OpenAI and the tax automation firm Thrive have developed a self-improving artificial intelligence system for tax preparation that the companies say achieves 97% accuracy. The tool, which learns from its own errors without human retraining, could reshape how individuals and businesses handle filings.
How the system works
The AI combines OpenAI’s large language models with Thrive’s proprietary tax logic. It processes forms, deductions, and credits, then checks its work against known correct outcomes. When it spots a mistake, it adjusts its internal parameters on the fly — no engineer needs to rewrite code. That iterative learning loop is what pushes accuracy above typical automated tax software, which often hovers in the low 90s.
Why 97% matters
For context, a single percentage point error on a complex return can mean hundreds or thousands of dollars. The IRS audits roughly 0.4% of individual returns, but errors in self-prepared filings are far more common. A system that catches its own missteps before submission could cut down on amended returns, penalties, and audit triggers. Thrive’s existing client base includes mid-market firms that handle thousands of returns annually; even a small accuracy gain translates into real savings.
Self-improvement raises questions
The “self-improving” label means the model updates its behavior after every error it detects. That raises a question regulators haven’t fully answered: how does an AI that changes its own logic get stamped as compliant with tax law year over year? The IRS has not yet certified any AI system as a substitute for a paid preparer’s signature. OpenAI and Thrive have not said whether they plan to seek such certification or whether the tool will be sold directly to consumers or only through tax professionals.
Thrive’s engineers told the companies’ internal blog that the AI “does not replace a CPA’s judgment on gray-area tax positions” but handles the mechanical work. No further details on specific test datasets or error types were released.
What comes next
The partners are running a closed beta with selected Thrive clients. They have not announced a wider release date or pricing. Both declined to comment on whether the system would be submitted for IRS review before launch.
