AI-Use Checker · AI Lab for Accountants

Will any client tax-return information go into the tool?

The test isn’t “is it sensitive?”, it’s “would I have this but for preparing their return?” That includes amounts, documents, and anything you derive from the return (§301.7216-1).

Yes, real client return infoNames, amounts, W-2/1099/K-1 data, documents, or anything derived from the returnNo, anonymized or generic onlyAbstracted facts (“the client,” “$X,” “[STATE]”), or no client facts at allNot sureTreated conservatively as “yes”

What is the AI actually doing with it?

The hinge of §7216: a “substantive determination involves an analysis, interpretation, or application of the law” (§301.7216-2(d)). Clerical processing is not that.

Clerical / processingOCR, extracting, summarizing, organizing, formatting source documentsClassifying / categorizingCoding transactions or expenses (can edge toward tax characterization)Drafting a client message that contains their infoAn email or letter that includes the client’s return infoAnalyzing a tax positionApplying law to their facts: deductions, §199A, nexus, credit eligibility, “should they qualify”

Which best describes the tool, and your account?

This is really the account-tier question: a personal/consumer plan and a firm Team/Enterprise plan carry different contract terms (training, retention, DPA), and that is what changes how defensible the disclosure is. On commercial plans the DPA and no-training terms are often standard; zero-retention is a separate, optional control, not a prerequisite.

Self-hosted inside our firmRuns in our environment; no outside vendor can access the dataFirm-approved enterprise/business tierU.S. processing, signed agreement/DPA, contractually no training on our dataPersonal / free / consumer accountNo firm agreement; vendor may retain or train on inputsNot sure of the termsHaven’t confirmed training / retention / agreement

Can anyone outside the U.S. access the data?

Vendor staff, subprocessors, an offshore team, or foreign remote access to a U.S. server all count. Offshore disclosure triggers consent, and an SSN generally can’t be consented offshore.

No, U.S. onlyProcessing and all human access stay in the United StatesYes, offshore access possibleIncluding subprocessors or remote access from abroadNot sureTreated conservatively until confirmed

Educational tool, not legal advice. It applies IRC §7216 / Treas. Reg. §301.7216-1/-2/-3 to common AI uses; an AI-specific rule does not exist, so some steps are reasoned inference (flagged as inference). Verify against primary source and your state board before relying. Built on the AI Lab's §7216 Decision Framework and Regulatory Foundation.

AI Lab for Accountants · §7216 self-check