Section 7216 already applies. The IRS has not said in terms whether an AI provider is a disclosure

Disclosure: I co-founded Mitosis Labs, which runs Private SuperIntelligence. This is an adaptation of the original guide. General information, not legal or tax advice. Talk to your own counsel about your firm's facts.

If you prepare returns, Section 7216 makes it a crime to knowingly or recklessly disclose a client's tax return information, or use it for anything other than preparing the return, unless an exception applies or the client has signed a valid consent. Neither the statute, the regulations nor any IRS guidance we found says in terms whether sending that information to an AI provider counts as a disclosure.

OPR, consent, and the WISP

On June 24, 2026 the IRS Office of Professional Responsibility issued Issue Number 2026-19 and told practitioners to use "only secure, enterprise-approved AI". It did not answer the consent question. Asking an AI to analyze a client's position looks a lot like a substantive determination, which "involves an analysis, interpretation, or application of the law." For that the regulation requires consent first. A Form 1040 consent must "identify the specific recipient (or recipients)". A line authorizing "various AI tools" will not meet that test. The penalty is a misdemeanor: a fine of up to $1,000 ($100,000 where section 6713(b) applies), up to one year in prison, or both.

IRS Publication 4557 states that under the FTC Safeguards Rule, "tax return preparers must create and enact security plans to protect client data," and that failure to do so "may result in an FTC investigation." An AI vendor that receives client data belongs in the WISP.

We built Private SuperIntelligence as a one-client deployment Mitosis Labs sets up and runs. The provider keeps no copy of the work, trains nothing on it and cannot see the outputs. It does not replace counsel.

Private SuperIntelligence takes a limited number of families at a time so every one gets the same standard of service. Book a private call (ref CPA1-DEV) to talk through your office with Alex Morris.

Prakshal Jain (PJ), Co-founder and CTO, Private SuperIntelligence (by Mitosis Labs)

Alexander Morris, Co-founder and CEO, Private SuperIntelligence (by Mitosis Labs)

Originally published at privatesuperintelligence.si.

Sources: 26 U.S.C. § 7216 https://www.law.cornell.edu/uscode/text/26/7216 ; OPR Issue Number 2026-19 https://www.irs.gov/pub/opr-taxpros/issue-number-2026-19-introductory-guidelines-for-responsible-ai-use-in-federal-tax-practice.pdf ; Rev. Proc. 2013-14 https://www.irs.gov/irb/2013-03_IRB ; 16 CFR § 314.4 https://www.law.cornell.edu/cfr/text/16/314.4