:

• Knowledge progress. Tax groups are drowning in knowledge and wish higher analytics.
• Regulatory change. Compliance is now a real-time problem.
• Financial volatility. Agile planning is a should.
• Expertise shortages. Discovering and holding expert professionals is more durable than ever.

Nancy Hawkins, VP of Product Administration at Thomson Reuters, sums it up nicely:
“There’s a little bit of an ideal storm brewing within the business in the present day. The capability crunch is pairing with an increase in complexity, from knowledge explosion, macro and political financial dangers, and regulatory modifications.”

With these challenges mounting, it’s no marvel tax departments are looking for smarter options.

Agentic AI: What’s it, and why does it matter?

This brings us to the subsequent massive query: how can tax groups rise above these challenges? Enter agentic AI, however with an essential caveat.

Tax professionals maintain AI to exceptionally excessive requirements: 91% imagine AI outputs needs to be extra correct than human work, and 41% received’t use AI with out human overview except it’s 100% correct. This skepticism is warranted. Most AI instruments are educated on generic web content material, not authoritative tax sources.

That’s what makes Thomson Reuters CoCounsel Tax totally different. In contrast to conventional generative AI, agentic AI causes, plans, and breaks down complicated tax duties into manageable steps, automating workflows and delivering content-aware solutions. When paired with Thomson Reuters authoritative editorial content material, which is created by 135+ in-house tax editors and 500+ material consultants, CoCounsel Tax delivers precision and accuracy that generic AI instruments merely can not match. CoCounsel Tax is constructed for US company tax groups. Combining this agentic AI functionality together with your group’s personal knowledge to generate tailor-made responses for federal and state tax situations inside a safe enterprise surroundings.

CoCounsel Tax harnesses agentic AI

CoCounsel Tax doesn’t simply search. Slightly, it analyzes and synthesizes tax analysis utilizing an authoritative basis. That content material basis means CoCounsel Tax can give attention to complicated analyses akin to analysis the tax therapy of unsure tax positions (UTP), consider qualification standards for the R&D tax credit score, or a variety of different high-value duties together with figuring out multi-state nexus implications, all with the identical depth and citations your staff would anticipate from researching immediately on Checkpoint, however delivered in minutes as an alternative of hours.

Crucially, each response contains direct hyperlinks to main sources, professional evaluation, and the reasoning chain auditors anticipate to see. This ensures each skilled advice is defensible and audit-ready.

To your tax staff, this implies spending much less time chasing down sources and extra time making use of judgment to complicated positions. Junior workers can deal with analysis that beforehand required senior overview. And your senior managers can give attention to strategic tax planning that really strikes the enterprise ahead.

Constructing the AI-powered tax division: A strategic framework

The transformation of tax departments by AI isn’t nearly adopting new instruments. It’s about reimagining how tax capabilities function, ship worth, and place themselves as strategic enterprise companions. Profitable AI implementation requires a scientific method throughout the operation.

What an AI-powered tax division appears to be like like

The fashionable tax division leverages AI to essentially remodel its working mannequin:

• Analysis that used to require hours of handbook source-checking may be accomplished in minutes, with full citations to main sources and professional evaluation
• Advanced tax evaluation that beforehand required senior-level experience turns into accessible to junior workers with AI steerage, scaling your staff’s capabilities with out including headcount
• Each place mechanically contains the audit path your staff wants—citations, reasoning, and supply documentation that withstands scrutiny
• Tax provision and compliance workflows that after stretched throughout weeks may be compressed considerably, with full transparency into calculations and assumptions
• Questions that used to require exterior advisors can usually be dealt with internally, permitting you to order costly consulting relationships for really complicated strategic issues

As Hawkins explains, this sort of transformation can have a profound impression on tax departments: “Definitely by scaling experience throughout your groups with out having so as to add headcount, by automating a few of your day-to-day duties, by taming the information deluge and in addition simply supporting sooner and well-founded selections that you just and your groups should make.”

The four-pillar framework for achievement

1.      AI literacy and experience improvement

Construct inside experience whereas optimizing exterior relationships. This entails creating complete AI literacy packages, establishing clear governance frameworks, and creating inside champions who can drive adoption. Success means your staff can reply routine tax questions independently and reply shortly to enterprise wants with out ready on exterior sources, whereas sustaining robust advisor partnerships for complicated issues that require specialised experience.

2.      Scalable information administration

Remodel how organizational information is captured, saved, and accessed. Combine inside insurance policies, templates, historic work merchandise, and institutional information right into a unified platform that makes experience accessible throughout all ranges of the group. This ensures constant high quality supply whereas accelerating onboarding and lowering information switch dangers.

3.      Course of optimization and workflow integration

Take away operational bottlenecks by clever automation. Implement workflow automation that streamlines repeatable processes, reduces overview cycles, and eliminates handbook handoffs. Deploy embedded templates and guided workflows that preserve high quality whereas rising throughput. This pillar focuses on making the whole division extra environment friendly and responsive.

4.      Strategic AI and automation funding

Deal with options that ship measurable productiveness positive factors whereas sustaining the accuracy and auditability of tax work calls for. Prioritize platforms that assist end-to-end process automation, present safe environments for delicate knowledge, and supply the flexibleness to adapt to altering enterprise necessities. The emphasis needs to be on complete options somewhat than level instruments that create extra complexity.

Implementation priorities

In line with the Way forward for Professionals report, two-thirds (65%) of execs who’ve private AI targets aren’t conscious of their group having an AI technique, whereas 38% of organizations with AI methods have professionals with out private AI targets. Success requires coordinated execution throughout all 4 of the above pillars, together with the next:

• Management alignment on AI technique and useful resource allocation
• Change administration that addresses each technical and cultural transformation
• Coaching and improvement packages that construct confidence and competency
• Measurement and optimization to trace progress and refine approaches
• Threat administration to make sure safety, compliance, and high quality requirements

This built-in method positions tax departments to shift from reactive compliance capabilities to proactive strategic companions, delivering enhanced worth whereas managing rising complexity and useful resource constraints.

Your subsequent steps to include agentic AI in company tax

The way forward for tax is being formed by those that embrace AI strategically. Market leaders are already gaining a aggressive edge, whereas others danger falling behind.

So, the place do you start?

Begin by seeing what’s potential. By taking step one, you’ll start reworking your tax operate from reactive to strategic. Watch our on-demand webcast, CoCounsel Tax – Past Analysis, to find out how main tax groups are utilizing agentic AI to automate analysis, scale experience, and unlock new ranges of productiveness, all whereas sustaining the safety and accuracy required in in the present day’s regulatory panorama.