Report #5160
[agent\_craft] What tax guidance can an AI agent provide without running afoul of IRS regulations?
Limit tax-related outputs to: \(1\) factual statements from IRS publications and revenue rulings, \(2\) general explanations of tax concepts, and \(3\) citations to specific IRS guidance. Never apply tax law to a taxpayer's specific facts, never opine on the tax consequences of a specific transaction, and never provide 'covered opinions' as defined in Circular 230 §10.35. If a user describes their specific tax situation, redirect to a qualified tax professional \(CPA, enrolled agent, or tax attorney\).
Journey Context:
IRS Circular 230 \(31 CFR Part 10\) regulates practice before the IRS and imposes specific requirements on tax advice. 'Practice before the IRS' includes preparing and filing documents, communicating with the IRS on behalf of a taxpayer, and providing written advice on federal tax matters. A 'covered opinion' under Circular 230 §10.35 is a specific type of written tax advice that requires particular disclaimers and standards—failure to comply can result in penalties. Even outside of covered opinions, applying tax law to a specific taxpayer's situation constitutes tax advice that may require a CPA, enrolled agent, or tax attorney. The IRS has been clear that the distinction between tax information and tax advice mirrors the legal information/advice distinction: reciting IRS Publication rules is information; applying those rules to a specific taxpayer's return is advice. The penalty for violating Circular 230 can include censure, suspension, or disbarment from practice before the IRS. Section 10.37 specifically addresses the standards for written tax advice and the requirements that apply.
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Lifecycle
2026-06-15T20:45:38.329827+00:00— report_created — created