'I'm TaxGPT': Ottawa developer designs chatbot to help Canadians file their taxes for free

The service uses artificial intelligence to guide users through the process and answer questions

OTTAWA – “Hi there! I’m TaxGPT, a friendly AI tax advisor. I can help you learn more about taxes in Canada in 2023.”

Those are the first words of TaxGPT, a new (and free) artificial intelligence-powered chatbot launched by Ottawa software developer Paul Craig to help Canadians file their own taxes instead of turning to tax preparation software companies constantly trying to “upsell” their services.

“A lot of people have what is called simple tax situations. If you have a T4, investments, maybe an RRSP or something, then it’s really not complex to file. But a lot of people just feel low confidence,” Craig said in an interview.

The Ottawa developer and public servant says tax filing gets a bad rap for being impossibly complicated unless people pay for sometimes unnecessarily costly software to help them file otherwise straightforward tax returns.

Some tax filing software is part of the problem, he said, because they reel users in with a free version before trying to “upsell” them, often by reinforcing the idea that it is difficult or even risky to file taxes on your own.

“In some cases, they’ll say they have a free product, but if you want all the benefits you’re entitled to, you have to go one level up,” he explained. “The other thing they do is trying to upsell you to a person” that can advise you individually.

“People are afraid to make a mistake. They feel like taxes are really confusing. They feel like they can read some stuff about it, but if they do anything wrong, that is where the police are coming to their house in the middle of the night and shooting their dog,” he said with a laugh.

“I think some software filing products try to reinforce that low confidence, that you may be doing something wrong, that you might not be getting all your benefits, that there may be a problem you’re not aware of.”

TaxGPT.ca (not to be confused with an American tax preparation software with a similar name) is easy to find and easier to use. It won’t do your taxes for you, nor will it replace the advice of an accountant or the Canada Revenue Agency (CRA).

But Craig says it’s designed to help Canadians who are intimidated by the idea of doing their own taxes better understand their tax situation so they feel confident they fill out their own return at no cost if possible. It’s particularly aimed at vulnerable Canadians, such as low- or fixed-income taxpayers or first-time filers.

The website features a short explanation on the left side of the screen and the interactive “chatbot” on the right that looks very much like the average customer service chatbot that pops up on online stores.

Craig says he designed the “frame” of the website, then used a well known chatbot software called “Typebot” to create the interactive tool in which he integrated ChatGPT, the revolutionary AI language model software that is taking the world by storm.

TaxGPT has two main functions. The first is a chatbot that will guide users through the process of filing their taxes for free via a pre-programmed question-and-answer format that adapts to their specific tax situation and provides specific answers as the user responds.
 

For example, the first question a user will have to answer is how they normally file their taxes. Depending on their answer (“I’ve never filed before,” “I file my own taxes” or “someone else does them for me”), TaxGPT will ask follow-up questions aimed at helping them understand their tax situation and help them file to the CRA for free.

The second function is where the AI and ChatGPT function kicks in. Ask TaxGPT any question and it will string together the best answer possible based on information fed into it from a variety of sources, namely the CRA’s website.

There is a caveat though. Craig says people can trust his system, but it isn’t perfect and mistakes or missing caveats may slip into responses to more complex questions.
 

“I think TaxGPT is better than not having any resources available. It’s a low-friction way to casually learn about taxes that you can do from your home, and it give you ideas on next steps,” he said.

He also insists that his tool will never request, collect nor store a user’s personal data.

Craig, who is a public servant currently on a one year leave from the Canadian Digital Service, says he was inspired by a now-defunct pilot project he worked on in 2016 which would provide a “wizard-like tax filing experience” to low- or fixed-income Canadians.

“Rather than requiring tax-filers to enter their information, the service presents information that the CRA already has, then asks tax-filers to confirm the information is correct,” read the website for the “Claim tax benefits” service. The government pulled the plug on the project before its launch in 2018.

He also says he was inspired by work done by participants of the Community Volunteer Income Tax Program (CVITP), a network of volunteer-run and federally funded tax clinics aimed at helping people with modest incomes and a simple tax situation file their returns and claim their benefits.

“I was constantly watching people coming in who felt like, ‘This is a task that I could never do on my own, it’s too hard.’ They were left to their own devices. There’s a lot of, sort of, predatory business models out there” aimed at people afraid to file their taxes, Craig said.

The federal government is constantly looking for ways to encourage the estimated 12 per cent of Canadians who currently don’t file their taxes. Since most of them are low-income individuals, the government says they are likely missing out of a host of benefits, such as the Canada Child Benefit and the Guaranteed Income Supplement.

Craig says his work isn’t sponsored by anyone and that he is paying all expenses out-of-pocket. He estimates that it took about 40 to 50 hours to develop TaxGPT and it has cost him about $60 to date.

His goal is to both help boost Canadians’ confidence in their ability to file their own taxes all the while building up his professional portfolio and showcasing his developer skills.

But he does suggest one tax filing software to users if they’re interested: Wealthsimple Tax, because it is completely free and doesn’t try to upsell any necessary features because the company is instead trying to attract users toward its investment platform.

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