AI and Taxes: Will the IRS Use AI to Audit You? | Ed Lyon Q&A

Is the IRS using AI to audit taxpayers?
Will AI replace CPAs and financial professionals?

In this Q&A episode of The Lyon Share Podcast, Ed Lyon breaks down the real impact of artificial intelligence on taxes, audits, and the future of professional services.

After experimenting with tools like Claude and AI agents, Ed shares firsthand insights into how AI is transforming his business — and what that means for business owners, taxpayers, and advisors.

Inside this episode:

• How the IRS actually selects audit targets
• Whether AI will increase your chances of being audited
• Why most taxpayers shouldn’t worry (yet)
• The truth about AI replacing accountants
• How AI is making professionals more productive, not obsolete
• Why relationships and expertise still matter more than automation
• The rise of the “K-shaped economy” and what it means for your future

Ed also explains how AI is helping him automate complex processes, generate reports, and dramatically increase efficiency — without replacing the human element clients rely on.

If you're wondering how AI will affect your finances, your career, or your business, this is a must-listen.

• IRS audit selection process explained
• Discriminant Information Function (DIF)
• AI and tax enforcement
• Audit risk factors for business owners
• Schedule C vs S-Corp audit differences
• AI tools like Claude, ChatGPT, and others
• Automation in tax planning
• The future of accounting and advisory services
• K-shaped economy explained
• AI vs human expertise

• AI may improve IRS targeting, but staffing limits audits
• Most audits focus on unreported income, not deductions
• Business owners face higher audit risk than W-2 employees
• Switching to an S-Corp can significantly reduce audit exposure
• AI is a productivity tool, not a replacement for experts
• High-net-worth clients still want human advisors
• Relationships and experience will always outperform automation
• Professionals who ignore AI risk falling behind

“AI might find audit targets… but humans still have to run the audits.”

“Information is becoming a commodity — relationships are not.”

“You don’t need to know how AI works… you need to know how to use it.”

“The people who adopt AI will replace the ones who don’t.”

“High-net-worth clients don’t want robots — they want a person they trust.”

• Business owners
• Entrepreneurs
• CPAs and financial advisors
• Anyone concerned about IRS audits
• Professionals navigating AI disruption
• People looking to future-proof their careers

🧠 Topics Covered💡 Key Takeaways🔥 Memorable Quotes🎯 Who This Episode Is For