Client Consent Template (IRC Section 7216)

Last updated: July 2026

Purpose: This is a starting-point template for tax and accounting firms that want to obtain client consent covering the firm's use of AI tooling through Proxara Connect. It contains a client letter and a shorter engagement-letter clause, with placeholders the firm completes.

This template requires review by the firm's own counsel before any use.

Section 7216 of the Internal Revenue Code and its regulations restrict how a tax return preparer may use or disclose tax return information, and the IRS prescribes specific format, content, and mandatory-language requirements for valid consents, which vary by context and change over time. This template is not legal advice, is not a prescribed IRS consent format, and does not by itself satisfy Section 7216 or any other law. The firm's counsel decides whether consent is required for the firm's intended use, and conforms any consent to the format the regulations require. Proxara does not provide legal advice.

Proxara's role: Proxara provides this template so the description of the technology in the firm's consent is accurate. Proxara enforces the firm's counsel-approved policy and narrows disclosure; it does not determine the firm's legal obligations or make the firm compliant with them.

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Before adapting the template: what is factually true

A consent should describe what actually happens. With Proxara Connect in place, the accurate description is:

• The firm's AI assistant works through a protective layer that runs in the firm's own dedicated environment.
• Before anything reaches the AI service, that layer replaces identifying details (names, identification numbers, account references, and similar protected references) with neutral stand-ins. The same client resolves to the same stand-in, so the work stays coherent.
• The AI service receives the working substance of the task with stand-ins in place of the identifying details. The link between a stand-in and the real identity stays inside the firm's environment.
• For categories of information the firm designates, the firm's policy keeps the substance inside the firm's environment entirely and the AI service receives only a status (a private mode).
• The firm keeps a record of what was requested, what was replaced, and what was disclosed.

Two accuracy cautions for the drafter. First, do not describe the stand-in replacement as making information non-identifiable in all cases: substance that is sufficiently unique can be identifying on its own, which is what the private mode exists for. Second, do not describe the protection as covering AI use outside the firm's connected path (for example, text an employee types directly into a personal AI account); the consent should describe the firm's sanctioned workflow.

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Template: client consent letter

[Firm letterhead]

Consent to Use and Disclosure of Tax Return Information

Federal law requires this consent form be provided to you. Unless authorized by law, we cannot use or disclose your tax return information for purposes other than the preparation and filing of your tax return without your consent.

What we are asking. [Firm name] uses modern AI tools to prepare, research, and review client work more efficiently. We are asking for your consent to use your tax return information in that workflow, in the protected form described below.

How the protection works. Our AI tools operate through a protective layer that runs in our firm's own environment. Before any information reaches an AI service, that layer replaces identifying details, such as names, identification numbers, and account references, with neutral placeholders. The AI service works with the substance of the task using those placeholders, and the link between a placeholder and your identity remains inside our firm's environment. For [describe the categories the firm's policy holds back, for example: categories of information we designate as especially sensitive], our policy keeps the information inside our environment entirely.

Information covered. [Describe the tax return information covered by this consent.]

Purpose. [Describe the purpose, for example: preparation and review of your returns and related advisory work for you.]

Recipients. [Identify the AI service or category of service providers involved, as counsel directs.]

Duration. This consent is effective for [duration; specify as counsel directs].

Your choice. You are not required to sign this consent. If we do not receive it, [describe the firm's alternative, for example: we will prepare your work without the AI-assisted workflow].

If you believe your tax return information has been disclosed or used improperly in a manner unauthorized by law or without your permission, you may contact the Treasury Inspector General for Tax Administration (TIGTA) by telephone at 1-800-366-4484, or by email at complaints@tigta.treas.gov.

Signature: _______________________________

Name: _______________________________

Date: _______________________________

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Template: engagement-letter clause

AI-assisted work. In performing our services, we may use AI tools operated through a protective layer in our firm's own environment. Before information reaches an AI service, identifying details are replaced with neutral placeholders, and the link between a placeholder and your identity remains inside our firm's environment; categories of information we designate as especially sensitive are kept inside our environment entirely. Where the law requires your specific consent for a use or disclosure of tax return information, we will request it separately in the required form.

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Reminders for the firm

• Counsel conforms the consent to the IRS-prescribed format applicable to the firm's situation, including any mandatory language, and decides where a consent is required at all.
• The description of the technology in the consent should be kept accurate as the firm's configuration changes, for example if the firm enables or disables the private mode for particular categories.
• The firm's own record of policy decisions and disclosures, available in the firm's console, is the evidence behind the description above.

For questions about the technology described in this template: support@proxara.ai. For the firm's legal obligations: the firm's counsel.