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Tax Return Information, Consent, and AI

Protecting tax return information is a critical component to averting identity theft and other financial crimes.  Congress enacted civil and criminal statutes in an effort to ensure that tax return preparers safeguard this data.  However, the statues can implicate the unwary.  By obtaining consent, tax return preparers can avoid fines and imprisonment in many cases.  I wrote an article for Tax Notes addressing the consent requirement and issues to consider in the context of artificial intelligence ("AI") platforms.

TRPs are generally not authorized to disclose or use tax return information without consent unless specifically allowed by an exception40 in section 7216 or the corresponding regulations.41 Therefore, it is prudent to obtain express written consent from each taxpayer before disclosing and using tax return information.42