Treasury Circular 230 — Practice before the IRS
Governs practitioner conduct. December 2024 proposal added technological-competency language to §10.22 due-diligence rules.
Sections most relevant to AI use
§10.22 — due diligence
Returns, representations to Treasury, representations to clients. The load-bearing AI-accountability rule today.
§10.34 — standards for positions
Substantial authority / reasonable basis with disclosure, cross-referencing §6694 preparer-penalty standards.
§10.35 — competence
Current baseline + the proposed REG-116610-20 technological-competency overlay.
§10.37 — written advice
Six-factor test for advice + the reasonable-practitioner standard. Attaches the moment AI output crosses to client-facing.
Timeline
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1921
Circular 230 origin
Treasury authority under 31 USC §330
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2007
T.D. 9359 — §10.22 due-diligence reformulation
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Jun 2014
T.D. 9668 — §10.22(b), §10.35, §10.36, §10.37 rewrite
Replaced 'covered opinions' framework; added reliance safe harbor
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Dec 26, 2024
REG-116610-20 NPRM published
Proposed §10.35 adds technological-competency language
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Feb 24, 2025
Comment period closed
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Mar 6, 2025
Public hearing held
IRS Building auditorium, Washington
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May 2026
Final rule pending
Not finalized; forecast late 2026 or 2027