Tax and accounting firms · AI and the Safeguards Rule · updated

PTIN renewal 2027 and your security plan

Every paid preparer renews a PTIN each autumn, and Form W-12 line 11 asks you to confirm you are aware preparers are “required by law to create and maintain a written information security plan” (Form W-12 (Rev. October 2025), line 11) (read 9 October 2026). It asks whether you know, not whether you have one. The plan itself is the Safeguards Rule's, and since June 2026 the IRS's own guidance asks preparers to document their AI use too.

The renewal

What the plan has to cover

IRS Publication 5708 is the IRS's free template (Pub 5708). It lists what the FTC requires of each firm: a Qualified Individual, a risk assessment, safeguards that are monitored and tested, service providers held to safeguards by contract, multi-factor authentication, and a plan that is kept up to date. Its sample says this about logs:

Event logging on, and reviewed at least every 90 days (the IRS sample plan)

“Event Logging will remain enabled on all systems containing PII. Review of event logs by the DSC or IT partner will be scheduled at random intervals not to exceed 90 days.”

IRS Publication 5708 (Rev. 8-2024), sample WISP, page 10

Applies a sample template, not a rule; the plan itself is required by the Safeguards Rule.

Where AI goes in it

Pub 5708 was revised in August 2024 and does not mention AI. If staff use Claude, ChatGPT or Copilot on client files, the plan needs a section that says which tools are allowed and on which plans, where each one's activity log is, who reviews it, and how AI output is checked before use.

Monitor and log what authorized users do

“Implement policies, procedures, and controls designed to monitor and log the activity of authorized users and detect unauthorized access or use of, or tampering with, customer information”

16 CFR 314.4(c)(8)

Applies since 9 June 2023 (87 FR 71509); 16 CFR 314.6 exempts firms with fewer than 5,000 consumers from 314.4(b)(1), (d)(2), (h) and (i), not from (c)(8).

Document AI use and how its output is verified

“Document AI usage and verification processes.”

IRS OPR Alert 2026-19, Best Practices for Responsible AI Use

Applies since 24 June 2026; guidance on Circular 230, which it does not amend.

Build that section in your browser: it is dated, maps each line to the rule it answers, and lists what each AI tool logs.

Keep the log on your own computer, free

$ npx --allow-remote=root https://agentwares.vercel.app/dl/safeguards-log-0.2.0.tgz add cowork-otel.jsonl purview-audit-export.csv
$ npx --allow-remote=root https://agentwares.vercel.app/dl/safeguards-log-0.2.0.tgz report --from 2026-07-01 --to 2026-09-30

safeguards-log reads the exports your AI tools already give you (Cowork and Claude Code OpenTelemetry, the Claude Enterprise audit log and Compliance API, ChatGPT Enterprise's Compliance Logs, Purview's Copilot audit, agentreceipt), keeps one hash-chained log of who did what and when, without the words, and writes the period's report as Markdown, PDF and CSV with a SHA-256 commitment. Runs on your computer: no account, no upload, no AI. Also a local MCP server: the same command with mcp.

A signed annual AI-activity report

A signed annual AI-activity report adds a dated Ed25519 signature over the SHA-256 commitment this tool prints, so a reviewer can check the report was not changed after it was signed, and when it was signed. Only the commitment is sent to be signed: your log and report never leave your computer. The report itself is complete without it.

One purchase for each year's report, with no account; the report command prints the link for your report's commitment.

A signed report

okgate as your firm's OpenTelemetry collector is not built

okgate as your firm's OpenTelemetry collector: a hash-chained log of every agent action on client files, per preparer, without running a collector yourself. It would hold your firm's telemetry, which raises the question of tax return information (IRC 7216) that this local tool avoids, so it is not built until that is settled.

Until it is, the free tool above keeps the same log on your own computer, from a collector you run.

I want the hosted collector

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