Tax Experts: IRS Regulations on AI Disclosure in Tax Preparation Unclear, Sparking Industry Debate
The tax industry is debating whether tax professionals need to disclose to clients their use of AI in preparing tax returns. Although the IRS issued its first AI-related guidance in June, requiring tax practitioners to review and verify AI-generated work and ensure that billing reflects the efficiency gains brought by AI, the guidance does not explicitly state whether the use of generative AI in preparing tax returns needs to be disclosed to clients. Experts point out that existing laws stipulate when disclosure and client signature consent are required (e.g., sharing information with third parties), but the software exception clause contained therein creates a gray area for AI use. Organizations such as the American Institute of Certified Public Accountants (AICPA) have asked the IRS for more guidance on AI use and recommend that tax practitioners, in the absence of clear guidance, should proceed cautiously and obtain signed client disclosures to avoid potential penalties or imprisonment risks.
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Disclaimer: This content reflects the author's personal views only and does not constitute investment advice.
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