More tax professionals are using artificial intelligence to prepare returns, research tax law, and analyze documents, but the rules governing whether they must tell clients about it remain unclear, according to a report by CNBC.
In June 2026, the IRS released its first AI-related guidance for tax practitioners. That guidance required practitioners to review and verify AI-generated work and said billing should reflect efficiencies gained through using AI. It did not, however, specifically say whether using generative AI to prepare a tax return must be disclosed to clients.
The gap matters because existing law already governs when tax preparers must make disclosures and get a client's signed permission. Those rules apply when a professional shares tax documents with a third party, such as a financial advisor. But exceptions exist, ones that have historically applied to tax software, and some experts say AI could fall into a similar gray area.
"Our members, as well as the AICPA, are clearly trying to get our arms around this because it's obviously all changing, and more and more folks are using AI in their practices, and they want to do the right thing," said Henry Grzes, lead manager for tax practice and ethics with the American Institute of Certified Public Accountants.
The core privacy protection for taxpayers comes from Section 7216 of the Internal Revenue Code, which bars tax preparers from sharing or using a taxpayer's information for purposes beyond preparing the return. The last formal IRS guidance on Section 7216 was issued in 2013.
"The problem with 7216 is that the last formal guidance we've received from the IRS goes back to 2013," Grzes said. "So when you think about how the tax practice landscape has changed in those 13 years, we're really hoping for some additional guidance from the IRS, both for 7216 and the use of AI," Grzes said.
Usage of AI among tax professionals has climbed sharply. A June 2026 survey from Blue J and CPA.com, based on responses from more than 1,000 tax professionals, found that 60 percent use AI for tax research at least weekly, up from 33 percent in 2025. The same survey found 44 percent use AI for advisory projects, 40 percent for tax planning, 39 percent for compliance research, 36 percent for document analysis, and 35 percent for drafting.
Earlier data showed the trend was already building. A 2024 report from the Thomson Reuters Institute, drawing on a survey of 330 tax and accounting professionals, found about 25 percent were using public-facing, open-source generative AI tools, with only 9 percent using proprietary tax-specific AI technology. Those numbers have since grown considerably.
The AICPA submitted a response to the IRS's 2026 annual request for input, urging the agency to prioritize updated guidance on both Section 7216 and the use of AI in tax practice.
