Key takeaways
- AI DLP for a CPA firm combines sensitivity labels, browser or endpoint DLP and a Purview DLP policy for Copilot to keep client files away from unapproved AI.
- Section 7216 regulations define disclosure as making tax return information known to any person in any manner whatever, which can include an AI service.
- The FTC Safeguards Rule names tax preparation firms as financial institutions and requires oversight of service providers, including contract terms.
- AICPA ET 1.700.040 requires a confidentiality contract with reasonable assurance, or specific client consent, before sharing client information with a service provider.
- Microsoft documents that Purview DLP can stop Microsoft 365 Copilot from using files and emails that carry chosen sensitivity labels.
- Mailbox add-ins and browser extensions with AI features can read attachments, so app consent and extension control belong on the checklist.
Why are portals and email attachments the new AI exposure?
AI now reaches client tax documents through the tools that already hold them: portal summaries of uploaded files, inbox assistants, attachment previews, mailbox add-ins and browser extensions. Any of these can send a W-2 or a brokerage statement to an AI service with one click, or with none.
Most firms have a policy against pasting returns into public AI tools. Fewer have looked at the AI features that switched on inside software they already pay for. The portal and the inbox are where client tax documents arrive in volume, so that is where a single unreviewed feature does the most damage.
Which rules apply when an AI feature reads a client document?
Three sets of rules apply: Section 7216 on tax return information, the FTC Safeguards Rule, and the AICPA confidentiality rule. First, Internal Revenue Code Section 7216 and its regulations define disclosure as making tax return information known to any person in any manner whatever. Knowing or reckless disclosure is a misdemeanor punishable by up to one year in prison and a $1,000 fine, and Section 6713 adds a civil penalty of $250 per disclosure, capped at $10,000 per calendar year. The regulations permit some disclosures to software contractors, only to the extent necessary, and require written taxpayer consent for other uses. Whether a given AI feature fits an exception is a question for your tax counsel.
Second, the FTC Safeguards Rule lists tax preparation firms as financial institutions. 16 CFR 314.4 requires a written risk assessment, an inventory of data and systems, access controls, and oversight of service providers, including contract terms that require them to safeguard customer information and periodic assessment of their safeguards. An AI feature in your portal or email platform is part of a service provider relationship.
Third, AICPA ET section 1.700.040 says that before a member discloses confidential client information to a third-party service provider, the member either has a contract requiring confidentiality plus reasonable assurance that the provider has appropriate procedures, or gets specific consent from the client.
How do you find the AI already inside your portal and email?
Ask each vendor in writing and check the admin settings yourself. Release notes rarely make AI features obvious, and some are enabled by default. Work through this list:
- Client portal. Does it summarize, classify or extract data from uploaded documents? Which AI provider does that work, where is the data processed, how long is it kept, and is it used to train models? Can the feature be turned off for the whole firm?
- Email platform. Which AI assistants can read mail and attachments, and which licenses turn them on? In Microsoft 365, note who has Copilot and what it can reach.
- Mailbox add-ins and connected apps. Review which third-party apps staff have granted access to their mailbox or files. AI writing and scheduling tools often ask for exactly that.
- Browsers. List installed extensions with AI features. An extension that can read the page can read the portal screen a preparer has open.
Record each answer in your Safeguards Rule inventory and risk assessment, and in your written information security plan. Our FTC Safeguards Rule checklist for tax preparers covers the rest of that program.
Which AI DLP controls keep attachments away from unapproved AI?
Turn off the AI features you have not approved, then use AI DLP controls to enforce the rest. The practical set for most firms:
- Disable vendor AI features you have not reviewed. Use the firm-wide admin switch where one exists, and confirm it survives updates.
- Require admin approval for app access. Stop staff from granting new third-party apps access to mail and files on their own, and route requests to whoever owns the Safeguards Rule program.
- Label client documents. Apply a sensitivity label to client tax files and to mail that carries them. Microsoft documents that a Purview DLP policy for Microsoft 365 Copilot can prevent Copilot from using labeled files and emails when it generates responses. The control only covers items that carry the label, so automatic labeling matters.
- Block uploads at the browser. Use endpoint or browser DLP to stop files containing Social Security numbers, EINs or bank account numbers from being uploaded or pasted into AI sites that are not on your approved list.
- Control extensions. Allow only approved browser extensions on firm devices.
- Keep documents in the portal. Ask clients to upload rather than email, discourage staff from downloading portal files to desktops where other tools can reach them, and clear old files out of the portal on a schedule.
What if you want to use an AI feature your vendor offers?
You can, once the paperwork is in place. Get the vendor's terms on data use, retention, subprocessors and model training in writing. Confirm the contract requires the vendor to safeguard client information, as the Safeguards Rule and the AICPA rule expect. Have counsel decide whether the use fits a Section 7216 exception or needs written client consent. Then turn the feature on for the people who need it, log the decision, and set a date to review it again. Our guide to evaluating AI tax software add-ons covers the vendor questions in detail.
What should you do this quarter?
Work through these six steps before the 2027 filing season fills the portal:
- Send a short AI questionnaire to your portal, email and tax software vendors.
- Turn off any AI feature that has not been reviewed.
- Review connected apps and browser extensions, and remove the ones you cannot justify.
- Publish a client document label and set automatic labeling for tax forms.
- Turn on DLP for Copilot and for browser uploads, starting in audit mode, then enforce.
- Update your written information security plan and risk assessment with what you found.
How does s90 help?
s90 works with CPA firms on the controls in this checklist: finding AI features and connected apps across your portal, email and browsers, setting AI guardrails and DLP so client documents stay where they belong, and keeping your written information security plan current with the evidence. If you want help working through the list before the season starts, we are happy to talk.
