UpTrajectory Review

CPA Practice Advisor reports that agentic AI has reached tax preparation, and the timing matters for small firms. The source text is brief, but the claim is precise: these systems now gather client documents, organize data, draft returns, and flag gaps before a human reviewer opens the file. Agentic differs from the generative tools most firms have tested. Generative software responds to a prompt; agentic software pursues a goal across multiple steps, selects tools, and acts with limited supervision. That distinction changes the role of software inside a practice. The tool stops being a faster typewriter and becomes a junior preparer that works while you sleep.

For a small firm, the economics are direct and worth measuring. Tax season capacity has always capped revenue, and hiring skilled preparers late in the cycle rarely works. Agentic preparation compresses the document-handling and drafting phases, which frees senior staff to review, advise, and accept clients they once declined. A two-person shop can behave like a five-person shop during peak weeks without carrying permanent payroll through the off-season. The gain is not automatic, though. Firms that adopt the tool without redesigning workflow often discover the bottleneck simply moves downstream, and the savings evaporate into confusion.

The risk profile deserves more attention than the marketing suggests. An agent that misclassifies income across a hundred returns moves faster than a human who makes the same mistake once, and the review burden does not vanish. It concentrates at the final stage, where errors cost the most to correct. Liability stays with the firm and the signing professional regardless of what the software vendor promises. The IRS holds the preparer responsible for every position on a filed return, so a firm that loosens review controls to chase labor savings trades payroll for audit exposure. Staff must also learn to supervise a system that sounds confident when it is wrong.

A second-order squeeze will hit smaller practices from two directions. Larger competitors will adopt the same tools, cut prices, and shorten turnaround, which pressures fees across the local market. Clients will begin to expect faster completion and real-time status updates as standard service rather than premium perks. Firms that delay adoption may find themselves defending slower delivery at unchanged prices. The countermove is not to buy the tool and hope, but to reprice advisory work, tighten client communication, and use the recovered hours to sell judgment rather than keystrokes.

Before any pilot, ask vendors for accuracy data on returns like yours, not averages across all firm sizes. Clarify whether pricing runs per-return or per-seat, and whether the vendor carries professional liability coverage that extends to agent errors. Map your review workflow first and assign a senior person to every agent-drafted file, because the tool earns trust through supervised output, not promises. The firms that benefit will treat agentic AI as a capable junior hire: productive, fast, and never left alone with a client.

Watch how the major tax software platforms integrate agentic features into existing suites, because bundled pricing could undercut standalone vendors and reshape the market within two filing seasons. Also track IRS guidance on AI-assisted preparation, since disclosure requirements could arrive before firms finish their pilots. The window to build supervised workflows is open now, and it will not stay open indefinitely.

“Agentic tax preparation helps firms reduce repetitive preparation work, increase capacity, and give tax professionals a stronger starting point for review.” — CPA Practice Advisor

Takeaway: Pilot agentic tax prep only after you assign a senior reviewer to every agent-drafted file, because liability stays with your firm.