Washington CPA referral fee rule: what to read and what to disclose

The short answer for Washington CPAs

Read Washington's own text before you accept or decline anything. Washington CPAs are licensed by the Washington State Board of Accountancy under the Public Accountancy Act, chapter 18.04 RCW, and the Board's rules sit in chapter 4-30 WAC. Whether a SourceX referral reward fits turns on the services your firm performs for that company, what the current rule says about disclosure and its timing, and your firm's own policy.

One trap applies to every state rule: older rulemaking notices, bill reports and society summaries can still rank in search. They record how a rule developed. They are not the rule in force today, and quoting them to a client or a partner group can mislead everyone involved.

How do you read the current Washington text?

Use a fixed routine so two partners in the same firm reach the same reading.

1. Open chapter 4-30 WAC on the Legislature's WAC site, not a cached PDF, a society summary or an old CPE handout.
2. Search the chapter for the words commission, referral and contingent, and list every section that uses them.
3. Read the definitions section first; whether a payment counts as a commission or a referral fee often decides which paragraph applies.
4. Check the bracketed history note at the end of each section. It lists the Washington State Register filings that changed it, and the latest one tells you how fresh the text is.
5. Read the matching provisions of chapter 18.04 RCW for anything the statute itself prohibits or requires.
6. Write down the section numbers and the date you read them, and keep that note in the client file.

Repeat the routine whenever you rely on it after a gap of more than a few months. Board rules change through ordinary rulemaking, and the history note is the fastest way to spot it.

Own rule text or adoption by reference?

States handle CPA referral fees in two broad ways, and knowing which model applies tells you where interpretations come from.

While you read, note whether any Washington section also incorporates AICPA standards by reference; some states mix the two models. AICPA members carry the AICPA rules as well, and the explainer on how the AICPA contingent fee rule treats a success-based reward covers that layer.

How does the rule meet real Washington engagements?

What should advance written disclosure contain?

Whatever the current text requires, a written note that reaches the client before it applies, and explains both the fee calculation and your role, answers the questions a client or the Board would ask later.

• The calculation, in words: your firm would receive a set share of what SourceX earns in eligible platform fees on the company's deals, limited by a per-company cap. The guide on how to calculate an illustrative referral commission from a platform fee walks through the mechanics without promising figures.
• The trigger: three things must happen first: a deal closes, the buyer pays, and SourceX receives its fee.
• The source: SourceX's own fee, so the company's payout stays whole.
• Your role: you make the introduction and share basic fit facts; the company works with SourceX directly, and you never handle its records.
• The client's freedom: it can apply or not, and nothing binds it until it agrees price and terms and signs.

A Washington checklist before you introduce

• Current chapter 4-30 WAC and chapter 18.04 RCW sections read, with section numbers and date recorded.
• Every service the firm provides the company listed from its engagement letters.
• Attest work, including reviews and compilations a third party will use, flagged.
• Firm policy checked and the managing partner informed.
• Advance written disclosure delivered and acknowledged by the client.
• Only headcount at peak, years of operation and systems in use shared with SourceX.
• Referral link sent, or the company submitted through the referral form.

Questions for the Board or your counsel

• When a data licensing intermediary pays a licensee for an introduction, is that a commission, a referral fee or something else under the current rule?
• What must advance written disclosure include, and how far ahead of the client's decision must it arrive?
• Which attest services, if any, rule out the payment entirely?
• Does the analysis change if the payment goes to the firm rather than to an individual licensee?
• Does the rule reach a licensee who is not practicing public accountancy for this particular company?

How rewards are paid and reported

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.

A business that pays independent contractors may have to report those payments on Form 1099-NEC, as the IRS explains on its page about reporting payments to independent contractors. Read the program terms for the remaining conditions, and ask your tax adviser how the income fits your firm's books.

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

Next step

Screen the company first with the company fit checker, which needs no contact details. If it fits and your disclosure is in place, register as a partner. For a statute-based contrast, read the Florida commission and referral fee rules under section 473.3205, and see the partner page for accountants for the kinds of clients that tend to qualify.