Practice area
TaxationTaxation
Ground the analysis in the taxpayer, transaction and relevant period. Independently check the governing provisions, factual assumptions, calculations and available interpretations before advice or lodgement.
Key facts
- Tasks covered
- 32
- Tasks with a step-by-step checklist
- 10
- Local differences
- 2 jurisdictions where this area changes
Jurisdiction
Tasks
GreenLawyer reviewYellowClose supervisionRedLawyer-led
| Task | How AI is used | Human involvement | What the lawyer must review |
|---|---|---|---|
| Draft a tax advice letter from the facts and the issues list | Produce a structured first draft (facts, issues, analysis headings, conclusion placeholder) from the lawyer's facts and the instruments the lawyer has named. | YellowClose supervision |
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| Draft US tax advice so it can survive Circular 230 § 10.37 | Produce a first-draft advice letter from the facts and issues the lawyer supplies, with every citation marked unverified. | YellowClose supervision |
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| Draft a tax objection or protest from the assessment and the file | Draft the objection structure — grounds, facts, relief sought — from the assessment, the return papers and the lawyer's issues list. | YellowClose supervision |
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| Draft a tax objection under s 14ZU of the TAA 1953 from the assessment | Draft the objection structure — grounds, supporting argument and relief sought — from the assessment, the return papers and the lawyer's issues list. | YellowClose supervision |
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| Draft tax appeal or review submissions | Under the lawyer's direction the tool works up and revises the contentions in the appeal statement or statement of facts, issues and contentions from the objection decision's reasons, the grounds stated in the objection and the documents in the evidence index, tying each contention to a stated ground and a listed document and flagging any contention that travels outside the objection grounds or has no document behind it; the lawyer settles every contention and its authorities. The tool writes no part of the affidavits, witness statements or expert reports filed in the appeal — no draft, no scaffold, no suggested paragraphs — and AI use in anything filed is disclosed as the tribunal's and the court's practice notes require. | YellowClose supervision | The lawyer writes every ground and contention, then checks their own draft against the objection itself: whether each ground was stated there or requires leave to raise, how the onus of showing the assessment is excessive is discharged on each ground, and whether each asserted fact is provable from evidence the client can actually put on. The lawyer independently confirms the forum, the Part IVC filing period running from service of the objection decision, and the Court's or Tribunal's requirements for the statement as filed. |
| Draft a private or product ruling application | Draft the scheme description, facts, questions and supporting documents list from the transaction papers. | YellowClose supervision |
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| Draft a private ruling application under s 359-10 of the TAA 1953 | Draft the scheme description, facts, relevant tax laws and questions to be decided from the transaction papers. | YellowClose supervision |
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| Classify supplies for goods-and-services or value-added tax | From the contracts and an invoice sample, tabulate supplies with a candidate taxable, exempt, zero-rated or out-of-scope label and the clause or fact behind it. | YellowClose supervision |
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| Build a capital-gains calculation framework from the transaction papers | Extract dates, consideration, cost elements and claimed concessions into a calculation table with document references. | YellowClose supervision |
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| Build a CGT event and cost-base calculation table from the papers | Tabulate dates, consideration, cost-base elements and concessions, naming the Div 104 ITAA 1997 CGT event and any small-business or main-residence concession claimed. | YellowClose supervision |
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| Classify employee benefits for fringe or employment-taxes review | From the benefits register, classify each benefit type, flag likely exemptions and list the facts still needed for the return. | YellowClose supervision |
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| Build a transfer-pricing facts and methods table | Extract related-party transactions, prices, contracts and comparable-search papers into a table mapped to the method the lawyer has selected. | RedLawyer-led |
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| Build a transfer-pricing facts table under Division 815 of the ITAA 1997 | Tabulate related-party transactions, prices, contracts and comparables against the arm's-length method the lawyer selected, and flag thin-capitalisation issues. | RedLawyer-led |
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| Draft an R&D activity description against the eligibility tests | Turn the technical notes into a first-draft activity description, separating core and supporting activities and listing missing evidence. | YellowClose supervision |
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| Draft an R&D activity description under Division 355 of the ITAA 1997 | Draft the activity description from technical notes, separating core (s 355-25) and supporting (s 355-30) activities, and list missing evidence and AusIndustry pitfalls. | YellowClose supervision |
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| Build a shareholder-loan and trust-distribution issues table | From the accounts, minutes and loan documents, list payments, loans, unpaid entitlements and related-party dealings with a candidate tax issue on each row. | RedLawyer-led |
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| Build a Division 7A and trust-distribution issues table from the accounts | From the accounts, minutes and loan papers, list payments, loans, UPEs and related-party dealings, flagging candidate deemed-dividend and s 100A issues on each row. | RedLawyer-led |
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| Map transfer, landholding or payroll taxes on a transaction | Extract the taxable facts (property, consideration, grouping, landholdings) into a table lined up against the tax heads the lawyer has named. | YellowClose supervision |
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| Build a tax due-diligence issues list from the data room | Map the data-room papers to a tax DD checklist (returns, audits, losses, incentives, employment taxes, international) and mark empty folders. | YellowClose supervision |
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| Build a tax due-diligence issues list covering ATO audits, CGT, GST and FBT | Map the data-room papers to a tax DD checklist (returns, ATO audits, tax losses, CGT, GST/FBT, PE risk) and mark empty folders. | YellowClose supervision |
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| Map taxing points for an employee share or option plan | From the plan rules and offer documents, list grant, vesting, exercise and disposal events with a candidate taxing point and reporting obligation on each row. | YellowClose supervision |
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| Map employee-share-scheme taxing points under Division 83A of the ITAA 1997 | From the plan rules and offer documents, list grant, vesting, exercise and disposal events with a candidate Div 83A taxing point and ATO reporting obligation on each row. | YellowClose supervision |
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| Build a transaction steps paper from the deal documents | Turn the term sheet, agreements and board papers into a dated steps paper of who does what, with tax-sensitive steps flagged for the lawyer. | YellowClose supervision |
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| Reconcile a tax computation to the accounts and the workpapers | Compare the draft computation, the accounts and the workpapers and list unexplained differences by line. | YellowClose supervision |
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| Extract tax representations, indemnities and locked-box figures from an SPA | Pull tax warranties, indemnities, conduct-of-claims and locked-box or completion-accounts tax lines into a table with clause references. | GreenLawyer review |
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| Prepare an information request for a return position or ruling | Map the available facts to the ruling or return checklist the lawyer has selected and draft a request for the missing documents. | YellowClose supervision |
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| Set an AI-use protocol for a tax practice under the TPB Code | Draft a protocol mapping AI tasks to Code obligations (competence, confidentiality, reasonable care). | YellowClose supervision | Check against TPB(GS) 55/2026 and sign off which tasks may use AI. |
| Summarise a private ruling or ATO interpretative decision for a client | Draft a plain-language summary of the ruling and its conditions. | YellowClose supervision | Tax lawyer checks against the ruling text and currency. |
| Build a document index for an ATO audit or review response | Classify and index documents produced for the ATO request. | GreenLawyer review | Review privilege and completeness before production. |
| Draft responses to an ATO information request from the client's records | Draft answers mapped to each request item. | RedLawyer-led | Lawyer settles all answers; accuracy duties to the ATO apply. |
| Check that AI-assisted tax advice cites current legislation and rulings | Flag citations and confirm they exist and are current. | YellowClose supervision | Lawyer verifies every citation in the source. |
| Assess privilege risk before uploading tax advice to AI tools | List documents that are privileged and the tool's data terms. | YellowClose supervision | Lawyer decides what may be uploaded. |
| Assess privilege risk before using AI on tax advice | Review privilege risk. | YellowClose supervision | Lawyer decides. |
| Summarise tax technology changes for clients | Summarise ATO and tax technology developments. | GreenLawyer review | Lawyer verifies. |
| Run ATO ruling citation checks | Verify that rulings exist and are current. | YellowClose supervision | Lawyer signs off. |
| Draft a private ruling request and check each cited provision against the legislation it names | Draft the request from the facts the client supplied and the provisions the lawyer has opened. | YellowClose supervision | Open each cited provision. Remove a provision the compilation does not contain. |
| Prepare a depreciation schedule from the client's asset register | List assets, costs and dates from the register into a schedule. | YellowClose supervision | Match every cost and date to the register. The tax agent remains responsible for the figure that is lodged. |
| Draft an objection to an income tax assessment from the notice of assessment | Draft the objection from the notice of assessment and the client's instructions. | YellowClose supervision | Match the year, the tax and the grounds to the notice. Do not add a ground the notice and the instructions do not support. |
| Record on the file that a generated objection was checked against TPB(GS) 55/2026 before lodgement | List the checks the agent still has to do. Do not mark the checks as done. | YellowClose supervision | The agent reads TPB(GS) 55/2026, completes the checks, and only then records them on the file. |
| Draft advice on whether a supply is a taxable supply and check the reasoning against the statute | Set out the supply facts. Do not conclude that the supply is taxable. | YellowClose supervision | The tax agent reads the statute and decides. A generated conclusion is not that decision. |
| Prepare rental-property tax-return questions from the prior-year labels without filling figures the client has not given | List questions from the prior-year labels. Leave the figures blank. | YellowClose supervision | Do not accept a figure the client has not supplied. The agent checks the return before it is lodged. |
Firm-wide obligations
| Obligation | What it covers |
|---|---|
| Trust accounting & handling client money | Checks that apply across files. |
| Costs, billing & litigation funding | Checks that apply across files. |
| Client-facing & access-to-justice AI tools | Checks that apply across files. |
| Incoming evidence — deepfakes & synthetic documents | Checks that apply across files. |
| AI decision systems | Checks that apply across files. |
| Confidentiality & client information | Checks that apply across files. |
| AML/CTF — the practice as a reporting entity | Checks that apply across files. |
What changes in New Zealand
| Topic | What changes |
|---|---|
| Governing law | Income Tax Act 2007, administered by Inland Revenue. Take GST and other taxes from current IRD material. |
| Forum | The Taxation Review Authority is listed in the Courts of New Zealand GenAI guidelines. |
| Not Australian law | No ATO, no Division 7A, no CGT event labels and no state stamp duty. Do not draft an ATO objection or ART tax appeal. |
| Limits on AI assistance |
|
- Income Tax Act 2007 · 2026-09-23
- Courts of New Zealand: GenAI guidelines — Lawyers (7 December 2023) · 2026-09-23
What changes in United States
Known here as: Taxation
| Topic | What changes |
|---|---|
| What changes | Internal Revenue Code, Treasury regulations and Circular 230, not the ITAA. State taxes are state law. |
| IRS OPR 2026-19 | Maps generative AI to Circular 230 §§ 10.22, 10.27, 10.35, 10.36 and 10.37 and to IRC §§ 6713 and 7216 (unauthorised use of return information). |
| Review | Review AI-created documents before they go to a client or the IRS. |
| Limits on AI assistance |
|
- IRS Office of Professional Responsibility, Issue 2026-19, Introductory Guidelines for Responsible AI Use in Federal Tax Practice · 2026-09-23
- IRS Office of Professional Responsibility and Circular 230 · 2026-09-23
- ABA Formal Opinion 512, Generative Artificial Intelligence Tools (29 July 2024) · 2026-09-23
Precedents for this area
- Letter of tax advice with confidence rating and penalty position (Letter, AI use Yellow). Structured letter of tax advice: answer first, then scope, facts and assumptions, analysis by issue, a defined confidence scale tied to the 'reasonably arguable' test, the penalty position and next steps. Built to keep privilege and to record any AI use.
- Letter responding to an ATO formal notice to give information or produce documents (with privilege claim) (Letter, AI use Red). Covering letter and schedules for answering an ATO formal notice: an item-by-item response, a document index, privilege and concession claims set out the way the ATO's LPP protocol expects, an extension request and a client confirmation.
- Private ruling application (ATO approved form): completion guide (Form, AI use Yellow). Guide to completing the ATO's private ruling application (NAT 74957) or an equivalent letter: questions, scheme facts, assumptions, arguments, draft ruling and declarations, with the traps that leave a ruling unreliable.
- Objection to an ATO assessment or decision: completion guide and grounds structure (Form, AI use Yellow). Guide to lodging a Part IVC objection online, on the PDF form (NAT 13044) or by letter, with a model structure for stating the grounds 'fully and in detail', the time limits, and what happens after lodgment.
- Voluntary disclosure to the ATO: completion guide and penalty-reduction checklist (Form, AI use Yellow). Guide to making a voluntary disclosure in the ATO's approved form: choosing the channel, describing and quantifying each error, and securing the penalty reductions in s 284-225 of Schedule 1 to the TAA.
- Verification checklist for AI-assisted tax research, advice and objections (Checklist, AI use Yellow). File checklist to complete before relying on AI output in tax work: tool and client-permission checks, verification of every provision, ruling, case and figure, and a signed record of review, aligned with TPB(GS) 55/2026 and the solicitors' conduct rules.
- Client notice on AI use with tax records and tax file numbers (Notice, AI use Green). Plain-English notice and consent form telling tax clients which AI tools the firm uses with their records, how tax file numbers are kept out of them, where data is stored, and how to opt out.
All precedents for Taxation. Signed-in accounts can read the full text.