Texas State Board of Public Accountancy rules on commissions and referral fees

The short answer for Texas CPAs

Read the Texas rules on their own terms, then classify the payment, then disclose it. Texas licenses CPAs under the Public Accountancy Act, chapter 901 of the Texas Occupations Code, and the Texas State Board of Public Accountancy (TSBPA) publishes its Rules of Professional Conduct in Title 22, Part 22, Chapter 501 of the Texas Administrative Code. Confirm the citations and current wording on the Board's site. The rules are where commissions, contingent fees and referral fees are addressed, and a SourceX reward has features of more than one.

The feature that makes classification tricky is timing. SourceX pays the reward only after the buyer pays and SourceX receives its fee, so the payment depends on a result. That is why the contingent fee rule deserves a look alongside the commission rule, even though the client never pays you anything for it.

Contingent fee, commission or referral fee?

Each label can lead to a different answer, so settle it before anything else.

The contingent fee meaning above is the AICPA Code's. As the New York State Society of CPAs explains, a contingent fee under the Code is one whose amount depends on attaining a specific result, and members may not perform services for a contingent fee for a client for whom the firm performs an audit or review, certain compilations or an examination of prospective financial information. A SourceX reward is not a fee for services you perform for the client, which is exactly the kind of distinction to test against the Texas definition.

Why the AICPA summary does not settle a Texas question

State rules can differ from the AICPA Code and can be stricter. The New Jersey Society of CPAs' resource on commissions and contingent fees gives a concrete example: in New Jersey, a licensee may not receive a contingent fee for preparing an original or amended tax return. Treat the AICPA as background and the TSBPA rule text as the answer for your Texas license.

Three habits keep the reading reliable:

• Read the rules on the TSBPA's site or the Secretary of State's Texas Administrative Code viewer, and note the date.
• Read the definitions in the same chapter before the operative rules.
• Check the Act itself for anything it prohibits directly, so you are not relying on rules alone.

How do the rules apply in Texas practice?

Tax-only relationships deserve their own read; the explainer on whether a tax preparer can accept a referral fee looks at that relationship in more depth.

The Texas disclose-then-introduce sequence

1. Read the current Chapter 501 rules on commissions, contingent fees and referral fees, plus the related Act provisions, and date your notes.
2. List the firm's services to the company from its engagement letters.
3. Classify the reward with the table above, and ask the TSBPA or counsel if the answer is unclear.
4. Agree internally whether the firm or an individual receives the payment.
5. Give the client a written disclosure stating the payer, how the reward is calculated, the success trigger, that the company's proceeds are not reduced by it, and that your role ends at the introduction. A worked example of an illustrative commission calculation makes that part easier to write.
6. Get the client's written acknowledgment and file it.
7. Only then send your referral link or submit the referral form, sharing basic fit facts and nothing confidential.

Illustrative: a fictional two-partner firm prepares tax returns and runs the monthly close for a 140-employee IT services company with ten years of ticket and project history. Before saying anything to the owner, the partners read Chapter 501, ask counsel how the reward is classified for a tax client, follow that advice on disclosure, and only then send the referral link.

Questions to ask the TSBPA or your counsel

• Does the Texas contingent fee definition reach an outcome-dependent payment that the client never makes?
• If a company outside accounting pays me for an introduction, do the Texas rules call that a commission?
• What must a commission disclosure contain, and must it be in writing before the client acts?
• Do the answers differ for tax-only clients?
• Does the analysis change if the firm, rather than the licensee, receives the payment?

How rewards are paid and taxed

Partners earn 25% of the eligible platform fees SourceX actually collects from the referred company's licensing deals, capped at $100,000 per referred company. Rewards are payable only after the buyer pays and SourceX receives its fee; no reward is guaranteed.

Referral payments are generally taxable income to the person who receives them; IRS Publication 525 explains that amounts included in income are taxable unless the law specifically exempts them. Ask your tax adviser how to report it, and read the program terms for payment conditions.

This is general information, not legal, tax or financial advice. Confirm with your own counsel, tax adviser or professional body before acting.

Next step

Run the anonymous company fit checker first, then register as a partner once your disclosure is acknowledged. Firms serving clients in both states can read the California commission disclosure rules side by side with this page, and the accountants' partner page shows which clients tend to qualify.