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November 02, 2016 • Jackie Frazier • Log In to Post Comments

This message is for Rene Rodda or anyone that knows law.  I am interested in selling my tax business and am being told by the broker that i don't have to let my clients know, but that seems wrong.  i believe that i have to let them know due to social security numbers, dates of birth and financial information i have on them.  i have about 1400 tax clients and i just don't want to be party to a class action law suit.  Can someone please advise me on this?

Thank you



We have a great publication when it comes time to sell your practice entitled Strategies for Success: Selling Your Practice that covers many topics associated with the sale.

To answer your immediate question, for privacy purposes, the seller and buyer must get written permission for each client to transfer files from one tax professional (or one company) to another. We have a sample letter for each client to sign prior to turning over the customer’s file to the new owner contained in the aforementioned Spidell publication. 

You do not have to disclose to your clients that you are simply contemplating or negotiating a sale.  When you start negotiating, you’ll need to disclose a lot of information to the buyer, but you do have certain ethical and legal obligations to protect your clients’ privacy. Rule 301 of the AICPA Code of Professional Conduct states that a member in public practice shall not disclose any confidential client information without the specific consent of the client. The California Accountancy Act contains a similar pronouncement. (CAA §5063.3)

However, both AICPA Rule 301 and CAA §5063.3 make exceptions for a sale of a practice or proposed sale.





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