Advances in generative AI have brought advanced tools to tax & legal practice, but with them comes AI hallucinations, which are fabricated citations, quotes, or facts that appear plausible but are entirely false. In 2023, a notable U.S. case (Mata v. Avianca) revealed this risk when attorneys, relying on ChatGPT for research, submitted a brief containing fictitious case law and were sanctioned as a result. This incident revealed substantial risks for the tax & legal profession. Increased AI use in tax & legal submissions and decision drafting subsequently led to numerous similar global incidents. By late 2025, a collection of various datasets logged nearly 800 cases of AI-related citation errors or hallucinations” in at least 25 countries, with a marked increase in 2025 alone. These cases span court filings by lawyers and pro se litigants, as well as orders drafted by judges or tribunals. This development necessitates an examination of professional responsibility and procedural fairness concerning AI-generated falsehoods. This article analyzes how courts and administrative bodies across jurisdictions have responded to AI-generated hallucinations in tax & legal submissions and decisions, and what these responses indicate regarding emerging verification standards under existing law. The analysis compares incidents from the United States, Canada, the United Kingdom, India, Israel, and other jurisdictions, focusing on the imposition or withholding of sanctions, the treatment of various actors (e.g., lawyers, self-represented parties, experts, judges), and the adaptation of tax & legal doctrines to this challenge.