Accounting firms · Last updated October 20, 2026

IRC § 7216 and licensing CPA firm data to AI

Short answer: Section 7216 makes it a crime for tax preparers to knowingly or recklessly disclose or use tax return information outside permitted purposes, and the regulations restrict selling compilations of it. Any AI data deal at a firm that prepares returns has to start by walling off return information.

What the rule covers

See the statute (26 U.S.C. § 7216) and the regulations on permitted disclosures, including statistical compilations (26 CFR § 301.7216-2).

Practical scoping

Separate tax-practice systems from firm-administration systems.
Keep returns, workpapers and client correspondence out unless counsel approves a consent route.
Consider firm-authored SOPs, blank templates, internal training.

Buyer protections aren't a substitute

Buyers describe de-identification (Mode affiliate FAQ), but that doesn't by itself resolve a § 7216 question.

This is general information, not legal advice. Talk to your own attorney or compliance advisor before you share or license any records.

What could your company's records be worth?

Answer 6 questions. See the published range for a company like yours and which program fits. Takes about 2 minutes.

Start the free check

Frequently asked questions

Does anonymizing return data solve it?

Not necessarily. The regulations specifically address compilations. Ask a tax attorney.

Does § 7216 apply to bookkeeping-only firms?

It applies to people in the business of preparing returns. A firm's mix of services matters; ask counsel.

Sources

Referral-fee disclosure: we may be paid by a program if your company signs with it after using this site. General information only, not legal advice.