IRC § 7216
No client-by-client consent campaign.
No external model receives the return.
In Proxara's private VPC deployment in AWS or Azure, the firm's own model processes the client's return inside the firm-controlled environment. The model is not trained or fine-tuned on the return, retains no cross-session context, and does not send the return to an external model API.
The mapping between the two never leaves the building.
The systems a tax practice already runs
What the regulation actually governs
Disclosure
Tax return information reaching a separate legal entity. Transmission to a vendor is the act the rule turns on, whether or not the vendor is careful with it.
§ 301.7216-1 · § 6713Use
What the information is used for, even when it never leaves the building. Purpose is governed separately from transmission, and consent turns on purpose.
§ 301.7216-2 · § 301.7216-3Indirect identification
Enough detail attached to one persistent handle and the taxpayer is identified anyway. Three ordinary clues can be enough to name a client nobody named.
§ 301.7216-1(b)(3)(i)(B)Where Proxara sits relative to that line
Three behaviours, each one a thing the system does rather than a claim about it.
Four claims released. Two the policy could not account for, so they were not built into the payload.
The payload is assembled from claims the firm’s policy authorized, not carved out of a finished document. A redactor removes what it recognizes; a compiler emits only what it can account for.
- The external model receives no client names, no identifiers, and no return figures
- The mapping between stand-ins and real values never leaves the firm’s environment
- If the system cannot account for part of the context, that part never leaves
Elsewhere the site treats identity continuity as a feature. In tax, continuity across tasks is a liability, so the stand-in is bound to one piece of work and then discarded.
- A new random token for each task, so nothing correlates across sessions
- Hyper-unique indirect identifiers are generalized before they leave
- Mappings are wiped when the task completes, including across sub-agents
Rehydration happens inside the firm. The model proposes actions using opaque references; the firm’s own environment resolves the real client, recipient, and record before anything is written.
- Real names appear in a local view the model structurally cannot read
- Anything that modifies a record or sends to a client waits for a person
- Every piece of work leaves a record of what was consulted and released
What a local model may do without a single consent form
Treas. Reg. § 301.7216-2(c) permits internal use that directly advances, assists, or completes the client's own return.
Box 1 ordinary income $184,200
Data into the return
Figures out of documents and into the fields that hold them
- Extract unstructured figures from K-1s, 1099s, and bank statements
- Map them to the fields the tax software expects
- Flag what arrived without a matching schedule
14 sources
Memoranda and workpapers
The writing around a return, drafted from the file itself
- Summarize a complex client file into a working memorandum
- Generate intake notes from what the engagement already holds
- Organize supporting workpapers against the return they support
Diagnostics and notices
Checks before the return goes out, and answers after
- Run diagnostic passes for missing schedules and discrepancies
- Research applicable statute against the client’s own asset ledger
- Draft the response to a CP2000 from the notice and the file
From approval to private VPC deployment
Firm-controlled private VPC infrastructure, from approval to live tax work
1 · Select
Set the client, tax purpose, work scope and firm policy before any return data is opened.
2 · Contain
Run the firm’s own local model inside the firm-controlled environment; no external model API receives the return.
3 · Isolate
No cross-session learning, fine-tuning, contractor access or cross-client context.
4 · Record
Keep local mappings and work records inside the firm’s environment for the completed tax work.
One private VPC, one client work item, one firm-controlled record.
What the firm can show an examiner
Every piece of work: what was consulted, what was released, under which policy, and what was confirmed in the source system.
The AI chapter of the WISP: approved tools, named users, and what left the boundary. Form W-12 asks every preparer to attest to a plan.
Circular 230 due diligence: AI-assisted work attributable to a named person who reviewed it.
AICPA ET 1.700: the third-party service provider step, documented rather than assumed.
Where does the return actually go?
Does a local model transmit anything? In the firm-controlled VPC, the model processes the work inside the firm’s infrastructure. Nothing reaches a separate legal entity.
Where does the return actually go?
Does a local model transmit anything? In the firm-controlled VPC, the model processes the work inside the firm’s infrastructure. Nothing reaches a separate legal entity.
Review the architecture with your team
The § 7216 position is the firm's to take. Proxara supplies the mechanism and the record it produces, in writing, so the review is about facts rather than assurances.
A written description of what crosses the boundary and what does not
The policy each payload was assembled under
The record every piece of work leaves behind
Proxara does not provide tax or legal advice. Firms should confirm the treatment of their own workflows with their own tax and legal advisers.