TPB’s message on AI: you can side-source tasks, not judgment

The Tax Practitioners Board (TPB) has emphasised the ongoing obligations that registered tax practitioners must comply with under the Code of Professional Conduct when using artificial intelligence (AI) in their practice.

Table of contents

• Competency is a human responsibility
• Confidentiality and client permission
• Embrace AI with eyes wide open
• A practical checklist for tax practices
• No substitute for professional judgement

Competency is a human responsibility

In new guidance¹, the TPB has reminded the profession that it is the human providing the service who still needs to be competent. This means the tax agent services must be provided competently, with the tax practitioner possessing, maintaining, developing and expanding their relevant tax knowledge, skills and experience. This is not a new obligation, but the guidance is a reminder of the importance of retaining these capabilities and implementing appropriate guardrails for the adoption of AI in providing tax agent services. The challenge for the tax practitioner is not whether tasks can be side-sourced to AI. Increasingly, they can. The challenge is ensuring critical thinking and professional judgment are not side-sourced along with them.

When using AI to provide tax agent services, the tax practitioner should consider the expected use of, or extent of reliance on, the output of the AI, and understand its abilities and limitations and the purposes for which it is being used. This includes ensuring entities providing services on a tax practitioner’s behalf, including employees, maintain the relevant knowledge and skills and are supervised appropriately. Importantly, firms should have in place documented processes to verify the accuracy and appropriateness of the AI output for the client’s circumstances before it is used in professional practice.

Responsible AI use also needs to operate within the practice’s existing governance arrangements. Tax practitioners must keep records that correctly document the tax agent services provided to clients. They must also maintain a system of quality management designed to provide reasonable confidence that the practice is complying with the Code, with documented and enforced policies and procedures.

Confidentiality and client permission

Another key obligation to consider around AI is confidentiality of client information. While also not a new obligation under the Code, with the adoption of AI, a tax practitioner must obtain a client’s permission to divulge client information to a third party (including to an AI model or tool, depending on how it is configured and used). This could be obtained via the client engagement letter or other signed consent. Client information includes any information relating to the affairs of that client, whether it belongs to the client or had been provided by the client to the tax practitioner. The TPB recommends that tax practitioners inform the client about the proposed disclosure of information, including noting to whom and where the disclosure will be made, where data will be stored and whether AI tools may be used. Because tax practitioners may handle TFN information, they will also have additional obligations to comply with under the Privacy (Tax File Number) Rule 2015.

A tax practitioner is therefore encouraged to perform their own due diligence, when selecting commercial or internally developed or modified AI tools for their practice. This includes ensuring security of information and privacy law requirements are met and seeking their own advice as appropriate. Tax practitioners should be considering:

• the nature of the activity to be performed by the AI
• how and where information is being stored and how it is being used by the AI
• the appropriateness of the AI for the particular task, the data inputs to the AI and decisions made by tax practitioners while using the AI.

Embrace AI with eyes wide open

The TPB does recognise the growing role of AI in the tax profession and is committed to supporting its responsible adoption.

“AI has the potential to increase productivity, drive efficiencies and enhance client service across the tax profession when used appropriately”, TPB Chair Peter de Cure said.

“We want to support tax practitioners in embracing the benefits of AI with confidence, while continuing to meet the high professional and ethical standards set out in the Code.”²

A failure to meet the standards in the Code may lead to TPB reviews and investigations with serious contraventions potentially leading to suspension or loss of registration.

A practical checklist for tax practices

Before using AI in providing a tax agent service, practitioners should consider the following questions:

1. Is this tool appropriate for the task? Understand what the tool can and cannot reliably do.
2. What information will be entered? Determine whether the information relates to a client’s affairs and whether using the tool would disclose that information to a third party.
3. Has the client given the necessary permission? Ensure the proposed disclosure and use of AI have been explained clearly and permission has been properly recorded.
4. Where will the information be stored and used? Review the tool’s security, privacy and data-handling arrangements.
5. How will the output be checked? Establish a review process that applies appropriate tax knowledge, client-specific analysis and professional judgement.
6. What records need to be retained? Document the use of AI, the review undertaken and relevant decisions as part of the practice’s record-keeping and quality management processes.
7. Is appropriate supervision in place? Ensure people and entities providing services on the practitioner’s behalf have the necessary knowledge and skills and are appropriately supervised.

No substitute for professional judgment

AI is a tool to support and assist tax practitioners, but it should not replace professional judgement, which relies on understanding of the law, evaluating the facts and applying these to the client’s circumstances. This is ultimately where a firm’s value lies. The tax practitioner remains accountable for the services they provide, including the accuracy of advice and must not rely on AI-generated outputs as a substitute for their own analysis or decisions.

CCH iKnowConnect AI is designed to support tax practitioners because it draws on expert-reviewed tax content, showing the source behind each answer so you can review it, while being backed by enterprise-grade privacy and security. Customer prompts, responses and client data are not used to train or fine tune the underlying AI models. Furthermore, extensive work has been completed to reduce the risk of hallucination in AI generated answers, reinforcing the trust factor. For tax practitioners, this is authoritative AI, built on decades of editorial integrity and expertise, not just algorithms.

Footnotes

¹ TPB(GS) 55/2026 The use of Artificial Intelligence and the Code of Professional Conduct
² TPB releases guidance on responsible AI use for tax practitioners, [media release], 22 July 2026, accessed 22 July 2026.