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Accounting AI agent · Tax provision

Tax-Provision AI Agent (ASC 740 · Current, Deferred & Rate Reconciliation)

Compute current and deferred tax from the trial balance and tax basis, roll the deferred inventory, build the rate reconciliation and disclosure inputs, with every position and judgement accepted by the named tax director.

Typical delivery
4–6 weeks
Deployment
Your stack
Director review
Pre-conclusion
After launch
Agent Care

What this agent does

Computes the provision, never the position it takes

In

  1. 01

    Current tax is built from the trial balance, the tax basis and each entity's configured elections.

  2. 02

    Deferreds move through a maintained inventory tracked to reversal, and Pillar Two runs separately.

Reason

  1. 03

    The rate reconciliation is assembled by disclosure category, with taxes paid tracked by jurisdiction alongside it.

  2. 04

    Apportionment, elections and jurisdiction rules apply as configured, never chosen position by position.

  3. 05

    Every computed line is bound to the trial-balance or tax-basis value behind it, and gaps are marked.

Decide

  1. 06

    Positions are screened against the recognition threshold, and only a position that clears it moves to measurement.

  2. 07

    Valuation-allowance evidence, positive and negative, is assembled for the tax director's weighing.

Out

  1. 08

    Every position and every allowance judgement routes to the named tax director for acceptance.

  2. 09

    Execute write actions only inside the approval boundaries agreed during implementation.

Product statement

The agent computes the provision and assembles the disclosure inputs; the tax director concludes on every position and allowance, and stays the signer of record.

Example workflow

One provision, computation to conclusion

  1. 1Trial balance receivedGeneral ledger trial balance, tax-basis schedule or prior-period workpaper
  2. 2Deferred inventory rolled forwardTemporary differences, elections and prior positions, each tied to the entity and jurisdiction they came from
  3. 3Provision computedCurrent tax, deferred tax, rate reconciliation, flagged positions and confidence
  4. 4Controls appliedRecognition-threshold checks, allowance-evidence checks, jurisdiction rules and confidence threshold

No human action required

Stages 1 to 4 run unaided, and nothing is booked at any of them — the agent is computing, and the tax director's lane opens at the confidence gate.

5DecisionBranches at the confidence threshold
High confidence

Goes to the tax director to review.

Low confidence

Adds a technical-tax read first.

Director review

The provision is held with its computation, its flagged positions and the confidence.

Approve · Edit · Send to technical review

Approved — ready to book

  1. 6Provision system updatedOnly where write access and approval policy allow it
  2. 7Outcome evaluatedComputation accuracy, director edits, allowance outcomes and post-close corrections

Edits

Every director edit is counted in the evaluation.

What should not run autonomously

Human approval stays in control

Outside the boundary — human approval required

8 items

  • Concluding an uncertain tax position.
    • Setting or releasing a valuation allowance.
    • Booking a tax entry in the ledger.
    • Signing the tax footnote.

  • Automation boundary

    Agent acts unaided

    • ✓Compute current and deferred tax from the trial balance and the tax basis.
    • ✓Apply the entity's configured elections, apportionment.
    • ✓Bind each computed line to the trial-balance or tax-basis value it came from.
    • ✓Flag positions, allowance judgements and discrete.

    Any computed line runs inside the boundaries agreed at implementation, never ahead of the tax director's review.

    • Determining an interim discrete item.
    • Characterising a difference as permanent or temporary.
    • Approving a return-to-provision true-up.
  • Changes to computation rules or automation thresholds.

Example output

One position in the provision, annotated

Everything the agent computes is attached to the basis it came from.

Provision output · single position

Illustrative example
Position
State research-credit position
Computed line
Recognition threshold cleared on technical merits — measurement not yet run
Amount
$1,150,000
Source of record
State credit study on file
Confidence
88%
Tax director of record
Tax director name and title

As received

Taken from the trial balance and the credit study on file — nothing on this side is a conclusion the agent reached.

Evidence used

  • State credit study on file
  • Prior-period workpapers
  • Trial-balance tie-out

Why this line

The technical-merits test is met in the record provided; whether the benefit is realized.

What the score decides

Below the configured threshold the position picks up a technical-tax read before it.

Action

ApproveEditSend to technical review

Value

Where AI adds value

The same four claims, placed at the point in the workflow where each one applies.

Where the value lands

Value 01 – 04

Every position

From the trial balance

03Computation

Compute from the basis

Draw on the trial balance, the tax basis and the entity's configured elections.

01Approved path

Recognition comes before

Routine current and deferred computations arrive already built, tied to the basis.

02Human review

Send review to the open positions

Uncertain positions and low-confidence allowance judgements are marked, so the tax director's read starts where risk concentrates.

04

Build an evidence trail

The position, the authority it was weighed against and the tax director who accepted it stay on the provision.

Integrations

Typical integrations

Five system groups connect to the same agent. Which of them are in scope is decided in discovery.

  • ERP and general ledger

    • SAP
    • Oracle
    • NetSuite
    • Workday
    • Dynamics 365

  • Tax-provision software

    • Corptax
    • ONESOURCE
    • Longview Tax
    • TaxStream

  • Workpaper & basis tools

    • Basis workpapers
    • roll-forwards
    • Fixed-asset and depreciation systems

Agent

Tax-provision computation

  • Reads the basis
  • Computes the provision
  • Holds for review

  • Disclosure and reporting

    • XBRL and disclosure tools
    • Audit and review systems

  • Observability & evaluation

    • OpenTelemetry
    • Langfuse
    • Supported monitoring/evaluation sources

Integration availability depends on the client's existing systems and API access.

Agent controls

Six layers between the model and the filed provision

Each control encloses the one beneath. What none of them catches is named in the map below.

L6 · Outermost — last line of defence

Inward → L1 · closest to the model

L6Rollback / safe modeNarrow the agent to schedule assembly when evaluation or production signals degrade.Roll back
L5Version monitoringTrack model, prompt, computation-rule and configuration changes.Track
L4Provision trailRecord the trial balance, the computation, the flagged positions and the director's disposition.Record
L3Director reviewHold the provision for the named tax director; it governs release, not whether a position is right.Gate
L2Policy guardrailsTest computations against recognition-threshold and jurisdiction rules; a failure holds the item.Restrict
L1Confidence thresholdsRoute low-confidence computations to a technical-tax read before the director sees them.Require review
Model coreProvision computed — current, deferred, rate reconciliation, flagged positions and confidence
L1 – L2
Test whether a line may stand
L3
Puts the conclusion in the tax director's hands
L4 – L5
Keep the position and the authority behind it
L6
Drops to schedule assembly when signals degrade

How Nestack evaluates it

Evaluate the full provision workflow — not only the filed rate.

Coverage runs the whole depth of the workflow, and every layer is cut by slice.

Surface — the rate the filing shows

  1. E1Final-output evaluationDid every computed line match its trial-balance or tax-basis source?
  2. E2Step-level evaluationDid the agent use the right basis, elections and jurisdiction rules?
  3. E3Tool evaluationDid it read and write the correct entity, period and jurisdiction?
  4. E4Confidence calibrationDo low-confidence computations actually attract more director edits?
  5. E5Slice evaluationHow does performance change across specific entity or position types?
  6. E6Business outcomeHow many lines needed a director edit or a correction after close?

Floor — the outcome the tax director answers for

Failure modes

Where each failure originates in the agent

Seven failure modes, placed at the stage each one originates.

Agent lifecycle

Direction of processing →

  1. 01 · Retrieval

    1 mode

    • TX-03

      Superseded basis snapshot

      Temporary differences are computed from a trial balance the client later restated.

    Stage gathers

    Trial balance, tax basis, prior positions and entity elections

  2. 02 · Reasoning

    2 modes

    • TX-04

      Recognition-measurement collapse

      A probability-weighted benefit is booked before the recognition threshold is cleared.

    • TX-06

      Discrete item folded into rate

      A one-time item is blended into the estimated annual rate instead of its own interim period.

    Stage proposes

    Current tax, deferred tax and confidence

  3. 03 · Tool / write

    2 modes

    • TX-02

      Valuation allowance auto-set

      An allowance is set or released from a loss trigger alone, with no positive evidence weighed.

    • TX-05

      True-up posted without review

      A large return-to-provision true-up posts automatically without a root-cause read.

    Stage writes

    Only where write access and approval policy allow it

  4. 04 · Output

    1 mode

    • TX-01

      Disaggregation threshold missed

      A required rate-reconciliation category or disaggregation threshold is missed before review.

    Stage returns

    The provision the tax director reviews and accepts

  5. 05 · Change / Version

    1 mode

    • TX-07

      Stale rate assumption

      An enacted rate or law change is not reflected before the next computation runs.

    Stage tracks

    Model, prompt, computation rules and jurisdiction config

  • Sev-1 · books outside the boundary
  • Sev-2 · unsupported position reaches the provision
  • Sev-3 · source degrades, computation goes to review
See the complete Accounting failure-mode catalogue

Affected slices

A group rate can hide a single entity's risk

A group-level effective rate can look stable while a handful of entities or jurisdictions carry most of the adjustment risk. Nestack reports the provision-adjustment rate by slice, not only in total.

Slice performance — reported separately, not only in aggregate

Illustrative example
SliceFailure rateLiftLift vs. thresholdStatus
Entities with valuation-allowance history7.3%3.8×Review
Uncertain positions carried forward5.5%2.9×Review
Interim periods with discrete items3.4%1.8×Watch
Single-jurisdiction profitable entities1.9%0.7×Normal

Bar: provision-adjustment rate lift vs. the single-jurisdiction baseline · scale 0–4.0× · tick at 2.0×

2 of 4 slices over threshold

Evidence-linked improvement

The loop closes on the next computation, not an explanation

A cycle closes when the misstatement is a regression case the next release must pass. That suite is what the next provision computed is measured against.

Improvement cycle · five stages

Switchback — the path turns at Improve and returns at Learn

  1. 01

    Detect

    Provision-adjustment rate rises in an entity or jurisdiction slice.

  2. 02

    Diagnose

    The interim rate that held until it didn't is traced back through the trial balance, the basis and the elections behind it, until the cause narrows to one.

  3. 03

    Improve

    The fix is versioned, with the provisions that motivated it attached.

  4. 04

    Verify

    Nothing releases until the affected computation cases pass again.

  5. 05

    Learn

    The case is kept permanently, and the position memo changes with it.

  6. Learn → Detect

    The return edge. The next provision computed is checked against a suite one case longer.

Typical build scope

Twelve workstreams across six weeks

The build scope read against the delivery timeline. Week structure follows the six-week plan — discovery, basis, provision workflow, evaluation, integration, then production validation and handover.

Workstream

Week 1Week 2Week 3Week 4Week 5Week 6

  1. 01Provision workflow discovery and boundary definition.Week 1
  2. 02ERP and tax-provision source assessment.Week 1, Week 2
  3. 03Election and jurisdiction-rule mapping and rule mapping.Week 1, Week 2
  4. 04Trial-balance ingestion and normalisation.Week 2
  5. 05Rollforward logic and basis binding.Week 2, Week 3
  6. 06Confidence scoring and flag routing.Week 3
  7. 07Director review workflow.Week 3, Week 4
  8. 08Provision-system integration.Week 5
  9. 09Recognition and measurement cases.Week 4, Week 5
  10. 10Guardrails and acceptance controls.Week 4
  11. 11Provision-trail instrumentation.Week 5, Week 6
  12. 12Deployment, documentation and Agent Care handover.Week 6

12 workstreams · 6 weeks · bar shows the weeks a workstream is active — several run in parallel

Final scope and sequence confirmed in discovery

Engagement tiers

What each tier includes

Rows are the capabilities named in each tier's scope. Higher tiers include everything below them.

Capability✓ in scope · — not at this tierPilotOne entity, one systemProductionProduction provision-system integrationAdvancedMultiple entities / jurisdictions
Introduced at Pilot
Computing to your basis and rules✓✓✓
Director review✓✓✓
Computation-accuracy baseline✓✓✓
Introduced at Production
Reporting by jurisdiction—✓✓
Review workflow in your systems—✓✓
Approved write-back—✓✓
Provision-system integration—✓✓
Introduced at Advanced
Multi-entity provision rules——✓
Multi-stage director approvals——✓
High entity volume——✓
Multi-entity provision controls——✓
Build priceFrom $5,000From $8,000Custom quote
Final build price
Confirmed after discovery based on integrations, workflow complexity, entity volume, review controls and deployment requirements.
Separate from build
Build pricing is separate from recurring Agent Care, which covers managed monitoring, evaluations, incidents and verified improvements after launch.

What we need from you

What you bring, and what we build with it

Each input maps to a piece of build scope and a week in the delivery timeline.

  1. 01Your trial balance and tax-basis structure

    Trial-balance ingestion and basis mapping

    Week 1

  2. 02Representative prior-period provisions

    Computation baseline, rollforward and basis binding

    Week 2

  3. 03Your entity elections and valuation-allowance policies

    Election, apportionment and boundary-definition mapping

    Week 1

  4. 04Access to relevant APIs, feeds or exports

    ERP and tax-provision source assessment, then integration setup

    Week 2

  5. 05Positions you would not want booked

    Valuation-allowance cases and failure-mode testing

    Week 4

  6. 06What no provision may conclude alone

    Confidence scoring, flag routing, guardrails and acceptance controls

    Week 3

  7. 07Named tax directors to review positions

    Director review workflow, then pilot and production validation

    Weeks 5–6

Nothing else is required

Deployment, documentation and Agent Care handover are ours.

Delivery timeline

Four phases across six weeks

Phases cover the weeks the work truly takes, which is why the fifth carries evaluation and pilot.

Phase

W1

W2

W3

W4

W5

W6

  1. DiscoveryW1
  2. BuildW2 – W3
  3. EvaluateW4 – W5
  4. Pilot & LaunchW5 – W6

Week focus

W1Provision workflow discovery, election mapping and the boundary

W2Source integration and the computation baseline

W3Computation workflow, confidence logic and acceptance controls

W4Evaluation suite, guardrails and failure-mode testing

W5Provision-system integration, pilot entities and targeted corrections

W6One reporting cycle computed under the tax director, then Agent Care handover

Reading the band
A band covers the weeks its work is named in, and nothing else. The week 5 overlap is real, not padding.
At the end of W6
Validation closes on a live provision and Agent Care picks up monitoring.
Duration
Six-week plan shown · typical delivery 4–6 weeks depending on scope confirmed in discovery.

Next step · Accounting AI agent

Build a tax-provision agent around your company's review chain.

Show us your trial balance, your tax-basis workpapers and who reviews the provision today. Your tax director keeps every position and every judgement, and if your external auditor would also touch this tool, that boundary is set before deployment.

Typical delivery
4–6 weeks
Deployment
Your ERP and provision stack
Director review
Pre-conclusion
After launch
Agent Care available

Nestack Agents · Tax-provision computation

AGT-ACC-20 · Agent Care available after launch

Build a tax-provision agent

Four questions so the call starts from your actual setup — then pick a time that suits you.

About you
Your provision

No obligation. We’ll map the workflow, name the automation boundary and tell you if an agent is the wrong answer.