--- title: "KYE™ Tax Governance Pack™ — AI tax-position governance authority · KYE™ Sector Pack Foundry™ · KYE Protocol™" description: "The KYE™ Tax Governance Pack™ governs AI-generated tax positions, filings, and advice at the action boundary — the moment a position moves toward being filed, advised, or booked. Every consequential action is bound to a named preparer's authority, due-diligenced before the action, held advisory pending sign-off, and replay-provable. KYE™ governs whether the position may proceed; it does not compute tax, determine the correct treatment, or judge whether a position is correct." url: https://kyeprotocol.com/foundry/tax-governance-pack/ lang: en source: "KYE Protocol" --- > The KYE™ Tax Governance Pack™ governs AI-generated tax positions, filings, and advice at the action boundary — the moment a position moves toward being filed, advised, or booked. Every consequential action is bound to a named preparer's authority, due-diligenced before the action, held advisory pending sign-off, and replay-provable. KYE™ governs whether the position may proceed; it does not compute tax, determine the correct treatment, or judge whether a position is correct. KYE™ Sector Pack Foundry™ # KYE™ Tax Governance Pack™ for AI-generated tax positions & filings. When an AI agent drafts a tax position, a return entry, a transfer-pricing determination, or an advisory memo and that position starts to move toward being filed with a tax authority, advised to a client, or booked as a financial-statement reserve, the consequential moment has arrived. The KYE™ Tax Governance Pack™ governs that action boundary: it binds every consequential action to a named preparer's authority, records the preparer's due diligence before the action, holds the position advisory until a named signing professional signs off, and seals it into a replay-provable provenance record. KYE Protocol™ governs **whether the position may proceed** — it does not compute tax, determine the correct tax treatment, or judge whether a position is correct. [Apply via the Foundry](https://kyeprotocol.com/sector-pack-foundry/apply/) See how it works Why AI tax needs this The wedge ## AI now drafts tax positions — and the action boundary is where professional liability concentrates. Generative tax assistants, return-prep copilots, transfer-pricing engines, and advisory drafting tools are producing positions that move quickly toward filing, advice, and the financial statements. The high-value problem is not the computation — it is the action boundary. Three facts converge: - **The consequential moment is the filing, not the draft.** A position in a model's output is inert; a position filed with a tax authority, advised to a client, or booked as a reserve is consequential. Professional standards and penalties attach at the moment a position proceeds — exactly where governance is weakest. - **The standards already exist; the enforcement of authority does not.** IRS Circular 230's due-diligence and competence standards, the AICPA SSTS, OECD Pillar Two's GloBE rules, EU DAC6's mandatory disclosure of reportable arrangements, UK MTD's digital record-keeping, and SOX §404's tax-provision controls define what is required. KYE Protocol™ governs whether an AI-generated position may proceed under those standards, under whose authority, with due diligence recorded before the action. - **Provenance is now an audit expectation.** A tax-provision figure booked under SOX §404, an MTD figure with an unbroken digital link, and a Pillar Two GIR datapoint must each carry documented data integrity and lineage. KYE Protocol™ produces a signed, replay-derivable provenance pin at the moment the action commits. - **This is a governance wedge, not a tax engine.** KYE Protocol™ does not compete with the tax-calculation tools. It governs the action boundary they feed — the named-preparer authority + due-diligence + provenance layer the AI tax ecosystem currently lacks. Why a tax / controls owner buys this ## Survives an examiner or SOX spot check — due-diligenced, signed-off, and derivable from public keys alone. - **Due-diligenced by construction.** An AI-generated position that moves toward a filing, advice, or booking must carry a recorded preparer due-diligence result — competence (Circular 230.35), reasonable-basis / substantial-authority (Circular 230.34 / SSTS No. 1), and a reportable-arrangement screen (DAC6 hallmarks + main-benefit test) where applicable. An unscreened, low-confidence, or undisclosed reportable position is refused at the action-admissibility gate. - **Sign-off-gated.** A position stays advisory until a named preparer-of-record, engagement partner, or designated responsible tax officer records sign-off. Unreviewed AI-driven consequential actions are refused and routed dual-channel. - **Authority-bound.** Every consequential action maps to a recorded named-preparer authority decision — the agent, the position artefact, the intended action, and the named professional under whose authority it proceeds. An AI authorised for one purpose cannot proceed under another. - **Replay-provable provenance.** A signed provenance pin binds the model and version, the inputs and pinned source authorities, the due-diligence result, and the authority outcome — audit-grade data integrity a SOX reviewer, an HMRC examiner, or a tax authority can verify offline, against published keys alone, satisfying UK MTD digital links and OECD Pillar Two GIR lineage. - **Framework-anchored.** IRS Circular 230, OECD Pillar Two, EU DAC, UK MTD, SOX §404, and AICPA SSTS each map to a control row — with a 90-day attestation cadence. How it works ## Every consequential tax action — authority-bound at the action boundary. One coherent spine governs three specializations — return-prep, transfer-pricing, and advisory-memo — with no parallel packs. Each AI-generated position that moves toward a consequential action flows through the same four rules, on the canonical KYE Protocol™ envelopes. 1. **1 — Position proposed.** An AI agent produces a tax position, return entry, transfer-pricing determination, or advisory memo that begins to move toward filing, advice, or a booked reserve. 2. **2 — Due diligence + authority check.** The Action Admissibility™ Gate verifies a recorded preparer due-diligence result (competence + reasonable-basis + reportable-arrangement screen) and the named-preparer authority under which the position proceeds, under the §25 Edge Governance Safety Floor. No due diligence, no authority = no action. 3. **3 — Advisory pending sign-off.** The position is advisory until a named preparer-of-record, engagement partner, or responsible tax officer records sign-off. Low-confidence or unreviewed positions are refused and routed dual-channel. 4. **4 — Provenance pin sealed.** The runtime emits kye.purpose.request.v1 + kye.purpose.admissibility.v1 + kye.evidence.decision\_map.v1 + kye.evidence.pack.v1 in lockstep, binding the model and version, the pinned source authorities, the named signing professional, and the Authority Finality™ outcome — signed and replay-derivable for a SOX, examiner, or tax-authority spot check. Framework binding ## Bound to the AI tax authority + due-diligence + provenance perimeter. The pack binds the canonical KYE™ artefact set to the tax professional-standards perimeter. Every claim resolves to a control row on the bound framework — the six regulations are consumed by the rule pack, never re-mapped. | Framework | Control area | Pack coverage | | --- | --- | --- | | IRS Circular 230 | Preparer due diligence, competence, return positions, written advice, sign-off | partial | | OECD Pillar Two | GloBE effective-tax-rate, top-up tax, GIR data lineage, scope / charging rule | partial | | EU DAC (DAC6 / DAC7) | Reportable cross-border arrangements, hallmarks, main-benefit test, platform reporting | partial | | UK MTD | Digital record-keeping, unbroken digital links, API filing integrity | partial | | SOX §404 | ICFR over the tax provision, management review controls, documentation & data integrity | partial | | AICPA SSTS | Reasonable basis, disclosure, reasonable inquiry, form & content of advice | partial | **Honest scope.** KYE Protocol™ governs the authority, due diligence, sign-off, and provenance of the AI instruction at the action boundary — whether the position may proceed. It does not compute tax, determine the correct tax treatment, run the tax engine, or judge whether a position is correct. Partial coverage means the bound surface satisfies the control area when paired with the firm’s own tax analysis and attestation. Apply via the Foundry ## Qualified AI tax partners — apply through the Foundry. The KYE™ Tax Governance Pack™ is a §68 sector product productised through the KYE™ Sector Pack Foundry™ Build tier; commercial distribution is value-based, qualification-gated, and disclosed under NDA to qualified applicants. [Apply via the Foundry](https://kyeprotocol.com/sector-pack-foundry/apply/) [See the three Foundry tiers](https://kyeprotocol.com/sector-pack-foundry/) [Bound regulatory frameworks](https://kyeprotocol.com/frameworks/) Canonical KYE™ surfaces referenced on this page: [Evidence Pack™](https://kyeprotocol.com/evidence-pack/) · [KYE Protocol™](https://kyeprotocol.com/).