[Return to Blog](https://www.alfi.org/blog/) Source: [TaxNotes.com](https://www.taxnotes.com/tax-notes-today-federal/professional-responsibility/irs-guidance-ai-needs-reworking-former-officials-say/2026/09/24/7wq37)** Written by: Ben Valdez IRS guidance telling tax professionals to convey cost savings related to artificial intelligence to clients oversimplifies the process of implementing the technology, according to two former officials. The IRS Office of Professional Responsibility has cautioned that tax professionals should “fairly credit to the client’s account any cost reductions” associated with the use of generative AI to avoid clashing with Circular 230 rules limiting excess fees in tax return preparation. While likely well-intentioned, that guidance oversimplifies the billing processes across firms of various sizes, former OPR Director Sharyn Fisk said during a September 23 webinar hosted by the Accounting, Legal & Finance Institute. “It’s not taking into consideration the costs of the AI system itself, and how those firms can be compensated for that expense,” Fisk said of the June 24 alert, dubbed “Introductory Guidelines for Responsible AI Use in Federal Tax Practice.” The guidance also offered AI use recommendations relating to the competence and due diligence provisions of Circular 230, urging professionals to thoroughly review all AI-created documents and verify the accuracy of AI outputs.   Cost Concerns ** The fees recommendation has become a focal point of criticism from tax professionals.  Earlier this month, the American Institute of CPAs said it sought clarification from the IRS over the guidelines, arguing that they don’t consider a value pricing model and neglect an array of other expenses that come with AI adoption.  Terry Lemons of Frost Law, former chief of communications at the IRS, said that tax professionals have highlighted up-front costs associated with learning about AI systems and adequately training employees on using them. “My prediction is you’re going to see some modification of this from the IRS at some point,” Lemons said. Fisk, now a professor at California State Polytechnic University, pointed out that the OPR can modify or update alerts based on stakeholder feedback. She added that the office “nailed” the competency recommendations for using AI. In June the IRS combined the OPR with the agency’s Return Preparer Office into a new unit called the Tax Professional Management Office. Fisk left the IRS in January. Tax professional organizations have ramped up their efforts to better understand the risks of using AI. On September 22 the AICPA and former IRS Commissioner Daniel Werfel announced the formation of a new council aimed at advancing the practical use of AI. 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