AI Tax Practitioner is the working reference desk for US tax professionals navigating AI.
We cover what the regulations actually require (§7216 client-data consent, Circular 230 §10.22 due diligence, FTC Safeguards, state-board overlays), which AI tools hold up in a real return workflow versus which are vendor pitch, and the practitioner-facing risks most marketing glosses over. The opportunity is real, and so is the compliance lag.
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Lead — Regulatory + AI
Running client data through an LLM triggers §7216. Here's the consent language Treasury Reg §301.7216-3 actually requires, the Rev. Proc. 2013-14 §5.04 mandatory boilerplate most practitioner templates omit, and a vendor-by-vendor compliance tier for every AI tool a US tax preparer realistically uses.
OBBBA renamed FDII to FDDEI and recalibrated the §250 deduction (37.5% → 33.34%, ~14% effective rate). QBAI is gone. Two new DEI exclusions hit transactions after June 16, 2025. The full TY2026 regime hits January 1, 2026. Most AI tools currently return mixed FDII/FDDEI terminology for a structural reason this article names.
AITP Editorial · May 12, 2026 · 18 min
OBBBA replaced the uniform 100% §1202 exclusion with a tiered 50/75/100% system at 3/4/5 years, raised the per-issuer cap to $15M, and lifted the aggregate-asset threshold to $75M — for stock issued after July 4, 2025.
AITP Editorial · May 15, 2026 · 16 min
OBBBA §70323 renamed GILTI to NCTI inside §951A. §70321 dropped the §250 deduction from 50% to 40%. §70323 eliminated the QBAI offset. §70312 cut the §960(d) FTC haircut from 20% to 10%. Effective for tax years beginning after December 31, 2025.
AITP Editorial · May 15, 2026 · 17 min
Circular 230 binds your license; AI is what your license is now exposed to. §10.22 due diligence, §10.34 positions, §10.35 competence, §10.36 firm procedures, §10.37 written advice, and §10.51 disreputable conduct — mapped onto AI-assisted tax practice with verbatim regulatory text, the eight-case federal canon, and a defensible-workflow checklist.
AITP Editorial · May 12, 2026 · 22 min
AI-assisted FBAR for solo EAs and small-firm CPAs. Five workflow stages — account discovery, statement aggregation, currency conversion, signature-authority detection, §10.22 review trail. Post-Bittner penalties ($16,536 / $165,353 inflation-adjusted), crypto-NPRM stale-data trap, and a §7216-defensible vendor matrix.
AITP Editorial · May 16, 2026 · 21 min
| Citation | Title | Status | Last reviewed |
|---|---|---|---|
| §7216 | IRC §7216 — Disclosure of taxpayer information Restricts disclosure of taxpayer return information without explicit, written, dated consent. Applies to AI vendors processing client data. | Current | May 9, 2026 |
| Circular 230 | Treasury Circular 230 — Practice before the IRS Governs practitioner conduct. December 2024 proposal added technological-competency language to §10.22 due-diligence rules. | Current | May 9, 2026 |
| OBBBA | One Big Beautiful Bill Act (OBBBA) Signed July 4 2025. Reset the TCJA-sunset narrative. NCTI replaces GILTI; FDDEI replaces FDII; §174A enacted alongside legacy §174; SALT cap raised to $40K through 2029; §168(k) restored; §199A made permanent. | Current | May 15, 2026 |
Walk through the §10.22 due-diligence requirements as they apply to AI-assisted return preparation. Scored output, downloadable summary, no inputs stored.
Generate a §7216-compliant AI-vendor consent. Picks from CLEAN-tier vendors (CoCounsel, ChatGPT Team, Blue J, Hive Tax, and more), stitches in the Rev. Proc. 2013-14 §5.04 mandatory boilerplate, layers California §17530.5 and New York §32 overlays where applicable, exports as text, Word document, or PDF. Client-side only.
| Vendor | Type | §7216 | SOC 2 | Pricing |
|---|---|---|---|---|
| Intuit ProSeries | Stack | Verified | Yes | $$ |
| Intuit Lacerte | Stack | Verified | Yes | $$$ |
| Drake Tax | Stack | Verified | Yes | $$ |
| Thomson Reuters UltraTax CS | Stack | Verified | Yes | $$$ |
| Wolters Kluwer CCH Axcess Tax | Stack | Verified | Yes | $$$ |
| Intuit ProConnect | Stack | Verified | Yes | $$ |
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One careful read per week. New IRS guidance, vendor moves that affect working preparers, the article we read so you didn't have to.
Launches summer 2026.
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