Sponsored by Oriam AI Institute. This article is about Oriam AI Institute, which paid for it.
Springfield, Missouri, businesses are increasingly aware of artificial intelligence‘s impact. A June 2024 Springfield Business Journal report indicated that 33% of local survey respondents identified advancements in technology and artificial intelligence as a top five issue for businesses in the coming years. As AI tools become more prevalent, understanding their ethical and legal implications is paramount, especially for professions handling sensitive client data. Oriam AI Institute, the education arm of Springfield-based Oriam AI, has released a timely new briefing addressing these concerns for tax preparers.
Understanding IRC §7216 in the Age of AI
The new briefing, titled “IRC §7216 and AI: The Briefing for Missouri Tax Preparers,” directly addresses a critical federal regulation: IRC §7216. This statute governs the disclosure and use of tax return information by tax preparers. The Oriam AI Institute’s guide highlights a significant risk: pasting a client’s W-2 or K-1 into a public AI tool can constitute an unauthorized disclosure under IRC §7216, potentially leading to federal criminal charges. The briefing explains the rule, associated penalties, and why the regulation’s existing exceptions do not adequately cover AI usage. It also details what constitutes valid client consent for data use and how on-premise systems can help keep client returns secure within an office environment. This free briefing is available at institute.oriamai.online.
Why This Matters for CPA Firms and Enrolled Agents
For CPA firms, enrolled agents, and tax preparers in Missouri, compliance with IRC §7216 is not merely a best practice, it is a legal imperative. The briefing from Oriam AI Institute underscores the potential for severe consequences, including federal criminal charges, for non-compliance. As the U.S. Chamber of Commerce and Teneo’s 2024 survey found nearly all small businesses, 98%, are using AI-enabled tools, with 40% utilizing generative AI, the risk of accidental disclosure through AI platforms is substantial. This guide provides clear, plain-English explanations to help professionals understand how to protect client data while potentially exploring AI tools.
Missouri’s Approach to AI and Professional Ethics
Missouri has demonstrated a pragmatic approach to AI regulation, often relying on existing legal frameworks rather than enacting new, comprehensive AI statutes. This means that established rules, like IRC §7216 for tax preparers and ethical guidelines for lawyers, are being applied to AI contexts. For instance, the Office of Legal Ethics Counsel and Advisory Committee of the Supreme Court of Missouri issued Informal Opinion 2024-11 in April 2024, providing guidance on generative AI use by attorneys, emphasizing client confidentiality and verification of AI output. This mirrors the need for tax preparers to be equally diligent. The state has also seen consequences for AI misuse, such as the February 2024 *Kruse v. Karlen* case, where the Missouri Court of Appeals, Eastern District, sanctioned a litigant $10,000 for fictitious AI-generated citations. Such instances highlight the critical importance of understanding and adhering to existing regulations when integrating AI into professional workflows.
Related: AI Firms Investigate Thousands of Security Incidents – OpenAI and Anthropic Face Challenges
Oriam AI Institute’s Role in Professional Education
Oriam AI Institute, based in Springfield, Missouri, specializes in publishing plain-English guides on AI and client-data rules for professional firms. Beyond tax preparers, its resources cover Missouri Informal Opinion 2024-11 for lawyers and the Missouri Insurance Data Security Act for insurance and title agencies. These guides are structured in short sections with self-check questions, making complex topics accessible. While some guides are paid, the IRC §7216 briefing is offered free of charge, reflecting the institute’s commitment to informing professionals about critical compliance issues. It is important to note that these guides provide general information and are not intended as legal, tax, or compliance advice.
For any CPA firm, enrolled agent, or tax preparer in Missouri, understanding the implications of AI on federal regulations like IRC §7216 is no longer optional. Oriam AI Institute provides a vital resource to help professionals remain compliant and protect their clients’ sensitive information. Access the free briefing today at institute.oriamai.online.
Frequently asked questions
What is Oriam AI Institute?
Oriam AI Institute is the education arm of Oriam AI, based in Springfield, Missouri. It publishes plain-English guides on AI and client-data rules for CPA firms, law firms, and insurance and title agencies.
What does the new IRC §7216 briefing cover?
The briefing explains that pasting a client's W-2 or K-1 into a public AI tool can be a disclosure under IRC §7216, a federal crime. It covers the rule, penalties, why regulation exceptions do not fit AI, what valid consent requires, and how on-premise systems keep returns inside an office.
Where can I read the IRC §7216 briefing?
The briefing, titled "IRC §7216 and AI: The Briefing for Missouri Tax Preparers," is free to read at https://go.oriamai.online/i/guides/irc-7216-ai-tax-preparers.?utm_source=site&utm_campaign=spotlight_oriam_institute
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