Can a tax preparer accept a referral fee for introducing a client?

What is the short answer for a tax preparer?

Sometimes, but the answer turns on three things: whether the preparer or firm also does attest work for the client, what the client has agreed to, and which professional rules apply. For a tax-only client, the AICPA commission bar is narrower, disclosure is still expected, and federal tax-return confidentiality rules limit how return information may be used to find or pitch an introduction. This is general information, not legal, tax or financial advice. Confirm with your own state board, professional body or counsel before acting.

The compliant route is simple to describe: the owner decides, on their own, to be introduced; you share only basic fit facts; and you never use return data to identify the opportunity or describe the company's records.

Which rule applies to which kind of preparer?

The AICPA Code of Professional Conduct, as hosted by the Minnesota Society of CPAs, contains the commissions and referral fees rule (1.520) and the contingent fees rule (1.510). State rules can be stricter, and some states bar a licensee from taking a contingent fee for preparing a return. Read your own state's rule.

What changes when the client is tax-only?

The bar in the AICPA rule concerns commissions for recommending a product or service to a client when the member or firm also performs certain attest work for that client. A client for whom the firm prepares only returns falls outside that attest trigger. It does not follow that anything goes.

Three points still apply:

• Disclosure. Permitted commissions and referral fees must be disclosed to the client under the AICPA rule. A short written note before the introduction is the sensible way to do it.
• State rules. Boards of accountancy can be stricter, and some require written disclosure or bar specific fee types.
• Tax return confidentiality. Internal Revenue Code section 7216 and its regulations restrict a preparer's use and disclosure of tax return information without the taxpayer's consent, and a request to be introduced to a third party can be a use. This page links no primary text for section 7216, so read the current rule or ask counsel. Ask your counsel what consent wording your jurisdiction expects. Do not scan returns to find clients whose records look valuable.

How can a tax preparer make a clean introduction?

1. Start from a conversation, not from a return. Raise it at a planning meeting, when the owner asks about new revenue or about retiring systems.
2. Disclose first. Tell the owner you may receive a reward from SourceX if the introduction leads to a completed, paid deal.
3. Get written consent. A short email recording the owner's request to be introduced is usually enough to start; your counsel can say whether more is needed.
4. Share only basic fit facts. Headcount at peak, years of operations, broad system types and the name of the authorized sponsor.
5. Step back. The company works directly with SourceX on the inventory, rights review, price and terms.

What to say to the owner

Pair it with a quick screen using the company fit checker, which is preliminary and non-binding and needs no contact details. The broader accountant playbook is on the accountants and bookkeeping firms page.

How do other advisers handle the same question?

Neighbouring professions face parallel rules. A fee-only financial planner, a management consultant, a chief restructuring officer and a commercial banker each have distinct tests. Compare them only to see the pattern: disclosure, consent and a check against your own rulebook.

What about tax on the reward itself?

A reward is income to the recipient. The IRS instructions for Form 1099-NEC explain when a business reports payments to non-employees, and the threshold depends on the year of payment, so confirm the current figure with your tax adviser. Written terms help; see the page on what a referral fee agreement should cover.

How rewards work

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. The reward is paid only after the buyer pays and SourceX receives its fee; an introduction, meeting or signed agreement alone does not trigger payment, and no reward is guaranteed. The reward is a share of SourceX's fee and is never deducted from what the company receives. Read the program terms first. Preparers who also hold securities licenses should read the M&A broker exemption explainer before assuming any exemption helps.

When to decline

• The firm also audits or reviews the company.
• The client has not asked to be introduced.
• The company never had 50+ full-time employees at peak (contractors excluded), so it does not meet the baseline.
• Your state board or employer prohibits the fee.

Next step

Check your state rule, draft the disclosure note, and then register as a partner if the answer allows it.