<\/p>\n
Artificial intelligence may have played a role in researching deductions, assessing tax strategies, or preparing returns this filing season. <\/p>\n
Yet taxpayers may have no way of knowing, as current federal rules do not require practitioners to disclose when AI tools are used in the process.<\/p>\n
In June 2026, the IRS issued its first formal guidance on AI for tax professionals, mapping six existing Circular 230 duties to the technology.<\/p>\n
Those provisions cover due diligence when reviewing AI output, technological competence, fee transparency, written advice standards, client data confidentiality, and firm-level supervisory procedures.<\/p>\n
One topic was entirely absent from the guidance, and it most directly affects a taxpayer. The agency did not address whether tax professionals are required to inform clients when AI plays a role in preparing their returns.<\/p>\n
That omission has grown harder to ignore as AI adoption among tax professionals has nearly doubled over the past 12 months.<\/p>\n
IRS Circular 230 alert left the AI disclosure question unanswered<\/p>\n
OPR Alert 2026-19, released on June 24, was the first time the IRS Office of Professional Responsibility formally addressed AI in tax practice.\u00a0<\/p>\n
The alert outlined how practitioners must verify AI-generated output, protect client data, and adjust their billing practices to reflect efficiency gains.<\/p>\n
The alert reinforced one principle above all: AI is a tool, and the practitioner who signs a return remains fully responsible for the finished product. <\/p>\n
What it did not resolve is whether clients deserve to know that AI participated in that work before the return was filed.<\/p>\n
Joshua Youngblood, an IRS-enrolled agent and founder of The Youngblood Group in Dallas, argued in a report from CNBC that the same standard should apply to AI, given that current rules already require signed consent before a preparer can share a return with an advisor.<\/p>\n
“If you have to have a disclosure to send a tax return to, say, a financial advisor that your client has been with for 20 years, wouldn’t you think it’s appropriate to do that if you’re going to send [their information] to an AI tool that’s going to prepare the return?” Youngblood said.<\/p>\n
AI adoption among tax practitioners doubled in a single year<\/p>\n
The disclosure gap would have less weight if AI use among preparers were still limited, but the numbers suggest otherwise.\u00a0<\/p>\n
A June 2026 AI Tax research solution outlook survey of more than 1,000 tax professionals from Blue J and CPA.com found that adoption has nearly doubled in one year.<\/p>\n
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AI-powered tax research has reached 60% of respondents on at least a weekly basis, nearly double the 33% from 2025, the AI Tax research solution outlook survey reported.<\/p>\n
The technology has also expanded well beyond basic research and into areas that directly form the advice and strategies clients receive.<\/p>\n
How tax professionals are using AI in 202644% of respondents now use AI for advisory projects, work that in accounting practice typically covers client-specific guidance and forward-looking planning.40% apply the technology to tax planning work, including strategies that affect how much a client owes at filing time.39% rely on it for compliance research, and 36% use it for document analysis across their daily workflows, the survey found.
\nSource: The Blue J and CPA.com Survey<\/p>\n
Those figures show that AI has moved well beyond experimental use and into the core of how many preparers handle client work.<\/p>\n
AI adoption among tax professionals has nearly doubled in a year, with most firms now using it for research, planning, and advisory services.<\/p>\n
primeimages / Getty Images<\/p>\n
American Institute of CPAs asked IRS for updated guidance on AI in tax practice<\/p>\n
The American Institute of CPAs (AICPA), the accounting profession’s largest trade group, has positioned itself as a proponent of voluntary AI disclosure while it waits for clearer federal rules.\u00a0<\/p>\n
The AICPA included a request for updated technology-related guidance in its 2026 response to the IRS’s annual tax priority list.<\/p>\n
Henry Grzes, lead manager for tax practice and ethics at the American Institute of CPAs, recommended in a comment to CNBC that practitioners obtain a signed disclosure from clients before using AI to prepare returns.<\/p>\n
Because we have no formal guidance yet on this topic, our recommendation would be [to] be safe, as opposed to finding out, ‘Uh-oh, I should have gotten this.’<\/p>\n
“Let’s say six months from now, you get more concrete guidance from the IRS that is more definitive, and you didn’t get it, and now you’re exposed,” Grzes added.<\/p>\n
The IRS Taxpayer Advocate Service flagged broader accuracy risks tied to AI in a June 2024 Tax Tips post, citing a Washington Post review by Geoffrey A. Fowler.<\/p>\n
Fowler found chatbots from TurboTax and H&R Block gave inaccurate or irrelevant responses up to half the time when asked 16 complex tax questions.<\/p>\n
The disclosure question that no federal rule answers for filers<\/p>\n
The regulatory picture will likely shift as the IRS and the AICPA work through the implications of AI in tax practice, Grzes indicated.\u00a0<\/p>\n
The profession wants to handle this correctly, but the pace of AI adoption has clearly outrun the rulemaking process, he explained to the outlet.<\/p>\n
No current federal requirement ensures disclosure of whether artificial intelligence was used in preparing a tax return or what measures were in place to protect sensitive taxpayer information.<\/p>\n
Grzes told CNBC that tax practitioners should get a signed disclosure from clients before using AI to prepare returns while federal transparency standards remain unsettled. This step would surface AI’s role in the process, regardless of whether the IRS eventually mandates it.<\/p>\n
Related: IRS tax liens are raising new alarms for your finances<\/p>\n
#IRS #rules #fail #protect #Americans #tax #risk<\/p>\n","protected":false},"excerpt":{"rendered":"
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