The tax profession is at an inflection point in which compliance work is becoming commoditized by technology, pushing both corporate tax departments and their outside tax firms toward strategic advisory roles
Key takeaways:
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Data is your foundation, not AI — Before investing in AI tools, corporate tax departments are finding they need to centralize and automate their data across multiple ERP systems because clean, accessible data often determines whether technology implementations succeed or create additional problems.
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Compliance is becoming commoditized — Specialization creates differentiation, and tax firms are discovering they can no longer differentiate themselves through basic compliance work that technology can complete in seconds. That means that successful practices are going deep into emerging fields like crypto, providing strategic insights that generic practices can’t match.
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Learning to tell the story behind the numbers — A valuable skill for in-house tax professionals is becoming data fluent enough to analyze outputs and communicate tax implications to non-tax stakeholders. This ability to translate complexity into actionable business advice can transform your tax department from a cost center into a strategic partner.
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If you’re spending most of your week on manual data entry and routine compliance work, you’ve likely noticed the ground shifting beneath the tax, audit & accounting profession. The work that defines value in tax is changing and has been for a while, and now more and more tax professionals are grappling with what that means for their careers.
What’s becoming clear for both corporate tax departments and tax firms is that 2026 represents a pivotal year — not because of arbitrary deadlines, but because the gap between traditional approaches and emerging practices is widening.
The corporate tax department: From compliance factory to strategic engine
For those in corporate tax departments, strategic work is increasingly becoming non-optional. Supply chain decisions, tariff implications, global compliance complexity — these are landing on the desks of in-house tax team members as core responsibilities rather than occasional advisory projects.
What’s emerging in leading tax departments? Three patterns: intelligence, automation, and agility.
The data challenge comes first — Many departments are discovering that before implementing AI strategies or automation roadmaps, they need to address their data infrastructure. Data often lives across multiple enterprise resource planning (ERP) systems, requires manual transfers between systems, and needs hours of reconciliation before it’s usable.
This foundational issue frequently determines whether technology implementations succeed or fail. Data dictates what’s possible with any technology, especially AI. For most organizations, it remains a vulnerability despite being a critical component of modern tax departments.
Supply chain decisions, tariff implications, global compliance complexity — these are landing on the desks of in-house tax team members as core responsibilities rather than occasional advisory projects.
Getting data centralized, automated, and accessible — and ideally aligned with the broader corporate finance department — may not make for exciting presentations to leadership, but it’s often the difference between technology that transforms a department and technology that creates additional work.
Technology decisions benefit from intentionality — AI is being marketed as a universal solution, but experienced professionals are finding it works best when applied to clearly defined problems. Before purchasing another platform or piloting another tool, successful tax departments are asking what they’re actually trying to accomplish with the technology. Which processes should be automated first? Does AI make sense for this particular challenge?
Productive conversations with organizations’ IT departments, understanding current technology stack capabilities, and mapping problems before seeking solutions — these approaches tend to matter more than the sophistication of the acquired tools themselves.
Certain skills are becoming increasingly valuable — You don’t necessarily need to become a data scientist, but technological and AI fluency is proving to be an essential skill. Think of it as learning another language — you need enough of a command of it to communicate effectively and understand what you’re looking at.
The ability to analyze data outputs, spot patterns, and tell the story of what the data means is separating strategic tax professionals from those who are focused primarily on compliance. Being able to communicate tax information to non-tax professionals and then translate complex implications into actionable business advice will position you and your department as a strategic partner rather than a cost center.
As the complexity of tax regulations continues to expand, both globally and locally, many in-house tax departments are finding they need to automate routine work and leverage technology not just for compliance, but to predict outcomes and advise the business strategically.
The tax firm: When compliance becomes commoditized
For tax and accounting firms, the current tech-driven shift is particularly urgent. Compliance work is becoming more and more commoditized, and technology can now complete basic compliance in seconds. Indeed, some financial institutions are offering it for free to attract clients.
Tax professionals still spend roughly 60% of their time on manual, repetitive work, but this model is under pressure. Regulatory authorities are using technology to demand information faster, and clients expect more. Further, competition is intensifying from private equity-backed firms, mergers, and tech-enabled competitors who can deliver compliance work at significantly lower costs.
Several factors that weren’t present before — such as PE investment, consolidation, technology democratization, and more — are creating unprecedented competitive pressure and fundamentally changing what distinguishes one tax firm from another.
Automation is becoming table stakes — Successful tax firms are systematizing and automating compliance work and developing customer relationship management (CRM) strategies for managing client data. This isn’t about eliminating jobs; rather, it’s about eliminating tasks. As mentioned, regulatory authorities are already demanding information faster using their own technology, and firms are finding they need to keep pace.
Several factors that weren’t present before — such as PE investment, consolidation, technology democratization, and more — are creating unprecedented competitive pressure and fundamentally changing what distinguishes one tax firm from another.
Specialization is creating differentiation, and as a result, the general tax, audit & accounting practice model is facing challenges. Clients increasingly need professionals who know their industry deeply, understand their specific challenges, and can provide insights beyond generic compliance work.
This often means making choices about where to develop deep expertise. Which industries will you focus on? What emerging areas would be best in which to position yourself? And the growing complexity and expansion of tax regulations actually creates opportunities for professionals who can think strategically about emerging fields.
Cryptocurrency is one example. Cross-border commerce, specific regulatory niches, particular industry verticals — these are areas in which specialization can create meaningful differentiation for a firm.
The advisor relationship looks different — Providing value in the tax profession is shifting away from form completion and to analyzing client data and providing deep, insightful guidance. This requires a different kind of client relationship — one that goes deeper into their operations, understands their business intimately, and positions yourself as a partner in decision-making rather than a vendor handling annual filings.
Again, you don’t need to know how to code but being able to analyze client data points and translate them into strategic insights is proving increasingly valuable.
The bottom line: 2026 is a pivotal year
The tax profession — on both the corporate and the outside firm sides — appears to be splitting. Some professionals are automating routine work, developing deep expertise, and positioning themselves as strategic advisors. Others are continuing with manual work and hoping that technology can increasingly make them better and faster.
For many, 2026 is about specialization and using technology to enable it. Yet, it’s also about reflection: If you’re no longer firm or in-house function is no longer primarily a compliance machine, what distinguishes them when compliance becomes commoditized?
Further, the complexity of tax regulations is expanding, and this complexity creates demand for expertise. The professionals and firms that can navigate that complexity, provide genuine insights, and communicate clearly may find themselves more valuable than ever.
This shift is already underway. Many professionals are asking themselves whether they’re positioning themselves for where the profession is heading and how they can best offer their strategic expertise to create value for their clients or organizations.
You can download a full copy of the 2025 State of Tax Professionals Report from the Thomson Reuters Institute here
