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May 21, 2024

H&R Block simplifies tax preparation with a powerful AI tax assistant, built using Azure AI

H&R Block wanted to give online tax filers a better experience. The trusted tax preparation company envisioned using generative AI to create an easy, seamless process that answers filers’ tax questions, maintains safeguards to ensure accuracy, and minimizes the time to file. Valuing Microsoft’s leadership in security and AI and the longstanding collaboration between the two companies, H&R Block selected Azure AI Foundry and Azure OpenAI Service to build a new solution on the H&R Block platform to provide real-time, reliable tax filing assistance. AI Tax Assist combines nearly 70 years of trusted tax expertise with the latest advancements in AI technology from Microsoft Azure OpenAI to streamline and simplify the tax preparation process for millions of H&R Block clients.

HR Block

The tax experts at H&R Block know that tax preparation is not on most people’s list of favorite activities. That’s why they created the tax preparation category almost 70 years ago and continually strive to make filing taxes less taxing for their millions of customers each year. To do that, they combine expert tax analysis from their world-class The Tax Institute with the expertise of their 60,000 tax professionals to assist Americans with preparing and filing their taxes and offer more ways to file than any other brand, including in-person at any one of H&R Block’s 12,000 locations worldwide—or online.

“People get worried at tax time about ‘getting it right,’ and we’re focused on helping them feel confident in the filing process,” says Aditya Thadani, Vice President of Artificial Intelligence Platforms at H&R Block. “We continually aim to improve filing efficiency, accuracy, compliance, and security to meet the needs and exceed the expectations of the people and businesses that choose us to file their tax returns.”

Almost half of the 150 million US tax filers prepare and file their own returns. H&R Block has focused on how to build customer confidence as they go through the process. “Increasingly, customers are wanting to do taxes on their own online,” says Jody Vanarsdale, Director of Product Management at H&R Block. “But some customers have concerns about not fully understanding what to include and how long it takes.”

Vanarsdale says some people leave tax applications while filing to look up other forms or do research. Sometimes, they return to the online tax application; sometimes, they don’t. “There’s this fear of ‘Did I get all of my tax information entered correctly, did I get all my tax deductions, did I get the best outcome?’”

“We wanted to give online tax filers a better experience,” adds Vin Kamat, Principal Architect at H&R Block. “We had a vision of using generative AI to create an easy, seamless process where tax questions are answered as you work, safeguards are in place to ensure accuracy, and the time to file is significantly reduced.”

Trained on tax code and anonymized tax returns

Valuing Microsoft leadership in security, compliance, responsible AI, and generative AI, H&R Block began collaborating with the company, using Azure AI Foundry and Azure OpenAI Service to build a new solution on the H&R Block platform. “We owe it to our clients to handle all their information responsibly. Microsoft has shown a lot of leadership in establishing those principles of responsible AI, maintaining clients’ trust, maintaining privacy, and ensuring that any capabilities we deliver are consistent with our promise of expertise,” says Thadani.

Adds Kamat, “We had past success using Azure AI Document Intelligence on an earlier online tax preparation solution. We wanted to continue our Azure AI journey with a new, more dynamic and engaged tax filing experience—and we knew we could trust Microsoft to give us the support we needed.”

Thadani says that everything his team is building now is in Microsoft Azure cloud-native services and developed in .NET on the H&R Block platform. For the new generative AI solution, his team worked with Azure AI Foundry, Azure OpenAI Service, Azure AI Document Intelligence, Azure AI Content Safety, Azure Cosmos DB, and Azure App Service extensively. “We heavily rely on Azure services for content filtering and hardening of our environment,” explains Thadani. “Our efforts resulted in AI Tax Assist, a generative AI experience that streamlines online tax filing by enabling clients to ask questions during the workflow.”

AI Tax Assist addresses individuals’ questions as they prepare and file their taxes and can answer tax theory questions or offer navigation instructions when needed. It can provide answers on tax forms, deductions, and credits to help customers maximize potential refunds and minimize tax liability. AI Tax Assist also answers free-form, tax-related questions, providing dynamic responses that clarify tax terms and give guidance on specific tax rules or general information about the United States federal and state tax systems, along with questions about the tax code, recently changed laws, and tax policies.

“We worked with Microsoft to build AI Tax Assist to provide a copilot experience, using Azure OpenAI Service and Azure AI Foundry, ” adds Vanarsdale. “With a strong emphasis on compliance with tax laws, H&R Block AI Tax Assist leverages data from H&R Block’s world-class The Tax Institute to answer questions regarding current US and state tax laws.” In addition, H&R Block used thousands of machine learning models trained with AI algorithms and technology, such as optical character recognition, to create a more robust real-time filing experience for customers.

“The development process was very efficient,” says Thadani. “With Azure AI services, our developers can code faster, so they had time to ‘experiment’ to fine-tune features like enabling individuals to ask as many questions as needed conversationally and the ability to revisit previous conversation threads. It’s an approach we’re continuing—to push innovation and deliver the best experiences.” Thadani adds that if live help is needed along the way, H&R Block’s tax professionals are available to assist at no additional charge.

Simple, fast, cost-effective

Released in early December 2023, AI Tax Assist is available 24/7 at no additional cost in the DIY Deluxe, Premium, and Self-Employed online editions and is backed by H&R Block’s 100% accuracy and maximum refund guarantees. “Since launching the AI Tax Assist experience, we’ve received positive customer feedback and seen increased usage throughout the 2024 tax season,” says Vanarsdale. “We’ve been most pleased to see customers complete the entire filing process quickly and without leaving the app.”

For H&R Block, this demonstrates that customers feel comfortable with AI Tax Assist. “We’re glad the trust we’ve grown with customers is now transcending into our new era of AI,” adds Vanarsdale. “We expect customer adoption to continue to grow.”

Customer feedback reflects this confidence, praising the application for offering a simplified tax filing process, a user-friendly interface, highly accessible customer support, and the trust instilled by H&R Block’s reputable brand. “Every year, millions of Americans turn to H&R Block for the unique expertise, help, and financial confidence we provide,” says Thadani. “With Azure and generative AI, we’re addressing core customer needs while up-leveling the entire filing experience.” He adds that with more customers opting to use AI Tax Assist, H&R Block live agents have had more time to help clients handle more complex returns.

Kamat says the team is excited for what’s next. “Our next step is to develop natural, more human-like interactions between AI Tax Assist and customers. Working with Microsoft allows us to innovate faster and cost-effectively in the process,” says Kamat.

Adds Thadani, “With Azure OpenAI Service, we are able to drive groundbreaking customer experiences that simplify the tax filing process while also instilling confidence and promoting customer trust. This is just the beginning and has the potential to impact the entire industry.”

Find out more about H&R Block and The Tax Institute on X, Facebook, and LinkedIn.

“With Azure OpenAI Service, we are able to drive groundbreaking customer experiences that simplify the tax filing process while also instilling confidence and promoting customer trust.”

Aditya Thadani, Vice President of Artificial Intelligence Platforms, H&R Block

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