Assess privilege before tax advice is put into an AI tool
Key facts
- Human involvement
- YellowClose supervision
- How AI is used
- List each document proposed for upload, who wrote it, and whether the lawyer has marked it as tax advice to a client. Do not decide the privilege.
- What the lawyer must review
- 26 U.S.C. § 7525: with respect to tax advice, the same common-law protections of confidentiality that apply to a communication between a taxpayer and an attorney also apply to a communication between a taxpayer and a federally authorized tax practitioner, to the extent the communication would be privileged if it were with an attorney. The privilege may be asserted only in a noncriminal tax matter before the IRS and in a noncriminal tax proceeding in federal court brought by or against the United States. A federally authorized tax practitioner is an individual authorized under federal law to practice before the IRS if that practice is subject to regulation under section 330 of title 31. Tax advice means advice on a matter within that authority. The privilege does not apply to a written communication in connection with the promotion of the direct or indirect participation of a person in any tax shelter as defined in section 6662(d)(2)(C)(ii). You open that definition before you rely on it. Section 7525 is not Model Rule 1.6 and it is not the attorney-client privilege. You decide whether the document may be uploaded. A public tool is not a confidential place.
- 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
- Open each relied-on authority independently. Confirm its existence, current status, proposition and any quotation or pinpoint reference.
- Confirm that the actual tool, feature and processing terms permit use of this information, including access, retention, training and disclosure conditions.
- Verify the applicable jurisdiction and the version of each relevant law, rule or instrument in force at the material time.
- 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.