TPB releases draft guidance on use of AI by tax practitioners

The TPB said while AI tools are useful and can deliver significant benefits, tax practitioners are still ultimately responsible for the tax agent services they provide to their clients.

"It is important for tax practitioners to understand the capabilities and limitations of AI tools, and ensure AI outputs are assessed and supplemented by professional judgement," the information sheet said.

When using AI in providing tax agent services, the TPB said tax practitioners should consider the nature of the activity to be performed by the AI, how information is stored and accessed, the expected use or extent of reliance on the AI's output, and the AI's capabilities and competency.

Practitioners should also consider the processes in place for the tax practitioner to review the output of the AI tools before the output is used in the professional practice, and the appropriateness of the data inputs to the AI tool and decisions made by tax practitioners while using the AI tool.

The draft information sheet said that when using AI in providing tax agent services, tax practitioners remain accountable for the accuracy of the information and advice they provide to their clients, ensuring services are provided to a competent standard.

"AI models, particularly large language models, can have complexity that is hard to interpret and understand and can be biased as AI cannot understand human psychology or other external factors that may be relevant," the information sheet said.

"Therefore, to comply with the competency requirements in the Code and Determination, tax practitioners must exercise their own professional judgement when advising clients and should not rely on AI output as a substitute for their own analysis of a client’s circumstances."

The TPB said tax practitioners should also be mindful of their obligations under Code item 6 when using AI, which provides that a tax practitioner must not disclose any information relating to a client’s affairs to a third party without the client’s permission, unless there is a legal duty to do so.

TPB chair Peter de Cure said the board was committed to supporting innovation in the tax profession.

"We recognise the significant opportunities AI can bring to improving productivity, efficiency and client service across the tax profession," de Cure said.

"Our aim is to help tax practitioners embrace the benefits of AI with confidence; while continuing to meet the high professional and ethical standards set out in the Code."

Recognising the rapid evolution and growing capability of AI technologies, the TPB emphasised that the exposure draft was not intended to be a definitive or technical guide on AI systems.

"Instead, it focuses on helping tax practitioners understand how their existing statutory obligations apply when AI tools are incorporated into the provision of tax agent services," the TPB said.

The TPB said the draft guidance reflects its balanced approach to AI.

"We want to encourage adoption of emerging technologies but also provide clear guardrails to ensure these tools are used responsibly by tax practitioners, complying with their obligations," said de Cure.

The TPB has invited comments and submissions in relation to the draft information sheet. The closing date for submissions is 21 April 2026.