(a) Records.
  (1) A person shall return original client records to a client or former client within a reasonable time (promptly, not to exceed 10 business days) after the client or former client has made a request for those records. Original client records are those records provided to the person by the client or former client in order for the person to provide professional accounting services to the client or former client. Original client records also include those documents obtained by the person on behalf of the client or former client in order for the person to provide professional accounting services to the client or former client and do not include the electronic and hard copies of internal work papers. The person shall provide these records to the client or former client, regardless of the status of the client's or former client's account and cannot charge a fee to provide such records. Such records shall be returned to the client or former client in the same format, to the extent possible, that they were provided to the person by the client or former client. The person may make copies of such records and retain those copies.
  (2) Unless the person and the client have agreed in writing to the contrary:
    (A) A person's work papers, to the extent that such work papers include records which would ordinarily constitute part of the client's or former client's books and records and are not otherwise available to the client or former client, shall also be furnished to the client within a reasonable time (promptly, not to exceed 20 business days) after the client has made a request for those records. The person can charge a reasonable fee for providing such work papers.
    (B) Such work papers shall be in a format that the client or former client can reasonably expect to use for the purpose of accessing such work papers. The person is not required to convert records that are not in electronic format to electronic format or to convert electronic records into a different type of electronic format. However, if the client requests records in a specific format, and the records are available in such format within the person's custody and control, the client's request shall be honored.
    (C) The person is not required to provide the client with proprietary formulas.
    (D) The person is not required to provide the client with other formulas unless the formulas support the client's accounting or other records or the person was engaged to provide such formulas as part of a completed work product.
  (3) Work papers which constitute client records include, but are not limited to:
    (A) documents in lieu of books of original entry such as listings and distributions of cash receipts or cash disbursements;
    (B) documents in lieu of general ledger or subsidiary ledgers, such as accounts receivable, job cost and equipment ledgers, or similar depreciation records;
    (C) all adjusting and closing journal entries and supporting details when the supporting details are not fully set forth in the explanation of the journal entry; and
    (D) consolidating or combining journal entries and documents and supporting detail in arriving at final figures incorporated in an end product such as financial statements or tax returns.
(b) Work papers. Work papers, regardless of format, are those documents developed by the person incident to the performance of his engagement which do not constitute records that must be returned to the client in accordance with subsection (a) of this section. Work papers developed by a person during the course of a professional engagement as a basis for, and in support of, an accounting, audit, consulting, tax, or other professional report prepared by the person for a client, shall be and remain the property of the person who developed the work papers.
(c) For a reasonable charge, a person shall furnish to his client or former client, upon request from his client made within a reasonable time after original issuance of the document in question:
  (1) a copy of the client's tax return; or
  (2) a copy of any report or other document previously issued by the person to or for such client or former client provided that furnishing such reports to or for a client or former client would not cause the person to be in violation of the portions of §501.60 of this chapter (relating to Auditing Standards) concerning subsequent events.
(d) This rule imposes no obligation on the person who provides services to a business entity to provide documents to anyone involved with the entity except the authorized representative of the entity.
(e) Documentation or work documents required by professional standards for attest services shall be maintained in paper or electronic format by a person for a period of not less than five years from the date of any report issued in connection with the attest service, unless otherwise required by another regulatory body. Failure to maintain such documentation or work papers constitutes a violation of this section and may be deemed an admission that they do not comply with professional standards.
(f) Interpretive Comment: It is recommended that a person obtain a receipt or other written documentation of the delivery of records to a client.
(g) Interpretive Comment: For the purposes of this rule, client records include:
  (1) backup or working files of commercially available software along with any passwords needed to access such files; or
  (2) client files from commercially available tax return preparation software including any passwords needed to access such files.

Source Note: The provisions of this §501.76 adopted to be effective June 11, 2000, 25 TexReg 5339; amended to be effective December 6, 2001, 26 TexReg 9859; amended to be effective February 4, 2004, 29 TexReg 963; amended to be effective February 17, 2008, 33 TexReg 1094; amended to be effective October 15, 2008, 33 TexReg 8512; amended to be effective December 7, 2011, 36 TexReg 8234; amended to be effective August 30, 2016, 41 TexReg 6498; amended to be effective December 5, 2018, 43 TexReg 7789; amended to be effective June 3, 2020, 45 TexReg 3632