H&R Block is now using IBM Watson to find tax deductions

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Getting your taxes done is miserable. It’s complicated, time-consuming and costly — particularly for people whose financial situation requires them to seek help from tax professionals. The process is such a mess, even for said professionals, that H&R Block, one of the largest tax services providers, is partnering with IBM Watson to help make the process go more smoothly. Yes, that’s right — we now need machine intelligence to save us from our taxes.

Watson will use natural language processing to parse tax documents and relate statements back to the 74,000-page federal tax code. It’s not hard to see how a machine would excel at this clearly defined search task. These are just the sorts of problems that machines tend to outperform humans in solving.

There are a number of things that could be automated in the tax preparation process, but H&R Block decided to focus on identifying deductions and credits. The consumer-facing approach will do the firm well. At the end of the day, most people really only care about paying as little in taxes as possible and maximizing the size of their refund.

Using tax documents as a corpus for training Watson, IBM was able to fine-tune its system for H&R Block. Because Watson is constantly receiving more tax documents year in and year out, it will improve over time. H&R Block will benefit from a more accurate artificial companion each new tax season. This is on top of any changes IBM makes to the core Watson infrastructure.

H&R Block will be publicly pushing the new partnership heavily in the run up to tax season. The company purchased its first Super Bowl ad in eight years to highlight Watson’s capabilities. Beginning Sunday, February 5th, H&R Block customers will be able to interact with the new system at the company’s retail locations.