Responsible Use of Artificial Intelligence in Tax Practice

Categories: Ethics, IRS CE
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About Course

This self-study ethics program examines the practitioner’s professional responsibility obligations when using artificial intelligence tools in a modern tax practice. The course addresses the Circular 230 competence standard as applied to AI-assisted work, the specific and well-documented limitations of generative AI tools including the risk of fabricated citations and authorities, the confidentiality and data security considerations that arise when client information is entered into an AI tool, supervisory responsibility for staff use of AI, the practitioner’s non-delegable obligation to exercise independent professional judgment over AI-assisted work product, and practical considerations for client disclosure and staying current in this rapidly evolving area.

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What Will You Learn?

  • Apply the Circular 230 §10.35 competence standard to the use of artificial intelligence tools in return preparation and advisory work
  • Identify the specific limitations of generative AI tools, including the risk of fabricated citations and authorities
  • Apply the confidentiality and data security frameworks addressed elsewhere in this series to AI tool selection and use
  • Distinguish consumer-facing AI tools from enterprise-tier tools offering stronger data protections
  • Apply supervisory responsibility standards to staff use of AI tools under Circular 230 §10.36
  • Identify the practitioner's non-delegable obligation to exercise independent professional judgment over AI-assisted work product
  • Evaluate considerations relevant to client disclosure of AI tool use
  • Apply a practical framework for staying current as AI tools and applicable guidance continue to evolve

Course Content

Module 1 – AI Tools in Tax Practice: Capabilities, Limitations, and the Competence Standard
This module examines the practical capabilities and limitations of AI tools in tax practice and how the Circular 230 §10.35 competence standard applies to their use, including the risk of fabricated citations.

  • AI Tools in Tax Practice: Capabilities, Limitations, and the Competence Standard

Module 2 – Confidentiality and Data Security When Using AI Tools
This module addresses how the confidentiality obligations under IRC §7216 and the data security requirements of the FTC Safeguards Rule apply when client information is entered into an AI tool.

Module 3 – Supervisory Responsibility and Non-Delegable Professional Judgment
This module covers the non-delegable nature of professional judgment under Circular 230 §10.36, distinguishing tasks that may be assisted by AI from decisions that must remain the practitioner's own.

Module 4 – Client Disclosure, Reliance, and Staying Current in a Rapidly Evolving Area
This module reviews client disclosure considerations around AI use, the reliance risks of treating AI output as a final answer, and the practitioner's obligation to stay current as AI tools and guidance continue to evolve.

Final Assessment – Responsible Use of Artificial Intelligence in Tax Practice
This final assessment consists of 10 multiple-choice questions covering all four modules of this course. A passing score of 70% or better is required.

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