Avalara launches Avi AI agents for secure automated tax compliance

Avalara has introduced Avi and a network of AI agents designed to automate and manage tax and compliance tasks with human oversight and enterprise security.

Avalara's new platform positions Avi as the lead AI agent, coordinating specialised agents that carry out core compliance functions such as tax determination, return filing, exemption certificate validation, registration, property tax, reporting, and research. According to Avalara, the system gives enterprises the means to automate these functions while retaining final say and transparency over essential decisions.

"Avalara's increasing agentic capabilities bring intelligence and autonomy to the next level, without compromising control or security," said Scott McFarlane, CEO and Co-Founder of Avalara. "Our customers have trusted us to protect their data and compliance processes for decades, and Avalara's new AI agents operate within that same secure and auditable framework."

The platform-referred to as Agentic Tax and Compliance-integrates checkpoints for human review and approval at every stage. Avalara stresses that this approach ensures automation does not equate to diminished oversight. This design is intended to guarantee audit-ready visibility and control for enterprises overseeing tax filings, registrations, and other compliance-related activities.

Security measures

Every AI agent operates within Avalara's existing security perimeter, utilising authentication, encryption, and data governance measures already established across its product suite. This is intended to safeguard confidential enterprise information and to meet compliance standards required by global organisations.

Functions and agent network

Avi serves as the orchestrator, delegating and coordinating tasks among the network of AI agents. Each agent is assigned specific domains:

• Tax agents securely ingest transaction data, identify jurisdictions, apply rules, validate exemptions, compute tax rates, and generate tax returns, filing once authorised.
• Exemption agents scan and cross-verify customer exemption certificates with authoritative registries to maintain accurate records.
• Cross-border agents classify products, identify Harmonised System (HS) or tariff codes, and check trade restriction lists to ensure compliance with global trade rules.
• Registration agents prepare and file registration documents with relevant authorities, tracking the process through to storage of the signed documentation.
• Property tax agents gather and classify fixed asset data for location and depreciation and manage the filing of property tax returns.
• Reporting agents produce reconciled and auditor-ready reports with traceability back to individual transactions, giving finance teams improved insight and audit preparation.
• Research agents scan and summarise primary tax sources-laws, rates, and regulatory updates-with citations linked to official guidance.
• E-invoicing agents ensure global compliance for real-time tax mandates, connecting invoices directly to government portals for validation.
• Notice management agents automate receipt, classification, routing, and tracking of tax authority notices across jurisdictions.

These agents operate under supervision and are expected to scale from specific tasks to enterprise-wide operations, with Avi providing oversight and summarising agent activities.

Agentic workflow

The described workflow begins with data ingestion, validation, and application of local tax rules. AI agents then generate returns and present them for human inspection, editing, and approval. Once approved, filing proceeds automatically, with every step tracked and logged for audit purposes. Nothing is submitted without explicit human consent.

Avi can be deployed through multiple interfaces, including browser agents for ERP setup, integration with Microsoft Outlook for digitising invoices, and purpose-built connectors for platforms such as NetSuite and Google Gemini Enterprise. Open integration protocols let organisations connect third-party AI systems to Avalara's AI agents, facilitating collaborative automation initiatives.

ALFA platform

The platform is powered by ALFA, Avalara's LLM Framework for Agentic Applications. ALFA blends large language models from providers such as Amazon, Anthropic, Google, Meta, Microsoft, and OpenAI, as well as Avalara's proprietary models fine-tuned on extensive compliance data. The system is designed to ensure data separation, prompt security, and adherence to industry reliability standards.

Key platform features include autonomous execution with governance, integration across ERP and e-invoicing systems, access to human-verified tax rules for 195 countries, and verifiable audit trails. Avalara cites deployment across multi-cloud environments with real-time redundancy and compliance with recognised certifications such as SOC 2 and ISO 27001.

Rollout of Avi and the AI agent network is scheduled to begin globally in the final quarter of 2025 and early access programmes are already underway with select enterprise partners.