Accounting firm data and AI: what a CPA firm can license

By Cody Houser, Founder · Last updated October 24, 2026

The short answer: A CPA firm can license material it owns that contains no client information, such as methodologies, templates, training content, and its own operating records. Client data needs the client’s specific consent under the AICPA Code. Tax return information also needs a written Section 7216 consent that meets IRS format rules, and it stays covered even when anonymized.

This guide is for managing partners and firm leaders weighing whether the firm’s records have value to AI developers. It covers the rules that decide what can leave the firm, sorts common material by the rule that governs it, and lays out steps to take with your counsel. It explains the rules; it is not legal or tax advice.

Why AI developers want accounting records

AI tools for close, reconciliation, tax, and audit need to learn how the work is actually done: the review notes, the workpapers, the correspondence, and the judgment calls in between. An established firm holds years of that. Almost all of it touches client information, which is why the first question is what the firm may share. For the wider market, see how companies sell data to AI developers.

The AICPA Confidential Client Information Rule (ET 1.700.001)

The rule says a member in public practice “shall not disclose any confidential client information without the specific consent of the client”. The Journal of Accountancy explains that the code defines confidential client information as any information obtained from the client that is not available to the public. That is broader than tax: it covers financial statements, ledgers, and advisory work.

Three interpretations under the rule matter most for licensing:

1.700.060, disclosure to third parties. Threats arise even when clients are not specifically identified. If the information is confidential, the member needs the client’s specific consent, preferably in writing, stating the nature of the information, the type of third party, and its intended use.
1.700.040, third-party service providers. Before sending client information to an outside provider, the member needs either a contract that protects confidentiality or the client’s specific consent. Anyone who reviews or de-identifies records for you is a service provider.
Purchase, sale, or merger of a practice. Consent isn’t required for a review of client information in connection with buying, selling, or merging a practice, with precautions such as nondisclosure agreements. Licensing data to an AI developer is not a practice sale.

AICPA membership rules are matched by state law. California’s accountancy statute, for example, says no confidential client information “shall be disclosed by the licensee without the written permission of the client”, subject to narrow exceptions such as subpoenas.

Section 7216: tax return information

26 U.S.C. 7216 applies to anyone in the business of preparing returns who “knowingly or recklessly” discloses return information or uses it “for any purpose other than to prepare, or assist in preparing” the return. It is a misdemeanor punishable by a fine of up to $1,000 ($100,000 where identity theft is involved), up to one year in prison, or both. Section 6713 adds a civil penalty of $250 per disclosure or use, up to $10,000 a year, rising to $1,000 and $50,000 for identity-theft-related cases.

Two regulations close the anonymization route:

Treas. Reg. 301.7216-1(b)(3) defines tax return information as any information furnished “in any form or manner” in connection with preparing a return, including information the preparer derives from it, and including “statistical compilations of tax return information, even in a form that cannot be associated with, or otherwise identify, directly or indirectly, a particular taxpayer.”
Treas. Reg. 301.7216-2(o) lets preparers build statistical compilations without consent only for internal management or bona fide tax research, and says a preparer “may not sell or exchange for value a statistical compilation” except when selling the tax preparation business.

In practice, licensing tax return information for AI training, in raw or aggregated form, runs through taxpayer consent.

Section 7216 consent requirements

Treas. Reg. 301.7216-3 sets the baseline for every consent:

It must be written, and “knowing and voluntary.”
Conditioning services on the consent makes it involuntary and invalid.
It must identify the purpose and the specific recipient of a disclosure, or describe the particular use, and specify the tax return information covered.
It must be signed and dated by the taxpayer, who gets a copy at signing.
Uses and disclosures need separate documents, and each use or disclosure must be separately identified.
A consent that doesn’t state its duration lasts one year from signing.

For individual (Form 1040 series) clients, Rev. Proc. 2013-14 adds format rules. Each consent must be a separate written document; on paper, every sheet must relate only to that consent and use at least 12-point type on 8½ by 11 inch or larger paper. It must include mandatory statements in a set order, beginning: “Federal law requires this consent form be provided to you.” The statements tell the client they don’t have to sign to get their return prepared and that once disclosed, federal law may not protect the information from further use. For business clients that don’t file 1040s, the regulation allows the consent in any format, including an engagement letter, if it meets the baseline rules.

The Safeguards Rule and GLBA privacy notices

The FTC’s Safeguards Rule, 16 CFR Part 314, lists “tax preparation firms” among the financial institutions it covers. IRS Publication 4557 confirms that the Gramm-Leach-Bliley Act’s definition “includes professional tax preparers” and that they need a written information security plan. Two requirements bear directly on a licensing project. Section 314.4(f) requires you to oversee service providers by selecting capable ones, requiring safeguards by contract, and assessing them periodically. And a security event involving at least 500 consumers must be reported to the FTC within 30 days of discovery.

GLBA also has a privacy side. Under 15 U.S.C. 6802, a financial institution may not disclose nonpublic personal information about consumers to a nonaffiliated third party unless it has given the required privacy notice and a chance to opt out. Check what your firm’s privacy notice has told individual clients before treating any of their data as licensable.

Who owns the workpapers: one state example

Owning a record doesn’t make it licensable. California is a clear example. Business and Professions Code 5037 says workpapers a licensee prepares while serving a client “shall be and remain the property of the licensee,” absent an agreement otherwise. The same section says no such workpaper “shall be sold, transferred, or bequeathed, without the consent of the client,” except to partners, successors, or a merged firm. Check your own state board’s rules; they vary.

UK and international guidance

UK bodies have addressed AI training on client data directly. The CCAB’s draft statement on the ethical use of AI says client or sensitive data “should never be input into an AI tool without specific consent, particularly where the tool may retain data for training purposes.” Its June 2026 draft case studies include a large firm that wants to train a model on synthetic data generated from client records. The case study concludes that, under the IESBA Code and FRC guidance, “client authorisation is required before using their data to create synthetic data, regardless of how transformed the final data may be,” and recommends a formal opt-in for existing clients.

The ICAEW told members in July 2026 that firms should understand where data is stored, who can access it, “whether it may be used to train models”, and how outputs are monitored. And the seven PCRT tax bodies’ January 2026 guidance says entering a client’s data into a publicly available AI model without consent “is likely to constitute a breach of client confidentiality.”

Check your own tech stack first

Before licensing anything, find out whether client data is already leaving through software terms. Accounting Today reported in August 2026 that some vendors’ terms give them permission to use customer data for purposes such as training their own AI models, sometimes under a perpetual license. Practitioners quoted there suggest reading how each vendor defines customer data, searching for words like “improve,” “develop,” “training data,” and “anonymized data,” checking subprocessors, and getting written statements that no client data is used to train any model.

What a CPA firm can license: material by material

Material	Licensable?	Rule that governs it
Firm-built methodologies, templates, checklists, training content	Often yes	Firm ownership; confirm no client data is embedded
The firm’s own operating records (its books, scheduling, workflow)	Often yes	Remove client identifiers; employee data rules still apply
Tax returns, tax workpapers, and data furnished for returns	Only with written consent	IRC 7216 and 6713; Treas. Reg. 301.7216-3; Rev. Proc. 2013-14 for 1040 filers
Anonymized or aggregated tax data	Not for sale without consent	Treas. Reg. 301.7216-1(b)(3) and 301.7216-2(o)
Audit, review, bookkeeping, and advisory files	Only with specific consent	AICPA ET 1.700.001 and interpretation 1.700.060; state board rules
Workpapers the firm owns	Only with client consent (California)	State law such as Cal. Bus. & Prof. Code 5037
Individual clients’ personal financial data	Only with consent and notice	GLBA (15 U.S.C. 6802) and the Safeguards Rule, plus the rules above

For what makes the licensable categories valuable, see the data value checklist and how much company data is worth.

Steps for a managing partner

1. Involve counsel and your ethics adviser first. Confirm your state board’s confidentiality and workpaper rules before describing records to anyone outside the firm.

2. Audit your vendors. Check whether current software terms already allow training on client data, and fix that before anything else.

3. Inventory by system. Practice management, tax software, document storage, email, chat, and the firm’s own accounting. Note date ranges, volumes, and which systems hold tax return information.

4. Separate firm material from client material. Tag methodologies and templates built in-house; anything derived from a return falls under Section 7216.

5. Decide whether consent is realistic. If you want client data included, draft separate Section 7216 consents that meet the regulation and, for 1040 clients, Rev. Proc. 2013-14. Never condition services on signing. Expect some clients to decline.

6. Describe, don’t send. The first conversation with a buyer or broker should cover services, firm size, years of history, and systems. No files, credentials, or client information.

7. Control the agreement and transfer. Scope, permitted uses, de-identification, security, deletion, and service-provider safeguards under the Safeguards Rule. Use the AI data licensing agreement checklist. If the practice is winding down, see licensing data when a business is closing.

Questions people ask

Can CPA firms sell client data?

Not without consent. The AICPA’s Confidential Client Information Rule bars disclosing confidential client information without the client’s specific consent, and for tax clients Section 7216 makes unauthorized use or disclosure of tax return information a federal misdemeanor. A firm can license its own material that contains no client information.

What is a Section 7216 consent?

A signed, dated, written consent from the taxpayer that lets a tax return preparer use or disclose tax return information for a purpose other than preparing the return. Treas. Reg. 301.7216-3 requires it to be knowing and voluntary, to name the purpose, the recipient, and the information, and to be separate for uses and disclosures.

Can a tax preparer use anonymized client data to train AI?

Anonymizing does not take data outside Section 7216. The regulations define tax return information to include statistical compilations even when no taxpayer can be identified, and a preparer may not sell or exchange such a compilation for value except as part of selling the tax practice.

How long does a Section 7216 consent last?

As long as the consent specifies. If it doesn’t specify a duration, Treas. Reg. 301.7216-3(b)(5) makes it effective for one year from the date the taxpayer signed it.

Does the FTC Safeguards Rule apply to accounting firms?

It applies to tax preparation firms, which 16 CFR Part 314 lists as financial institutions. The rule requires a written information security program and oversight of service providers, which covers any outside party that handles client data during a licensing review.

Are my AI vendors already training on client data?

Possibly. Accounting Today reported in August 2026 that some vendor terms let vendors use customer data to improve or train their models. Read each vendor’s definition of customer data, look for training and licensing clauses, and ask for written commitments.

How Hyperdrive Data fits

Hyperdrive Data is a broker, and accounting is one of the industries current buyers are interested in. A first conversation is a description of the firm and its systems, with no files or client information. If there’s a fit with current buyer requirements, the buyer’s proposed agreement sets the terms, and you and your advisers decide whether to proceed. See whether your firm fits.

Sources

This guide is general information, not legal, tax, or financial advice. Review any proposed agreement with your own advisers.

Related guides

Check whether your company is a fit. Start with a description of your records; no files needed.