Plain-English guide · Five-minute read

What the IRS said about AI in tax practice

On June 24, 2026 the IRS Office of Professional Responsibility (OPR) released Alert 2026-19, Introductory Guidelines for Responsible AI Use in Federal Tax Practice. It applies to everyone who practices before the IRS under Circular 230, including CPAs, enrolled agents and attorneys.

The duties it points to

• §10.22Due diligence. Review AI output before it goes to a client or the IRS. Check facts, figures and citations yourself. “The software said so” is not a defense.
• §10.35Competence. Understand what the tools you use can and can’t do, including how they fail: made-up citations, confident wrong numbers, skipped items.
• §10.36Firm procedures. Whoever runs the tax practice should have procedures for AI use: approved tools, secure data handling, vetting vendors and training staff.
• §10.37Written advice. AI-generated projections, forecasts and citations in written advice must be independently verified against all the relevant facts.
• §10.27Fees. Fees shouldn’t charge for manual effort AI eliminated. Efficiency gains should show up in the bill.

Client information. The alert tells practitioners to use secure, firm-approved AI tools and never to put sensitive client data into public or unsecured AI platforms. Separately, IRC §7216 limits disclosing tax return information, and commentators note there is no exception written for AI tools. The AICPA Code treats entering client data into a third-party tool as a disclosure too.

Is a written AI policy required?

Not strictly. The alert frames its practices as recommendations: written policies and procedures, staff training, secure data handling, vetting vendors, and documenting AI use and how it was checked. In practice, if something goes wrong, a written policy and training records are how a firm shows it met the §10.36 procedures standard. Industry surveys suggest only about one firm in five has an AI policy today.