Many CPAs are aware they must return client-provided records in their custody or control to the client upon their request. However, as CPAs prepare a tax return for a client using tax preparation software, it can become challenging to distinguish a CPA’s working paper from a prepared record. This distinction is important to understand so that CPAs will be prepared to provide the appropriate records upon request.  

Per the American Institute of Certified Public Accountants (AICPA) Ethics Questions and Answers, the electronic tax data file created in the performance of a tax return preparation engagement, but not the tax return work product itself, would generally be considered a CPA’s working paper. The information in the tax data file is typically obtained from the client’s books and records and their representations. Such information should, therefore, be available to the client through means other than the tax data file and the client’s tax return records. Accordingly, the tax data file would not meet the description of a CPA-prepared record. 

Specific laws and regulations may vary by state, so CPAs should contact their state licensing board to determine what requirements exist regarding client records in your jurisdiction. 

Additional information regarding this topic can be found in the “Q&A” section, 650.01, of the AICPA Code of Professional Conduct. 

Submitted by the California Board of Accountancy staff.