An accounting or tax firm can consider licensing the firm’s own records, but client tax return information is off-limits without each taxpayer’s written consent. Federal law makes it a crime for a return preparer to knowingly or recklessly disclose or use return information outside the permitted cases, with fines up to $1,000 and up to a year in prison (26 U.S.C. § 7216), and the regulations require written consent before any other disclosure or use (26 CFR 301.7216-3). The AICPA Code adds that a member in public practice “shall not disclose any confidential client information without the specific consent of the client.”

Records and how they are usually treated

Records Usually Why
Client tax returns, workpapers and return information Exclude § 7216 and the written-consent rule in § 301.7216-3
Client books kept on the firm’s systems Exclude AICPA confidential client information rule and client contracts
Engagement letters and client correspondence Exclude unless scrubbed and allowed by contract Confidential client information
Firm scheduling, workflow and project records Possible, after review Firm operations; remove client identifiers in narratives
The firm’s own accounting system Possible Nyne lists accounting systems (QuickBooks, Xero, NetSuite) among the data it licenses
Internal email and chat on operations, training, policies Possible, after review Scrub client specifics

Before you apply

  1. Map where client data lives. Tax software, document portals and client-books systems are usually separate from practice-management and internal tools.
  2. Keep tax software out of scope. It is the most direct route to return information.
  3. Read your engagement letters. Many restrict any use of client information.
  4. Ask a tax attorney to sign off on the scope, and write the exclusions into the licence.

Mode publishes a lower minimum for accounting firms (15 employees) than for most businesses; the table below lists every buyer’s rule, and the eligibility check routes your firm in two minutes.

Which buyers take this industry

From our routing table, which follows each buyer’s own published rules. Minimums are as each buyer states them; open the profile for the source and date.

Buyer and programIndustry ruleCompany minimumsOperating or closed
micro1: Enterprise Data PartnershipNo industry limit in the buyer’s published rules30+ full-time employees and substantial historical data; several years of records across systems is a stronger fit. No fixed minimum file count or size.Both. Operating companies apply to the Enterprise Data Partnership; companies no longer operating apply to the Defunct Company Data Partnership.
micro1: Defunct Company Data PartnershipNo industry limit in the buyer’s published rules30+ full-time employees and substantial historical data; several years of records across systems is a stronger fit. No fixed minimum file count or size.Both. Operating companies apply to the Enterprise Data Partnership; companies no longer operating apply to the Defunct Company Data Partnership.
Nyne: Company data licensingNo industry limit in the buyer’s published rules20+ full-time US W-2 employees and 3+ years in business, plus a decision maker who can approve the licenceOperating companies only
Mode: Company data partnershipNo industry limit in the buyer’s published rules10+ employees for legal; 15+ for accounting, medical and finance; 50+ for all other businesses. Several years of records you own make a stronger fit.Not stated. Mode says businesses and nonprofits can qualify.
Troveo: Business data licensingNo industry limit in the buyer’s published rulesNot statedNot stated

Check your firm’s eligibility

Questions people ask

Can we license client tax returns if names are removed?

Treat it as no. The consent rule in 26 CFR 301.7216-3 applies to disclosure or use of tax return information, and section 7216 makes a knowing or reckless disclosure a federal misdemeanor. Get advice from a tax attorney before any client data is part of a licence.

What about our own books and practice-management data?

The firm's own accounting, scheduling, workflow and internal communications are firm records. Review them for client details, then they can be part of a licence, subject to your client contracts.

Sources

  1. 26 U.S. Code § 7216: Disclosure or use of information by preparers of returns (Cornell LII)
  2. 26 CFR § 301.7216-3: Disclosure or use permitted only with the taxpayer's consent (Cornell LII)
  3. AICPA Code of Professional Conduct (PDF)
  4. Nyne: Sell company data