Big Four firm Deloitte has created a new product, CognitiveTax Insight, or “CogTax,” to analyze indirect tax data sets using artificial intelligence.

The product uses AI to assess the full population,of a clients’ accounts payable transactions, compared to a traditional, sampled approach. The use of AI is proliferating in the accounting space, especially to leap-frog simply sampling data, as in audits, and go straight to processing entire data populations.

The new addition is part of Deloitte’s “Tax in 2020″ strategy, a three-year digital transformation plan for tax worldwide into which Deloitte is investing heavily.

“We are focused on making AI a reality in the tax reporting arena,” said Chuck Kosal, chief transformation officer at Deloitte Tax LLP. “News reports and articles are often focused on future breakthroughs using AI, but the reality is that Deloitte is deploying machine learning to support our clients today. This gets to the heart of our Tax in 2020 strategy — we are bringing the future to the present and our clients are benefiting now.”

Typically, data analysis for indirect tax recovery is done through statistical analysis and sample sets. Due to the sheer amount of data and complex jurisdictional rules, it can be impossible for companies to analyze all indirect tax transactions, which leads to money being left on the table. Being able to analyze every data point in seconds or minutes — a task simply not possible without technology — changes the landscape for indirect tax recovery.

Deloitte touts CogTax as also able help companies avoid overpaying their indirect tax liabilities. CogTax leverages optical character recognition, along with advanced machine learning algorithms and analytics, to effectively analyze a full population of data and documents to assist clients with indirect tax overpayment recovery and reduce the potential for future over or underpayments.

“We are finding that through the combination of larger and richer disparate data sets and the application of emerging cognitive technologies we can transform the way our clients approach their indirect tax over and underpayment analysis,” said Andy Gold, tax innovation partner in the multistate tax services practice of Deloitte Tax, in a statement.

“CogTax moves tax analysis from a manual, administrative process to an automated, machine-learning process that brings with it accuracy and scale previously not achievable,” added indirect tax principal Deval Reddy.

With new cognitive recovery and remediation solutions like CogTax, Deloitte Tax professionals can now help clients by:

• Identifying, recovering and remediating overpaid indirect taxes;
• Capturing key data points from thousands of invoices and documents within days or even hours, as opposed to weeks or months;
• Transforming indirect tax analysis, such as recovery, from a backward-looking assessment to a real-time analysis and remediation; and,
• Analyzing refund potential and exposure/liabilities.

“As part of our Tax in 2020 initiative, Deloitte is committed to developing innovative technologies that will support our clients as they evolve their tax departments for the future,” stated Deloitte Tax chairman and CEO Steve Kimble. “Through solutions such as CogTax, we are harnessing the power of OCR and machine learning to provide greater insights and increase efficiencies — effectively reducing the burden on clients and providing them with enhanced value.”