Not without each client's consent. IRC section 7216 makes it a crime for a tax return preparer to knowingly or recklessly disclose or use tax return information for any purpose other than preparing the return, unless a regulation permits it. Licensing return data to an AI company is not a listed purpose, so it needs a separate written consent from each taxpayer in the form Treasury Regulation 301.7216-3 requires, plus Revenue Procedure 2013-14 for individual clients. Firm procedures, close checklists, review-note patterns and templates that contain no client information are outside the rule.
- Tax return information includes anything furnished to prepare a return, not only the filed return.
- Consent must be a separate, signed document naming the recipient and the purpose.
- Start with firm-authored material: procedures, checklists, templates and training content.
What section 7216 says
Section 7216 of the Internal Revenue Code covers anyone in the business of preparing returns or providing services connected with return preparation. Knowingly or recklessly disclosing tax return information, or using it for anything other than preparing the return, is a misdemeanor unless a regulation permits it, with a fine of up to $1,000 and up to one year in prison, rising to $100,000 where the disclosure is connected with identity theft. Section 6713 adds a civil penalty of $250 per disclosure, up to $10,000 a year, rising to $1,000 per disclosure and $50,000 a year in identity-theft cases.
Tax return information is broad: it covers information furnished in any form or manner for, or in connection with, preparing a return, including information the preparer derives from it.
Source: 26 U.S.C. 7216 (disclosure or use of information by preparers of returns)
How consent works
Treasury Regulation 301.7216-3 sets the consent rules:
- A separate written document, signed and dated by the taxpayer.
- It names the recipient and describes the information and the purpose.
- For individual (Form 1040-series) clients, it follows the format and mandatory statements in Revenue Procedure 2013-14.
- Consents that allow disclosure outside the United States have extra conditions.
- A taxpayer can refuse; the engagement cannot depend on agreeing.
Source: eCFR: 26 CFR 301.7216-3 (disclosure or use permitted only with consent)
What an accounting firm can realistically license
AI buyers who want accounting records mostly want to see how the work is done, which often does not need client data.
| Record | Section 7216 position |
|---|---|
| Firm procedures and work instructions | Outside the rule if they contain no client information |
| Close, review and engagement checklists | Outside the rule as blank templates |
| Review notes and workpapers | Tax return information if tied to a return; consent needed |
| De-identified tax returns or statistical compilations | Consent needed; the regulations bar selling compilations for value |
| Bookkeeping records not used for returns | May fall outside 7216; contracts and privacy law still apply |
Other rules that apply alongside 7216
- AICPA Code of Professional Conduct: confidential client information needs client consent to disclose.
- State boards of accountancy have their own confidentiality rules.
- The FTC Safeguards Rule under GLBA applies to many tax preparers as financial institutions.
- Outside the US, professional codes such as ICAEW's and privacy laws such as UK GDPR apply; see the UK accounting guide.
Next step
For the wider picture, see data licensing for accounting firms and selling your practice.
Origin Data Partners is independent and is not affiliated with any AI data buyer. We help owners compare buyers and find the best fit for their records. See what your data is worth.
Common questions
Can an accounting firm sell client tax data to AI companies?
Not without consent. IRC 7216 bars preparers from disclosing or using tax return information for purposes other than preparing the return unless a regulation permits it. A license to an AI company needs each client's separate written consent in the required form.
Does anonymizing tax returns avoid section 7216?
No. The regulations let a preparer use anonymous statistical compilations inside its own tax business, but they expressly bar selling or exchanging them for value, except when the practice itself is sold. Licensing de-identified return data to an AI company needs each client's consent.
What does a section 7216 consent need to include?
It must be a separate document signed by the taxpayer, identify who receives the information and for what purpose, and, for individual (Form 1040-series) clients, follow the format in Revenue Procedure 2013-14. Consents to disclose outside the United States have additional requirements.
What can an accounting firm license without client consent?
Material that contains no tax return information: firm procedures, close and review checklists, templates, training content and descriptions of how work is done. These are also the records AI buyers most often ask accounting firms for.
Does section 7216 apply to bookkeeping-only firms?
Section 7216 applies to people who prepare returns or provide services in connection with return preparation. Bookkeeping that is not connected to a return may fall outside it, but client contracts, state accountancy rules and privacy laws still apply. Check with an adviser.
Sources and further reading
Origin Data Partners is independent and not affiliated with any buyer named on this page.