selling a tax business

[ardi600]

i have a small tax business which i am intereted in selling the cusomer list. any recommendations on how to sell or marktet it? I was thinking to market it myself, but i am concerned what i could show to potential buyers as far as info since most info in tax business is confidential. thank you,

[Koss]

Section 7216

Very good question...

At one time, the IRS took a rather extreme position on this issue, and HRB was told to stop certain advertisements that contained claims about refund amounts, or refunds recovered on "second look" amended returns, or something like that. The IRS appeared to take the position that even anonymized statistical compilations about your clients could not be disclosed.

But that position appears to have been modified. The IRS somehow came to their senses, and I think some of it was in fact based on a lot of comments from the industry and the public. The IRS now recognizes that even if you are not selling your practice, it is probably okay to advertise, for example, that in your practice, you do "over 75 family farm returns each year."

If you think about this example for a minute...

If you practice in a small community or a rural area (which could well be the case if you do a lot of farms), this type of advertising, whether in print or even just by word of mouth, could allow someone to infer that a particular farmer is your client. If there's only one other tax guy in the area, plus HRB, and you know that Farmer Bob can't stand the other tax guy, and that Farmer Bob would never go to a box storefront, it's a pretty good bet that Farmer Bob is your client. But it's still just that--a bet, or an inference. In fact, one might make that inference even if you were not advertising that you do a lot of farm returns.

In terms of what you can disclose about your client base, whether for public advertising or in contemplation of the sale of your practice, you may want to start here:

http://www.irs.gov/irb/2010-04_IRB/ar10.html#d0e881

BMK

[oceanlovin'ea]

If there is an enrolled agent in your area that you have a good relationship with, you might consider approaching that person to see if they would be interested in buying your business.

Linda, EA

[JohnH]

You might want to update your profile and post your location, because someone on this forum might be interested or they may know someone in your area who may be interested. When you have something to sell, it's best to cast the net as wide as possible.

[MLINDER42]

selling a practice

I agree.Please post area of country you are in.