AICPA, former IRS commissioner to lead initiative on AI in tax

The AICPA and former IRS commissioner Danny Werfel will lead an initiative bringing together leaders to advance practical approaches to the responsible use of artificial intelligence in tax administration and tax practice.

Participants in the Council on AI Risk in Tax (CART) include groups and individuals from accounting, law, technology, government, and academia.

CART participants, a group that includes the National Association of Enrolled Agents and the Federation of Tax Administrators, recognize that AI is rapidly transforming how tax compliance, administration, and advisory services are affected by Al, the AICPA said in a news release. As adoption accelerates, the conversation must include questions related to information integrity, accountability, and risk management.

CART was established to:

• Test, refine, and strengthen the AI Risk Framework for Tax, designed by Werfel and published in The Tax Adviser, to ensure it remains practical, relevant, and responsive to evolving AI capabilities, industry practices, and regulatory expectations. The framework includes 20 risk areas organized into four categories: information integrity, fairness and legitimacy, security and data, and institutional capacity.
• Identify additional tools, guidance, and other resources that can help organizations manage AI-related risks and promote responsible innovation.
• Create a forum for collaboration and shared learning where stakeholders can exchange lessons learned, emerging practices, and practical approaches to responsible AI use in tax.

“Tax is high stakes, and we cannot assume that emerging AI tools will police themselves. The AI risk framework published earlier this month provides a starting point,” Werfel said. “Through this new council, the AICPA is bringing the tax community together to refine that framework and explore additional tools that can help tax administrators and practitioners realize the benefits of AI while managing the various and material risks that AI presents.” 

Melanie Lauridsen, the AICPA’s vice president–Tax Policy & Advocacy, said AI in tax has become a strategic necessity and not just an opportunity.

“AI has the potential to transform how tax is administered and practiced but requires thoughtful governance, practical risk management, and trusted guidance,” she said. “That’s why this council was launched, bringing together leaders from across the tax ecosystem to evolve the recently published risk framework, but also to develop additional tools and insights needed to adopt AI responsibly while preserving trust, accountability, and confidence in tax.”

CART will meet throughout the year to discuss emerging AI risks and identify opportunities to strengthen risk management practices across the tax landscape.

The council is being formed as the Office of Professional Responsibility (OPR) within the IRS has written guidelines suggesting that tax practitioners should pass AI-related cost savings on to clients. The AICPA has sought clarification from OPR, saying the language doesn’t appear to allow for a value-pricing model and that it overlooks the costs and risks associated with implementing the technology.

The guidelines cite Treasury Circular 230, Regulations Governing Practice Before the Internal Revenue Service (31 C.F.R. Part 10), and its prohibition on charging unconscionable fees.

AICPA resources

The AICPA has provided guidelines and FAQs on the use of AI in federal tax practice.

— To comment on this article or to suggest an idea for another article, contact Martha Waggoner at Martha.Waggoner@aicpa-cima.com.