Assess a tax practitioner's exposure under Circular 230
Key facts
- Human involvement
- YellowClose supervision
- How AI is used
- List each IRS filing or representation in the file, the statement made to the IRS or the client, and the source the practitioner relied on. Do not grade the conduct.
- What the lawyer must review
- The IRS Office of Professional Responsibility investigates and disciplines violations of Circular 230, which governs practice before the IRS by attorneys, certified public accountants and enrolled agents, and also covers appraisers and Annual Filing Season Program return preparers. Section 10.22 (31 CFR § 10.22) requires a practitioner to exercise due diligence in preparing, approving and filing tax returns and other papers relating to IRS matters, and in determining the correctness of oral or written representations to the Treasury and to clients about any matter the IRS administers. A practitioner is presumed to have exercised due diligence when relying on another person's work product if the practitioner used reasonable care in engaging, supervising, training and evaluating that person, except as §§ 10.34 and 10.37 modify that presumption. Section 10.50 authorises censure, suspension or disbarment after notice and an opportunity for a proceeding if the practitioner is incompetent or disreputable within § 10.51, fails to comply with Circular 230 under the § 10.52 standards, or with intent to defraud wilfully and knowingly misleads or threatens a client. A monetary penalty may not exceed the gross income derived, or to be derived, from the conduct. You decide the exposure. Do not treat a generated summary as the diligence § 10.22 requires.
- Written for / version
- United States versionUS
Who does what
| Role | What they do |
|---|---|
| Assistance | Consider narrowly defined preparation support after confirming the tool’s capability and permitted scope. |
| Lawyer | Set the scope, supervise the work closely, verify every part relied on, resolve omissions and exceptions, and approve the exact output. |
Checklist
- Check the current court or regulator requirements, prescribed form and attachments for the intended document and filing.
- Confirm that the actual tool, feature and processing terms permit use of this information, including access, retention, training and disclosure conditions.
- Confirm the output against the client’s instructions and the complete relevant source material, including omissions or contradictions.
- Resolve exceptions and record the responsible lawyer’s approval of the exact output and intended use.