Can an Accounting Firm Sell Its Data for AI? Section 7216 Explained

An accounting firm can’t license its clients’ tax or financial data to train AI. Three sets of rules stand in the way. Section 7216 of the Internal Revenue Code covers tax return information. The AICPA’s confidentiality rule covers CPAs in public practice. Federal financial privacy rules can treat tax preparers and accountants as financial institutions. What a firm can consider licensing is data about running the firm: methodology written in-house, workflow and review checklists, training, operations and IT.

This guide explains each rule, why anonymizing client data doesn’t get around them, and what’s realistically in scope. It’s general information, not legal advice. Have counsel review the scope for your firm.

Section 7216: tax return information

Section 7216 applies to anyone in the business of preparing tax returns, or preparing them for pay. A preparer who “knowingly or recklessly” discloses tax return information, or uses it for anything other than preparing the return, commits a misdemeanor. The penalty is a fine of up to $1,000, up to a year in prison, or both (26 U.S.C. § 7216).

“Tax return information” is broad. The Treasury regulations define it as any information furnished in connection with preparing a return. That includes the client’s name, address and identifying number, information from third parties, and information the preparer derives from it, even if it never appears on the return (26 CFR § 301.7216-1). Workpapers, client emails about a return and organizer files are all likely to be in it.

Consent is possible in principle but strict in practice. It must be written, signed and dated by the taxpayer, given before the disclosure, and it must name the purpose, the recipient and the information covered (26 CFR § 301.7216-3). Collecting that from every client for an AI license isn’t realistic for most firms.

Why anonymizing doesn’t fix it

The regulations address anonymized data specifically. A preparer may use tax return information to build a statistical compilation for limited purposes, such as supporting its own tax business or bona fide research. It may disclose one only if the compilation is anonymous and doesn’t report figures drawn from fewer than ten returns. The regulations then say a preparer may not sell or exchange a compilation for value, in whole or in part, except when selling the tax preparation business itself (26 CFR § 301.7216-2).

So anonymizing client returns isn’t a way around consent: a carefully anonymized, aggregated dataset built from them still can’t be sold to an AI developer. Without each client’s written consent in the required form, tax data is out of scope.

The AICPA confidentiality rule

CPAs who are AICPA members face a second rule. The Confidential Client Information Rule’s basic tenet, as the Journal of Accountancy puts it, is that “a member must obtain consent to disclose a client’s confidential information.” The article notes that the AICPA rule and Section 7216 “address different categories of information.” The AICPA rule covers non-public information obtained from a client, including items such as financial statements that Section 7216 may not reach. It encourages firms to check their practices against both (Journal of Accountancy). Bookkeeping, audit and advisory files are covered even when no tax return is involved. State boards of accountancy have their own confidentiality rules too.

Financial privacy rules

The FTC’s guidance on the Gramm-Leach-Bliley Act’s Privacy Rule lists “tax preparers, accountants, and investment advisors” among the businesses whose activities can make them financial institutions. Under the rule, a covered business must give consumers notice and a reasonable chance to opt out before sharing their nonpublic personal information with nonaffiliated third parties, unless an exception applies (FTC). That’s another reason consumer client data stays out.

What a firm can realistically license

Without client consent, that leaves the firm’s own operations, which is still a lot:

Data	Examples	Check before including
In-house methodology	Close procedures, reconciliation steps, review standards written by the firm	Strip examples taken from client files
Workflow and checklists	Engagement checklists, review sign-off steps, deadline tracking as a process	No client names or figures
Training materials	Onboarding guides, internal courses, technical memos without client facts	Leave out case studies built on real clients
Scheduling and staffing	Busy-season planning, capacity threads	Remove threads that discuss specific clients
IT and operations	Help-desk tickets, security procedures, software rollouts	Remove screenshots or attachments from client work

Three cautions:

• Client data is mixed into everything. Email, chat, document management and practice-management systems all hold client work alongside firm business. Exports usually need to be limited to specific folders, channels or date ranges, then checked.
• Your firm’s own books are different. The firm’s own ledger and vendor records are its data, not a client’s, but they still contain other people’s details that must come out.
• People’s details still come out. Staff and contacts’ names, email addresses and phone numbers are removed before anything is shared; see de-identification.

SellMyData’s accounting and finance page lists what we take and what stays out.

How to scope an export system by system

Client work and firm business usually share the same tools, so the scope has to be drawn inside each system.

• Tax software and practice management (TaxDome, Canopy, Karbon and similar). These are built around clients and returns, so treat them as client data by default. The firm’s own process, such as its workflow stages, task templates and review steps, can sometimes be described or exported separately from the client records that run through it.
• Document storage (SharePoint, Drive and similar). Client folders stay out. Firm-level folders for methodology, training, templates and administration are the place to start.
• Accounting software. Client books in QuickBooks, Xero or Bill are client data. The firm’s own books are the firm’s, but they still contain vendors’ and employees’ details that must come out.
• Email. Client and firm business share inboxes and threads, so email is hard to scope. Firm-wide mailboxes for operations, IT or recruiting are easier to consider than staff mailboxes, which usually hold client correspondence.
• Chat (Teams, Slack). Channels for IT, scheduling or firm operations can be in scope. Client channels and direct messages stay out.

For each system, write down what’s in, what’s out and why. If a client, a regulator or your state board later asks what was shared, that record is your answer.

If clients do consent

Some firms may want to ask clients for consent. For tax return information, the regulations set out what valid consent needs: a written, signed and dated document, given before the disclosure, naming the purpose, the recipient and the information covered, with a copy for the taxpayer. A consent with no stated duration lasts one year (26 CFR § 301.7216-3). For other confidential client information, the AICPA rule calls for the client’s consent too. Treat any consent program as a project for counsel, not a form to add to an engagement letter.

Before you share anything

• Have counsel review the scope under Section 7216, the AICPA rule, your state board’s rules and financial privacy law.
• Write down which systems and folders are in scope, and that client data is excluded.
• Check the export for client names, figures and identifiers before anyone outside the firm sees it.
• When an offer arrives, check its terms: AI data license offers: the terms to check.

To size what you hold first, see Take inventory. This guide is general information, not legal advice; the rules on client information are strict and carry criminal penalties for tax data, so have counsel confirm what your firm can share.