TaxStatus introduces AI-generated planning recommendations with Advice.ai integration

Up until quite recently, many advisors were averse to doing extensive tax planning for their clients. This had to do in large part with advisory firms shielding themselves from the potential liability exposure that it gave them for their advisors to be (intentionally or unintentionally) giving tax advice – with few required operational safeguards in place for advisory firms to supervise their employees in tax matters, and often a lack of Errors & Omissions (E&O) insurance coverage to indemnify the firm if it were held liable for an advisor's recommendation that resulted in additional taxes and penalties for the client, many firms simply forbade their advisors from giving any tax-related advice whatsoever. But even for advisors who could decide whether or not to do tax planning, part of the challenge was that doing so requires knowledge about the context of the client's current tax situation – which in turn typically required digging through the client's historical tax returns for information on their income, deductions, and other tax information on which to base the analysis.

This all changed with the emergence of Holistiplan in the late 2010s, which allowed advisors to greatly expediate the process of tax planning and review by scanning the client's tax return and automatically generating a report on the client's tax situation, while also using the current numbers as the baseline for short- and medium-term tax planning projections. Advisors raced to adopt tax planning in the ensuing years, and with few competitors to Holistiplan in the early days, it grew to dominate the market for tax planning software.

In the early 2020s, a newer player called TaxStatus emerged as a complement – and potential competitor – to Holistiplan. Its key feature was that, rather than requiring the advisor to obtain and scan a PDF of their client's tax return, TaxStatus built a direct integration to the IRS – allowing the software to pull in multiple years' worth of tax data following a simple authorization process. At first, TaxStatus seemed like it might find a niche supplying IRS tax data to other technology providers, and for several years had an integration with Holistiplan to pull in tax data without the need to scan a tax return. But eventually the Holistiplan-TaxStatus integration ended, and TaxStatus seemed more intent on building out its own tax planning tools and reports and competing directly with Holistiplan itself. But in large part, the features that TaxStatus developed were more geared towards backward-looking tax history and monitoring the client's current situation – e.g., generating a list of the client's current accounts based on their form 1099 history and sending alerts in the event of audits or tax due notices. Which made sense on one level given that the tax data that TaxStatus pulls in is itself backwards-looking – but in practice, most financial advisors would rather focus on forward-looking tax planning rather than backwards-looking tax history in their client conversations, which left TaxStatus at a disadvantage to Holistiplan (as well as other competitors that emerged like FP Alpha, Hive Tax AI, and more recently others like Wealth.com's and Hazel's respective tax planning tools).

But now it seems as though TaxStatus has finally joined the tax planning fray with the recent announcement of TaxStatus's new partnership with Advice.ai. Under the new partnership, Advice.ai will supply a 'library' of preset tax strategies – ranging from business deductions to charitable contributions to estate planning – and evaluate the client's eligibility and compatibility for each strategy and calculate an estimate of the tax savings from implementing them, resulting in a ranked list of strategies as a starting point for discussion. And unlike the prior Holistiplan integration, the new Advice.ai feature is embedded within TaxStatus itself, not the external Advice.ai platform.

What's also notable, though, is that TaxStatus's CEO, Kevin Knull, also happens to be the co-founder of Advice.ai. Knull, who also served as president of MoneyGuide prior to its acquisition by Envestnet, was reportedly responsible for TaxStatus pivoting its focus from being 'just' a conduit for IRS data to flow into external tools like Holistiplan to being a tax planning tool in its own right. So it's interesting that, rather than build that functionality internally, TaxStatus instead partnered with a third party provider – founded by its own CEO – and licensed that provider's planning capabilities to run within TaxStatus's platform. For its part, Advice.ai appears to be setting its focus on tax and estate planning for UHNW clients, so it's possible that the two platforms will end up serving different clientele, e.g., more mass-affluent and 'regular' HNW for TaxStatus, and UHNW for Advice.ai, to avoid competing directly with one another.

The bottom line, though, is that after years of wondering when TaxStatus will pivot to a full-fledged planning tool, that time now seems to have arrived. The caveat is that while there were few competitors to Holistiplan in that space even just one year ago, the last 12 months have seen a flurry of new AI-powered tax planning tools that make it a much more crowded category to get a foothold in. Still, TaxStatus's direct electronic feed to verified IRS data is a legitimate differentiator between it and the other tax planning tools on the market. But the question will be whether the partnership with Advice.ai can help TaxStatus effectively turn pure tax data into better planning conversation.

This article first appeared on the Nerd’s Eye View at Kitces.com at https://kitc.es/advisortech-june2026, and has been reprinted here with permission.

Ben Henry-Moreland 

Ben Henry-Moreland is a Senior Financial Planning Nerd at Kitces.com, where he specializes in writing and speaking on financial planning topics including tax, practice management, and technology. He also co-authors the monthly Kitces #AdvisorTech column. Drawing from his experience as a financial planner and a solo advisory firm owner, Ben is passionate about fulfilling the site’s mission of making financial advicers better and more successful.

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Michael Kitces

Michael Kitces is Head of Planning Strategy at Focus Partners Wealth, which provides an evidence-based approach to private wealth management for near- and current retirees, and Focus Partners Advisor Solutions, a turnkey wealth management services provider supporting thousands of independent financial advisors through the scaling phase of growth.

In addition, he is a co-founder of the XY Planning Network, AdvicePay, fpPathfinder, and New Planner Recruiting, the former Practitioner Editor of the Journal of Financial Planning, the host of the Financial Advisor Success podcast, and the publisher of the popular financial planning industry blog Nerd’s Eye View through his website Kitces.com, dedicated to advancing knowledge in financial planning. In 2010, Michael was recognized with one of the FPA’s “Heart of Financial Planning” awards for his dedication and work in advancing the profession.

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