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Non-Disclosure Agreement

Non-Disclosure Agreement for Tax Preparation Firm in New York

Protect client tax data with a tailored non-disclosure agreement for tax preparation firm in New York. Complies with NY SHIELD Act, GLBA, and IRS Circular 230 to prevent

By The PaperForge Editorial Team·Last updated June 8, 2026
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Tax preparation firms in New York routinely handle highly sensitive client data including W-2s, 1099s, depreciation schedules, and amended return details. A non-disclosure agreement for tax... Read more

Customize your Non-Disclosure Agreement

17 fields · Takes about 2 minutes

Terms

Be specific: trade secrets, client lists, financial data, proprietary processes, etc.

Parties
Signatures

List the specific categories of tax documents and financial data this NDA must protect. Reference any proprietary deduction methodologies unique to your firm.

Identify any external parties who will receive confidential client tax data under this agreement.

Number of days after discovery within which the receiving party must notify you of any potential breach, consistent with NY SHIELD Act timing.

Enter your Preparer Tax Identification Number issued by the IRS. Required for all compensated tax preparation activities.

Name of your E&O carrier. Helps receiving parties assess your risk mitigation practices.

Non-Disclosure Agreement

Legal Document

This Non-Disclosure Agreement (this "Agreement") is entered into as of [effective_date] (the "Effective Date"), by and between [disclosing_party] (the "Disclosing Party") and [receiving_party] (the "Receiving Party"). The Disclosing Party and the Receiving Party may be referred to herein individually as a "Party" and collectively as the "Parties."

WHEREAS, the Disclosing Party possesses certain confidential and proprietary information relating to its business, operations, products, services, research, development, technical data, trade secrets, and other matters (collectively, "Confidential Information"); and

WHEREAS, the Receiving Party desires to receive, and the Disclosing Party is willing to disclose, certain Confidential Information for the purpose of evaluating or pursuing a potential business relationship between the Parties (the "Purpose"); and

WHEREAS, as a condition to the disclosure of such Confidential Information, the Disclosing Party requires that the Receiving Party agree to maintain the confidentiality of such information in accordance with the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1. Definition of Confidential Information

"Confidential Information" means any and all non-public information, in any form or medium, whether written, oral, electronic, visual, or otherwise, that is disclosed by the Disclosing Party to the Receiving Party, either directly or indirectly, including but not limited to: [confidential_info]. Confidential Information shall also include any notes, analyses, compilations, studies, summaries, or other materials prepared by the Receiving Party that contain, reflect, or are derived from Confidential Information. Confidential Information shall not include information that: (a) is or becomes generally available to the public through no fault, act, or omission of the Receiving Party; (b) was already in the Receiving Party's possession without restriction prior to disclosure by the Disclosing Party, as evidenced by the Receiving Party's written records; (c) is independently developed by the Receiving Party without use of or reference to the Confidential Information, as evidenced by the Receiving Party's written records; or (d) is obtained by the Receiving Party from a third party who is not, to the Receiving Party's knowledge, under any obligation of confidentiality with respect to such information.

2. Obligations of Receiving Party

The Receiving Party agrees that it shall: (a) hold the Confidential Information in strict confidence and protect it with at least the same degree of care that it uses to protect its own confidential and proprietary information, but in no event less than a reasonable degree of care; (b) not disclose, publish, or otherwise disseminate the Confidential Information to any third party without the prior written consent of the Disclosing Party; (c) use the Confidential Information solely for the Purpose and not for any other purpose whatsoever; (d) limit access to the Confidential Information to those of its employees, officers, directors, agents, advisors, and representatives (collectively, "Representatives") who have a need to know such information for the Purpose and who are bound by obligations of confidentiality no less restrictive than those contained herein; and (e) be responsible for any breach of this Agreement by any of its Representatives. The Receiving Party shall promptly notify the Disclosing Party in writing upon discovery of any unauthorized use or disclosure of Confidential Information.

3. Permitted Disclosures

Notwithstanding anything to the contrary in this Agreement, the Receiving Party may disclose Confidential Information to the extent required by applicable law, regulation, or valid court order or subpoena (a "Legal Requirement"), provided that the Receiving Party: (a) provides the Disclosing Party with prompt written notice of such Legal Requirement prior to disclosure (to the extent legally permissible), so that the Disclosing Party may seek a protective order or other appropriate remedy; (b) cooperates with the Disclosing Party, at the Disclosing Party's expense, in seeking such protective order or other remedy; and (c) discloses only that portion of the Confidential Information that the Receiving Party is legally required to disclose, as advised by its legal counsel. Any Confidential Information disclosed pursuant to a Legal Requirement shall continue to be treated as Confidential Information for all other purposes under this Agreement.

4. Term and Duration

This Agreement shall become effective as of the Effective Date and shall remain in full force and effect until terminated by either Party upon thirty (30) days' prior written notice to the other Party. Notwithstanding any termination or expiration of this Agreement, the Receiving Party's obligations of confidentiality with respect to all Confidential Information disclosed during the term of this Agreement shall survive and continue for a period as specified below from the date of disclosure of each item of Confidential Information.

5. Return of Materials

Upon the termination or expiration of this Agreement, or upon the written request of the Disclosing Party at any time, the Receiving Party shall promptly: (a) return to the Disclosing Party all originals and copies of any documents, materials, and other tangible items containing or embodying Confidential Information; or (b) at the Disclosing Party's option, destroy all such documents, materials, and tangible items and provide the Disclosing Party with a written certification signed by an authorized officer of the Receiving Party confirming that all such materials have been destroyed. Notwithstanding the foregoing, the Receiving Party may retain one (1) archival copy of the Confidential Information solely for the purpose of monitoring its ongoing obligations under this Agreement, and any Confidential Information retained in routine backup systems shall be subject to the continuing confidentiality obligations of this Agreement.

6. No License or Warranty

Nothing in this Agreement shall be construed as granting to the Receiving Party any license, right, title, or interest in or to the Confidential Information, or any patent, copyright, trademark, trade secret, or other intellectual property right of the Disclosing Party. All Confidential Information shall remain the sole and exclusive property of the Disclosing Party. The Disclosing Party makes no representation or warranty, express or implied, as to the accuracy, completeness, or fitness for any particular purpose of the Confidential Information. The Receiving Party acknowledges that it shall use the Confidential Information at its own risk.

7. Remedies

The Receiving Party acknowledges and agrees that any breach or threatened breach of this Agreement may cause irreparable harm to the Disclosing Party for which monetary damages alone would be an inadequate remedy. Accordingly, the Disclosing Party shall be entitled to seek equitable relief, including injunction and specific performance, in addition to all other remedies available at law or in equity, without the necessity of proving actual damages or posting any bond or other security. Such equitable relief shall not be deemed to be the exclusive remedy for any breach of this Agreement, but shall be in addition to all other remedies available at law or in equity.

8. Governing Law and Jurisdiction

This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of [state_law], without regard to its conflict of laws principles. Each Party irrevocably consents to the exclusive jurisdiction and venue of the state and federal courts located in the State of [state_law] for the adjudication of any dispute arising out of or relating to this Agreement, and each Party hereby irrevocably waives any objection it may have to such jurisdiction or venue, including any objection based on inconvenient forum.

9. Miscellaneous

9.1 Entire Agreement. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations, and discussions, whether oral or written, between the Parties relating to the subject matter hereof. 9.2 Severability. If any provision of this Agreement is held to be invalid, illegal, or unenforceable by a court of competent jurisdiction, such provision shall be modified to the minimum extent necessary to make it valid, legal, and enforceable, and the remaining provisions of this Agreement shall continue in full force and effect. 9.3 Amendment. This Agreement may not be amended, modified, or supplemented except by a written instrument signed by both Parties. 9.4 Waiver. No waiver of any provision of this Agreement shall be effective unless made in writing and signed by the waiving Party. The failure of either Party to enforce any provision of this Agreement shall not constitute a waiver of that Party's right to enforce that provision or any other provision of this Agreement in the future. 9.5 Assignment. The Receiving Party may not assign or transfer this Agreement, or any rights or obligations hereunder, without the prior written consent of the Disclosing Party. Any attempted assignment in violation of this provision shall be void and of no effect. 9.6 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. 9.7 Notices. All notices, requests, demands, and other communications required or permitted under this Agreement shall be in writing and shall be deemed given when delivered personally, sent by confirmed electronic mail, or sent by nationally recognized overnight courier to the addresses of the Parties as set forth in the preamble of this Agreement, or to such other address as either Party may designate in writing.

Additional Provisions

NY SHIELD Act Data Security Warranty

The Receiving Party represents and warrants that it has implemented and will maintain administrative, technical, and physical safeguards for the protection of all Confidential Tax Information as required by the NY SHIELD Act (N.Y. Gen. Bus. Law § 899-aa and § 899-bb). These safeguards shall be at least as rigorous as those mandated for tax preparation firms under the Gramm-Leach-Bliley Act. In the event of any unauthorized acquisition of unencrypted computerized data that compromises the security, confidentiality, or integrity of client tax records, the Receiving Party shall notify the Disclosing Party within the timeframe required by the NY SHIELD Act and cooperate fully in any required breach notification to affected New York residents. This warranty survives termination of the agreement and any subsequent IRS audits or investigations. Failure to maintain these safeguards constitutes a material breach and triggers the remedies set forth herein, including indemnification for any civil penalties imposed by the New York Attorney General or the Department of Taxation and Finance.

Compliance with Treasury Circular 230 and PTIN Obligations

Both parties acknowledge that the Disclosing Party is a tax preparation firm operating under a valid Preparer Tax Identification Number (PTIN) issued by the Internal Revenue Service and is subject to the duties and restrictions contained in Treasury Department Circular 230. The Receiving Party agrees that any access to client tax returns, workpapers, or client lists shall be used solely for the limited purposes authorized by this Agreement and shall not be used in any manner that could violate Circular 230 standards of practice before the IRS. The Receiving Party further covenants that it will not engage in any conduct that could subject the Disclosing Party to IRS penalties for improper disclosure of taxpayer information under IRC § 7216. This provision is intended to protect against both federal regulatory sanctions and parallel enforcement actions under New York State tax laws. Any violation of this clause shall be considered an irreparable harm justifying immediate injunctive relief in addition to monetary damages.

Limitation of Liability Aligned with New York Labor Law and E&O Standards

Notwithstanding any other provision, the total liability of either party arising out of or relating to any breach of this Non-Disclosure Agreement for tax preparation firm in New York shall not exceed the amount of professional liability insurance coverage maintained by the Disclosing Party, which coverage complies with industry standards for New York tax practitioners. This limitation shall not apply to breaches involving willful misconduct or gross negligence. The parties agree that this cap is reasonable given the nature of tax preparation services and the potential for amplified damages under the NY SHIELD Act. This clause is drafted to be consistent with New York’s public policy on limitation-of-liability provisions as interpreted under N.Y. Gen. Oblig. Law and relevant case law governing professional service agreements. The Receiving Party acknowledges that the Disclosing Party’s Errors and Omissions insurance policy may contain specific notice and cooperation requirements that must be followed in the event of a claim involving disclosed confidential tax information.

Return and Destruction of Tax Records with Audit Trail

Upon termination or expiration of this Agreement, or at any time upon written request, the Receiving Party shall, within forty-five (45) days, return or securely destroy all documents and electronic files containing Confidential Tax Information, including all copies, extracts, and summaries. Destruction must follow NIST SP 800-88 guidelines and include provision of a written certification of deletion signed by an officer of the Receiving Party. For any information stored in backup systems, the Receiving Party shall continue to protect such data under the terms of this Agreement until the next scheduled purge cycle. This requirement is imposed to satisfy both IRS record-retention rules under Circular 230 and the affirmative data-security obligations imposed on businesses by the NY SHIELD Act. The Receiving Party shall maintain a detailed audit trail documenting the return or destruction process for a minimum of six (6) years to enable the Disclosing Party to demonstrate compliance during any future New York State regulatory inquiry or client dispute.

Additional Details

Types of Client Tax Information Covered:

[client tax data types]

Third-Party Recipients (e.g., Software Vendors): [third party vendors]
Data Breach Notification Period (Days): [data breach notification period]
Your Firm's PTIN: [ptin number]
Confirm NY SHIELD Act Safeguards Are in Place: No
Permitted Disclosures to Tax Authorities: [permitted irs disclosures]
Errors & Omissions Insurance Carrier: [e and o carrier]
Return or Destroy Confidential Materials (Days After Termination): [return or destroy period]

IN WITNESS WHEREOF, the Parties have executed this Non-Disclosure Agreement as of the date first written above.

Disclosing Party

Name: Disclosing Party

Date: ___________________

Receiving Party

Name: Receiving Party

Date: ___________________

Non-Disclosure Agreement

Legal Document

This Non-Disclosure Agreement (this "Agreement") is entered into as of [effective_date] (the "Effective Date"), by and between [disclosing_party] (the "Disclosing Party") and [receiving_party] (the "Receiving Party"). The Disclosing Party and the Receiving Party may be referred to herein individually as a "Party" and collectively as the "Parties."

WHEREAS, the Disclosing Party possesses certain confidential and proprietary information relating to its business, operations, products, services, research, development, technical data, trade secrets, and other matters (collectively, "Confidential Information"); and

WHEREAS, the Receiving Party desires to receive, and the Disclosing Party is willing to disclose, certain Confidential Information for the purpose of evaluating or pursuing a potential business relationship between the Parties (the "Purpose"); and

WHEREAS, as a condition to the disclosure of such Confidential Information, the Disclosing Party requires that the Receiving Party agree to maintain the confidentiality of such information in accordance with the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1. Definition of Confidential Information

"Confidential Information" means any and all non-public information, in any form or medium, whether written, oral, electronic, visual, or otherwise, that is disclosed by the Disclosing Party to the Receiving Party, either directly or indirectly, including but not limited to: [confidential_info]. Confidential Information shall also include any notes, analyses, compilations, studies, summaries, or other materials prepared by the Receiving Party that contain, reflect, or are derived from Confidential Information. Confidential Information shall not include information that: (a) is or becomes generally available to the public through no fault, act, or omission of the Receiving Party; (b) was already in the Receiving Party's possession without restriction prior to disclosure by the Disclosing Party, as evidenced by the Receiving Party's written records; (c) is independently developed by the Receiving Party without use of or reference to the Confidential Information, as evidenced by the Receiving Party's written records; or (d) is obtained by the Receiving Party from a third party who is not, to the Receiving Party's knowledge, under any obligation of confidentiality with respect to such information.

2. Obligations of Receiving Party

The Receiving Party agrees that it shall: (a) hold the Confidential Information in strict confidence and protect it with at least the same degree of care that it uses to protect its own confidential and proprietary information, but in no event less than a reasonable degree of care; (b) not disclose, publish, or otherwise disseminate the Confidential Information to any third party without the prior written consent of the Disclosing Party; (c) use the Confidential Information solely for the Purpose and not for any other purpose whatsoever; (d) limit access to the Confidential Information to those of its employees, officers, directors, agents, advisors, and representatives (collectively, "Representatives") who have a need to know such information for the Purpose and who are bound by obligations of confidentiality no less restrictive than those contained herein; and (e) be responsible for any breach of this Agreement by any of its Representatives. The Receiving Party shall promptly notify the Disclosing Party in writing upon discovery of any unauthorized use or disclosure of Confidential Information.

3. Permitted Disclosures

Notwithstanding anything to the contrary in this Agreement, the Receiving Party may disclose Confidential Information to the extent required by applicable law, regulation, or valid court order or subpoena (a "Legal Requirement"), provided that the Receiving Party: (a) provides the Disclosing Party with prompt written notice of such Legal Requirement prior to disclosure (to the extent legally permissible), so that the Disclosing Party may seek a protective order or other appropriate remedy; (b) cooperates with the Disclosing Party, at the Disclosing Party's expense, in seeking such protective order or other remedy; and (c) discloses only that portion of the Confidential Information that the Receiving Party is legally required to disclose, as advised by its legal counsel. Any Confidential Information disclosed pursuant to a Legal Requirement shall continue to be treated as Confidential Information for all other purposes under this Agreement.

4. Term and Duration

This Agreement shall become effective as of the Effective Date and shall remain in full force and effect until terminated by either Party upon thirty (30) days' prior written notice to the other Party. Notwithstanding any termination or expiration of this Agreement, the Receiving Party's obligations of confidentiality with respect to all Confidential Information disclosed during the term of this Agreement shall survive and continue for a period as specified below from the date of disclosure of each item of Confidential Information.

5. Return of Materials

Upon the termination or expiration of this Agreement, or upon the written request of the Disclosing Party at any time, the Receiving Party shall promptly: (a) return to the Disclosing Party all originals and copies of any documents, materials, and other tangible items containing or embodying Confidential Information; or (b) at the Disclosing Party's option, destroy all such documents, materials, and tangible items and provide the Disclosing Party with a written certification signed by an authorized officer of the Receiving Party confirming that all such materials have been destroyed. Notwithstanding the foregoing, the Receiving Party may retain one (1) archival copy of the Confidential Information solely for the purpose of monitoring its ongoing obligations under this Agreement, and any Confidential Information retained in routine backup systems shall be subject to the continuing confidentiality obligations of this Agreement.

6. No License or Warranty

Nothing in this Agreement shall be construed as granting to the Receiving Party any license, right, title, or interest in or to the Confidential Information, or any patent, copyright, trademark, trade secret, or other intellectual property right of the Disclosing Party. All Confidential Information shall remain the sole and exclusive property of the Disclosing Party. The Disclosing Party makes no representation or warranty, express or implied, as to the accuracy, completeness, or fitness for any particular purpose of the Confidential Information. The Receiving Party acknowledges that it shall use the Confidential Information at its own risk.

7. Remedies

The Receiving Party acknowledges and agrees that any breach or threatened breach of this Agreement may cause irreparable harm to the Disclosing Party for which monetary damages alone would be an inadequate remedy. Accordingly, the Disclosing Party shall be entitled to seek equitable relief, including injunction and specific performance, in addition to all other remedies available at law or in equity, without the necessity of proving actual damages or posting any bond or other security. Such equitable relief shall not be deemed to be the exclusive remedy for any breach of this Agreement, but shall be in addition to all other remedies available at law or in equity.

8. Governing Law and Jurisdiction

This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of [state_law], without regard to its conflict of laws principles. Each Party irrevocably consents to the exclusive jurisdiction and venue of the state and federal courts located in the State of [state_law] for the adjudication of any dispute arising out of or relating to this Agreement, and each Party hereby irrevocably waives any objection it may have to such jurisdiction or venue, including any objection based on inconvenient forum.

9. Miscellaneous

9.1 Entire Agreement. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations, and discussions, whether oral or written, between the Parties relating to the subject matter hereof. 9.2 Severability. If any provision of this Agreement is held to be invalid, illegal, or unenforceable by a court of competent jurisdiction, such provision shall be modified to the minimum extent necessary to make it valid, legal, and enforceable, and the remaining provisions of this Agreement shall continue in full force and effect. 9.3 Amendment. This Agreement may not be amended, modified, or supplemented except by a written instrument signed by both Parties. 9.4 Waiver. No waiver of any provision of this Agreement shall be effective unless made in writing and signed by the waiving Party. The failure of either Party to enforce any provision of this Agreement shall not constitute a waiver of that Party's right to enforce that provision or any other provision of this Agreement in the future. 9.5 Assignment. The Receiving Party may not assign or transfer this Agreement, or any rights or obligations hereunder, without the prior written consent of the Disclosing Party. Any attempted assignment in violation of this provision shall be void and of no effect. 9.6 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. 9.7 Notices. All notices, requests, demands, and other communications required or permitted under this Agreement shall be in writing and shall be deemed given when delivered personally, sent by confirmed electronic mail, or sent by nationally recognized overnight courier to the addresses of the Parties as set forth in the preamble of this Agreement, or to such other address as either Party may designate in writing.

Additional Provisions

NY SHIELD Act Data Security Warranty

The Receiving Party represents and warrants that it has implemented and will maintain administrative, technical, and physical safeguards for the protection of all Confidential Tax Information as required by the NY SHIELD Act (N.Y. Gen. Bus. Law § 899-aa and § 899-bb). These safeguards shall be at least as rigorous as those mandated for tax preparation firms under the Gramm-Leach-Bliley Act. In the event of any unauthorized acquisition of unencrypted computerized data that compromises the security, confidentiality, or integrity of client tax records, the Receiving Party shall notify the Disclosing Party within the timeframe required by the NY SHIELD Act and cooperate fully in any required breach notification to affected New York residents. This warranty survives termination of the agreement and any subsequent IRS audits or investigations. Failure to maintain these safeguards constitutes a material breach and triggers the remedies set forth herein, including indemnification for any civil penalties imposed by the New York Attorney General or the Department of Taxation and Finance.

Compliance with Treasury Circular 230 and PTIN Obligations

Both parties acknowledge that the Disclosing Party is a tax preparation firm operating under a valid Preparer Tax Identification Number (PTIN) issued by the Internal Revenue Service and is subject to the duties and restrictions contained in Treasury Department Circular 230. The Receiving Party agrees that any access to client tax returns, workpapers, or client lists shall be used solely for the limited purposes authorized by this Agreement and shall not be used in any manner that could violate Circular 230 standards of practice before the IRS. The Receiving Party further covenants that it will not engage in any conduct that could subject the Disclosing Party to IRS penalties for improper disclosure of taxpayer information under IRC § 7216. This provision is intended to protect against both federal regulatory sanctions and parallel enforcement actions under New York State tax laws. Any violation of this clause shall be considered an irreparable harm justifying immediate injunctive relief in addition to monetary damages.

Limitation of Liability Aligned with New York Labor Law and E&O Standards

Notwithstanding any other provision, the total liability of either party arising out of or relating to any breach of this Non-Disclosure Agreement for tax preparation firm in New York shall not exceed the amount of professional liability insurance coverage maintained by the Disclosing Party, which coverage complies with industry standards for New York tax practitioners. This limitation shall not apply to breaches involving willful misconduct or gross negligence. The parties agree that this cap is reasonable given the nature of tax preparation services and the potential for amplified damages under the NY SHIELD Act. This clause is drafted to be consistent with New York’s public policy on limitation-of-liability provisions as interpreted under N.Y. Gen. Oblig. Law and relevant case law governing professional service agreements. The Receiving Party acknowledges that the Disclosing Party’s Errors and Omissions insurance policy may contain specific notice and cooperation requirements that must be followed in the event of a claim involving disclosed confidential tax information.

Return and Destruction of Tax Records with Audit Trail

Upon termination or expiration of this Agreement, or at any time upon written request, the Receiving Party shall, within forty-five (45) days, return or securely destroy all documents and electronic files containing Confidential Tax Information, including all copies, extracts, and summaries. Destruction must follow NIST SP 800-88 guidelines and include provision of a written certification of deletion signed by an officer of the Receiving Party. For any information stored in backup systems, the Receiving Party shall continue to protect such data under the terms of this Agreement until the next scheduled purge cycle. This requirement is imposed to satisfy both IRS record-retention rules under Circular 230 and the affirmative data-security obligations imposed on businesses by the NY SHIELD Act. The Receiving Party shall maintain a detailed audit trail documenting the return or destruction process for a minimum of six (6) years to enable the Disclosing Party to demonstrate compliance during any future New York State regulatory inquiry or client dispute.

Additional Details

Types of Client Tax Information Covered:

[client tax data types]

Third-Party Recipients (e.g., Software Vendors): [third party vendors]
Data Breach Notification Period (Days): [data breach notification period]
Your Firm's PTIN: [ptin number]
Confirm NY SHIELD Act Safeguards Are in Place: No
Permitted Disclosures to Tax Authorities: [permitted irs disclosures]
Errors & Omissions Insurance Carrier: [e and o carrier]
Return or Destroy Confidential Materials (Days After Termination): [return or destroy period]

IN WITNESS WHEREOF, the Parties have executed this Non-Disclosure Agreement as of the date first written above.

Disclosing Party

Name: Disclosing Party

Date: ___________________

Receiving Party

Name: Receiving Party

Date: ___________________

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Customize your Non-Disclosure Agreement

17 fields · Takes about 2 minutes

Terms

Be specific: trade secrets, client lists, financial data, proprietary processes, etc.

Parties
Signatures

List the specific categories of tax documents and financial data this NDA must protect. Reference any proprietary deduction methodologies unique to your firm.

Identify any external parties who will receive confidential client tax data under this agreement.

Number of days after discovery within which the receiving party must notify you of any potential breach, consistent with NY SHIELD Act timing.

Enter your Preparer Tax Identification Number issued by the IRS. Required for all compensated tax preparation activities.

Name of your E&O carrier. Helps receiving parties assess your risk mitigation practices.

Non-Disclosure Agreement

Legal Document

This Non-Disclosure Agreement (this "Agreement") is entered into as of [effective_date] (the "Effective Date"), by and between [disclosing_party] (the "Disclosing Party") and [receiving_party] (the "Receiving Party"). The Disclosing Party and the Receiving Party may be referred to herein individually as a "Party" and collectively as the "Parties."

WHEREAS, the Disclosing Party possesses certain confidential and proprietary information relating to its business, operations, products, services, research, development, technical data, trade secrets, and other matters (collectively, "Confidential Information"); and

WHEREAS, the Receiving Party desires to receive, and the Disclosing Party is willing to disclose, certain Confidential Information for the purpose of evaluating or pursuing a potential business relationship between the Parties (the "Purpose"); and

WHEREAS, as a condition to the disclosure of such Confidential Information, the Disclosing Party requires that the Receiving Party agree to maintain the confidentiality of such information in accordance with the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1. Definition of Confidential Information

"Confidential Information" means any and all non-public information, in any form or medium, whether written, oral, electronic, visual, or otherwise, that is disclosed by the Disclosing Party to the Receiving Party, either directly or indirectly, including but not limited to: [confidential_info]. Confidential Information shall also include any notes, analyses, compilations, studies, summaries, or other materials prepared by the Receiving Party that contain, reflect, or are derived from Confidential Information. Confidential Information shall not include information that: (a) is or becomes generally available to the public through no fault, act, or omission of the Receiving Party; (b) was already in the Receiving Party's possession without restriction prior to disclosure by the Disclosing Party, as evidenced by the Receiving Party's written records; (c) is independently developed by the Receiving Party without use of or reference to the Confidential Information, as evidenced by the Receiving Party's written records; or (d) is obtained by the Receiving Party from a third party who is not, to the Receiving Party's knowledge, under any obligation of confidentiality with respect to such information.

2. Obligations of Receiving Party

The Receiving Party agrees that it shall: (a) hold the Confidential Information in strict confidence and protect it with at least the same degree of care that it uses to protect its own confidential and proprietary information, but in no event less than a reasonable degree of care; (b) not disclose, publish, or otherwise disseminate the Confidential Information to any third party without the prior written consent of the Disclosing Party; (c) use the Confidential Information solely for the Purpose and not for any other purpose whatsoever; (d) limit access to the Confidential Information to those of its employees, officers, directors, agents, advisors, and representatives (collectively, "Representatives") who have a need to know such information for the Purpose and who are bound by obligations of confidentiality no less restrictive than those contained herein; and (e) be responsible for any breach of this Agreement by any of its Representatives. The Receiving Party shall promptly notify the Disclosing Party in writing upon discovery of any unauthorized use or disclosure of Confidential Information.

3. Permitted Disclosures

Notwithstanding anything to the contrary in this Agreement, the Receiving Party may disclose Confidential Information to the extent required by applicable law, regulation, or valid court order or subpoena (a "Legal Requirement"), provided that the Receiving Party: (a) provides the Disclosing Party with prompt written notice of such Legal Requirement prior to disclosure (to the extent legally permissible), so that the Disclosing Party may seek a protective order or other appropriate remedy; (b) cooperates with the Disclosing Party, at the Disclosing Party's expense, in seeking such protective order or other remedy; and (c) discloses only that portion of the Confidential Information that the Receiving Party is legally required to disclose, as advised by its legal counsel. Any Confidential Information disclosed pursuant to a Legal Requirement shall continue to be treated as Confidential Information for all other purposes under this Agreement.

4. Term and Duration

This Agreement shall become effective as of the Effective Date and shall remain in full force and effect until terminated by either Party upon thirty (30) days' prior written notice to the other Party. Notwithstanding any termination or expiration of this Agreement, the Receiving Party's obligations of confidentiality with respect to all Confidential Information disclosed during the term of this Agreement shall survive and continue for a period as specified below from the date of disclosure of each item of Confidential Information.

5. Return of Materials

Upon the termination or expiration of this Agreement, or upon the written request of the Disclosing Party at any time, the Receiving Party shall promptly: (a) return to the Disclosing Party all originals and copies of any documents, materials, and other tangible items containing or embodying Confidential Information; or (b) at the Disclosing Party's option, destroy all such documents, materials, and tangible items and provide the Disclosing Party with a written certification signed by an authorized officer of the Receiving Party confirming that all such materials have been destroyed. Notwithstanding the foregoing, the Receiving Party may retain one (1) archival copy of the Confidential Information solely for the purpose of monitoring its ongoing obligations under this Agreement, and any Confidential Information retained in routine backup systems shall be subject to the continuing confidentiality obligations of this Agreement.

6. No License or Warranty

Nothing in this Agreement shall be construed as granting to the Receiving Party any license, right, title, or interest in or to the Confidential Information, or any patent, copyright, trademark, trade secret, or other intellectual property right of the Disclosing Party. All Confidential Information shall remain the sole and exclusive property of the Disclosing Party. The Disclosing Party makes no representation or warranty, express or implied, as to the accuracy, completeness, or fitness for any particular purpose of the Confidential Information. The Receiving Party acknowledges that it shall use the Confidential Information at its own risk.

7. Remedies

The Receiving Party acknowledges and agrees that any breach or threatened breach of this Agreement may cause irreparable harm to the Disclosing Party for which monetary damages alone would be an inadequate remedy. Accordingly, the Disclosing Party shall be entitled to seek equitable relief, including injunction and specific performance, in addition to all other remedies available at law or in equity, without the necessity of proving actual damages or posting any bond or other security. Such equitable relief shall not be deemed to be the exclusive remedy for any breach of this Agreement, but shall be in addition to all other remedies available at law or in equity.

8. Governing Law and Jurisdiction

This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of [state_law], without regard to its conflict of laws principles. Each Party irrevocably consents to the exclusive jurisdiction and venue of the state and federal courts located in the State of [state_law] for the adjudication of any dispute arising out of or relating to this Agreement, and each Party hereby irrevocably waives any objection it may have to such jurisdiction or venue, including any objection based on inconvenient forum.

9. Miscellaneous

9.1 Entire Agreement. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations, and discussions, whether oral or written, between the Parties relating to the subject matter hereof. 9.2 Severability. If any provision of this Agreement is held to be invalid, illegal, or unenforceable by a court of competent jurisdiction, such provision shall be modified to the minimum extent necessary to make it valid, legal, and enforceable, and the remaining provisions of this Agreement shall continue in full force and effect. 9.3 Amendment. This Agreement may not be amended, modified, or supplemented except by a written instrument signed by both Parties. 9.4 Waiver. No waiver of any provision of this Agreement shall be effective unless made in writing and signed by the waiving Party. The failure of either Party to enforce any provision of this Agreement shall not constitute a waiver of that Party's right to enforce that provision or any other provision of this Agreement in the future. 9.5 Assignment. The Receiving Party may not assign or transfer this Agreement, or any rights or obligations hereunder, without the prior written consent of the Disclosing Party. Any attempted assignment in violation of this provision shall be void and of no effect. 9.6 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. 9.7 Notices. All notices, requests, demands, and other communications required or permitted under this Agreement shall be in writing and shall be deemed given when delivered personally, sent by confirmed electronic mail, or sent by nationally recognized overnight courier to the addresses of the Parties as set forth in the preamble of this Agreement, or to such other address as either Party may designate in writing.

Additional Provisions

NY SHIELD Act Data Security Warranty

The Receiving Party represents and warrants that it has implemented and will maintain administrative, technical, and physical safeguards for the protection of all Confidential Tax Information as required by the NY SHIELD Act (N.Y. Gen. Bus. Law § 899-aa and § 899-bb). These safeguards shall be at least as rigorous as those mandated for tax preparation firms under the Gramm-Leach-Bliley Act. In the event of any unauthorized acquisition of unencrypted computerized data that compromises the security, confidentiality, or integrity of client tax records, the Receiving Party shall notify the Disclosing Party within the timeframe required by the NY SHIELD Act and cooperate fully in any required breach notification to affected New York residents. This warranty survives termination of the agreement and any subsequent IRS audits or investigations. Failure to maintain these safeguards constitutes a material breach and triggers the remedies set forth herein, including indemnification for any civil penalties imposed by the New York Attorney General or the Department of Taxation and Finance.

Compliance with Treasury Circular 230 and PTIN Obligations

Both parties acknowledge that the Disclosing Party is a tax preparation firm operating under a valid Preparer Tax Identification Number (PTIN) issued by the Internal Revenue Service and is subject to the duties and restrictions contained in Treasury Department Circular 230. The Receiving Party agrees that any access to client tax returns, workpapers, or client lists shall be used solely for the limited purposes authorized by this Agreement and shall not be used in any manner that could violate Circular 230 standards of practice before the IRS. The Receiving Party further covenants that it will not engage in any conduct that could subject the Disclosing Party to IRS penalties for improper disclosure of taxpayer information under IRC § 7216. This provision is intended to protect against both federal regulatory sanctions and parallel enforcement actions under New York State tax laws. Any violation of this clause shall be considered an irreparable harm justifying immediate injunctive relief in addition to monetary damages.

Limitation of Liability Aligned with New York Labor Law and E&O Standards

Notwithstanding any other provision, the total liability of either party arising out of or relating to any breach of this Non-Disclosure Agreement for tax preparation firm in New York shall not exceed the amount of professional liability insurance coverage maintained by the Disclosing Party, which coverage complies with industry standards for New York tax practitioners. This limitation shall not apply to breaches involving willful misconduct or gross negligence. The parties agree that this cap is reasonable given the nature of tax preparation services and the potential for amplified damages under the NY SHIELD Act. This clause is drafted to be consistent with New York’s public policy on limitation-of-liability provisions as interpreted under N.Y. Gen. Oblig. Law and relevant case law governing professional service agreements. The Receiving Party acknowledges that the Disclosing Party’s Errors and Omissions insurance policy may contain specific notice and cooperation requirements that must be followed in the event of a claim involving disclosed confidential tax information.

Return and Destruction of Tax Records with Audit Trail

Upon termination or expiration of this Agreement, or at any time upon written request, the Receiving Party shall, within forty-five (45) days, return or securely destroy all documents and electronic files containing Confidential Tax Information, including all copies, extracts, and summaries. Destruction must follow NIST SP 800-88 guidelines and include provision of a written certification of deletion signed by an officer of the Receiving Party. For any information stored in backup systems, the Receiving Party shall continue to protect such data under the terms of this Agreement until the next scheduled purge cycle. This requirement is imposed to satisfy both IRS record-retention rules under Circular 230 and the affirmative data-security obligations imposed on businesses by the NY SHIELD Act. The Receiving Party shall maintain a detailed audit trail documenting the return or destruction process for a minimum of six (6) years to enable the Disclosing Party to demonstrate compliance during any future New York State regulatory inquiry or client dispute.

Additional Details

Types of Client Tax Information Covered:

[client tax data types]

Third-Party Recipients (e.g., Software Vendors): [third party vendors]
Data Breach Notification Period (Days): [data breach notification period]
Your Firm's PTIN: [ptin number]
Confirm NY SHIELD Act Safeguards Are in Place: No
Permitted Disclosures to Tax Authorities: [permitted irs disclosures]
Errors & Omissions Insurance Carrier: [e and o carrier]
Return or Destroy Confidential Materials (Days After Termination): [return or destroy period]

IN WITNESS WHEREOF, the Parties have executed this Non-Disclosure Agreement as of the date first written above.

Disclosing Party

Name: Disclosing Party

Date: ___________________

Receiving Party

Name: Receiving Party

Date: ___________________

Non-Disclosure Agreement

Legal Document

This Non-Disclosure Agreement (this "Agreement") is entered into as of [effective_date] (the "Effective Date"), by and between [disclosing_party] (the "Disclosing Party") and [receiving_party] (the "Receiving Party"). The Disclosing Party and the Receiving Party may be referred to herein individually as a "Party" and collectively as the "Parties."

WHEREAS, the Disclosing Party possesses certain confidential and proprietary information relating to its business, operations, products, services, research, development, technical data, trade secrets, and other matters (collectively, "Confidential Information"); and

WHEREAS, the Receiving Party desires to receive, and the Disclosing Party is willing to disclose, certain Confidential Information for the purpose of evaluating or pursuing a potential business relationship between the Parties (the "Purpose"); and

WHEREAS, as a condition to the disclosure of such Confidential Information, the Disclosing Party requires that the Receiving Party agree to maintain the confidentiality of such information in accordance with the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1. Definition of Confidential Information

"Confidential Information" means any and all non-public information, in any form or medium, whether written, oral, electronic, visual, or otherwise, that is disclosed by the Disclosing Party to the Receiving Party, either directly or indirectly, including but not limited to: [confidential_info]. Confidential Information shall also include any notes, analyses, compilations, studies, summaries, or other materials prepared by the Receiving Party that contain, reflect, or are derived from Confidential Information. Confidential Information shall not include information that: (a) is or becomes generally available to the public through no fault, act, or omission of the Receiving Party; (b) was already in the Receiving Party's possession without restriction prior to disclosure by the Disclosing Party, as evidenced by the Receiving Party's written records; (c) is independently developed by the Receiving Party without use of or reference to the Confidential Information, as evidenced by the Receiving Party's written records; or (d) is obtained by the Receiving Party from a third party who is not, to the Receiving Party's knowledge, under any obligation of confidentiality with respect to such information.

2. Obligations of Receiving Party

The Receiving Party agrees that it shall: (a) hold the Confidential Information in strict confidence and protect it with at least the same degree of care that it uses to protect its own confidential and proprietary information, but in no event less than a reasonable degree of care; (b) not disclose, publish, or otherwise disseminate the Confidential Information to any third party without the prior written consent of the Disclosing Party; (c) use the Confidential Information solely for the Purpose and not for any other purpose whatsoever; (d) limit access to the Confidential Information to those of its employees, officers, directors, agents, advisors, and representatives (collectively, "Representatives") who have a need to know such information for the Purpose and who are bound by obligations of confidentiality no less restrictive than those contained herein; and (e) be responsible for any breach of this Agreement by any of its Representatives. The Receiving Party shall promptly notify the Disclosing Party in writing upon discovery of any unauthorized use or disclosure of Confidential Information.

3. Permitted Disclosures

Notwithstanding anything to the contrary in this Agreement, the Receiving Party may disclose Confidential Information to the extent required by applicable law, regulation, or valid court order or subpoena (a "Legal Requirement"), provided that the Receiving Party: (a) provides the Disclosing Party with prompt written notice of such Legal Requirement prior to disclosure (to the extent legally permissible), so that the Disclosing Party may seek a protective order or other appropriate remedy; (b) cooperates with the Disclosing Party, at the Disclosing Party's expense, in seeking such protective order or other remedy; and (c) discloses only that portion of the Confidential Information that the Receiving Party is legally required to disclose, as advised by its legal counsel. Any Confidential Information disclosed pursuant to a Legal Requirement shall continue to be treated as Confidential Information for all other purposes under this Agreement.

4. Term and Duration

This Agreement shall become effective as of the Effective Date and shall remain in full force and effect until terminated by either Party upon thirty (30) days' prior written notice to the other Party. Notwithstanding any termination or expiration of this Agreement, the Receiving Party's obligations of confidentiality with respect to all Confidential Information disclosed during the term of this Agreement shall survive and continue for a period as specified below from the date of disclosure of each item of Confidential Information.

5. Return of Materials

Upon the termination or expiration of this Agreement, or upon the written request of the Disclosing Party at any time, the Receiving Party shall promptly: (a) return to the Disclosing Party all originals and copies of any documents, materials, and other tangible items containing or embodying Confidential Information; or (b) at the Disclosing Party's option, destroy all such documents, materials, and tangible items and provide the Disclosing Party with a written certification signed by an authorized officer of the Receiving Party confirming that all such materials have been destroyed. Notwithstanding the foregoing, the Receiving Party may retain one (1) archival copy of the Confidential Information solely for the purpose of monitoring its ongoing obligations under this Agreement, and any Confidential Information retained in routine backup systems shall be subject to the continuing confidentiality obligations of this Agreement.

6. No License or Warranty

Nothing in this Agreement shall be construed as granting to the Receiving Party any license, right, title, or interest in or to the Confidential Information, or any patent, copyright, trademark, trade secret, or other intellectual property right of the Disclosing Party. All Confidential Information shall remain the sole and exclusive property of the Disclosing Party. The Disclosing Party makes no representation or warranty, express or implied, as to the accuracy, completeness, or fitness for any particular purpose of the Confidential Information. The Receiving Party acknowledges that it shall use the Confidential Information at its own risk.

7. Remedies

The Receiving Party acknowledges and agrees that any breach or threatened breach of this Agreement may cause irreparable harm to the Disclosing Party for which monetary damages alone would be an inadequate remedy. Accordingly, the Disclosing Party shall be entitled to seek equitable relief, including injunction and specific performance, in addition to all other remedies available at law or in equity, without the necessity of proving actual damages or posting any bond or other security. Such equitable relief shall not be deemed to be the exclusive remedy for any breach of this Agreement, but shall be in addition to all other remedies available at law or in equity.

8. Governing Law and Jurisdiction

This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of [state_law], without regard to its conflict of laws principles. Each Party irrevocably consents to the exclusive jurisdiction and venue of the state and federal courts located in the State of [state_law] for the adjudication of any dispute arising out of or relating to this Agreement, and each Party hereby irrevocably waives any objection it may have to such jurisdiction or venue, including any objection based on inconvenient forum.

9. Miscellaneous

9.1 Entire Agreement. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations, and discussions, whether oral or written, between the Parties relating to the subject matter hereof. 9.2 Severability. If any provision of this Agreement is held to be invalid, illegal, or unenforceable by a court of competent jurisdiction, such provision shall be modified to the minimum extent necessary to make it valid, legal, and enforceable, and the remaining provisions of this Agreement shall continue in full force and effect. 9.3 Amendment. This Agreement may not be amended, modified, or supplemented except by a written instrument signed by both Parties. 9.4 Waiver. No waiver of any provision of this Agreement shall be effective unless made in writing and signed by the waiving Party. The failure of either Party to enforce any provision of this Agreement shall not constitute a waiver of that Party's right to enforce that provision or any other provision of this Agreement in the future. 9.5 Assignment. The Receiving Party may not assign or transfer this Agreement, or any rights or obligations hereunder, without the prior written consent of the Disclosing Party. Any attempted assignment in violation of this provision shall be void and of no effect. 9.6 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. 9.7 Notices. All notices, requests, demands, and other communications required or permitted under this Agreement shall be in writing and shall be deemed given when delivered personally, sent by confirmed electronic mail, or sent by nationally recognized overnight courier to the addresses of the Parties as set forth in the preamble of this Agreement, or to such other address as either Party may designate in writing.

Additional Provisions

NY SHIELD Act Data Security Warranty

The Receiving Party represents and warrants that it has implemented and will maintain administrative, technical, and physical safeguards for the protection of all Confidential Tax Information as required by the NY SHIELD Act (N.Y. Gen. Bus. Law § 899-aa and § 899-bb). These safeguards shall be at least as rigorous as those mandated for tax preparation firms under the Gramm-Leach-Bliley Act. In the event of any unauthorized acquisition of unencrypted computerized data that compromises the security, confidentiality, or integrity of client tax records, the Receiving Party shall notify the Disclosing Party within the timeframe required by the NY SHIELD Act and cooperate fully in any required breach notification to affected New York residents. This warranty survives termination of the agreement and any subsequent IRS audits or investigations. Failure to maintain these safeguards constitutes a material breach and triggers the remedies set forth herein, including indemnification for any civil penalties imposed by the New York Attorney General or the Department of Taxation and Finance.

Compliance with Treasury Circular 230 and PTIN Obligations

Both parties acknowledge that the Disclosing Party is a tax preparation firm operating under a valid Preparer Tax Identification Number (PTIN) issued by the Internal Revenue Service and is subject to the duties and restrictions contained in Treasury Department Circular 230. The Receiving Party agrees that any access to client tax returns, workpapers, or client lists shall be used solely for the limited purposes authorized by this Agreement and shall not be used in any manner that could violate Circular 230 standards of practice before the IRS. The Receiving Party further covenants that it will not engage in any conduct that could subject the Disclosing Party to IRS penalties for improper disclosure of taxpayer information under IRC § 7216. This provision is intended to protect against both federal regulatory sanctions and parallel enforcement actions under New York State tax laws. Any violation of this clause shall be considered an irreparable harm justifying immediate injunctive relief in addition to monetary damages.

Limitation of Liability Aligned with New York Labor Law and E&O Standards

Notwithstanding any other provision, the total liability of either party arising out of or relating to any breach of this Non-Disclosure Agreement for tax preparation firm in New York shall not exceed the amount of professional liability insurance coverage maintained by the Disclosing Party, which coverage complies with industry standards for New York tax practitioners. This limitation shall not apply to breaches involving willful misconduct or gross negligence. The parties agree that this cap is reasonable given the nature of tax preparation services and the potential for amplified damages under the NY SHIELD Act. This clause is drafted to be consistent with New York’s public policy on limitation-of-liability provisions as interpreted under N.Y. Gen. Oblig. Law and relevant case law governing professional service agreements. The Receiving Party acknowledges that the Disclosing Party’s Errors and Omissions insurance policy may contain specific notice and cooperation requirements that must be followed in the event of a claim involving disclosed confidential tax information.

Return and Destruction of Tax Records with Audit Trail

Upon termination or expiration of this Agreement, or at any time upon written request, the Receiving Party shall, within forty-five (45) days, return or securely destroy all documents and electronic files containing Confidential Tax Information, including all copies, extracts, and summaries. Destruction must follow NIST SP 800-88 guidelines and include provision of a written certification of deletion signed by an officer of the Receiving Party. For any information stored in backup systems, the Receiving Party shall continue to protect such data under the terms of this Agreement until the next scheduled purge cycle. This requirement is imposed to satisfy both IRS record-retention rules under Circular 230 and the affirmative data-security obligations imposed on businesses by the NY SHIELD Act. The Receiving Party shall maintain a detailed audit trail documenting the return or destruction process for a minimum of six (6) years to enable the Disclosing Party to demonstrate compliance during any future New York State regulatory inquiry or client dispute.

Additional Details

Types of Client Tax Information Covered:

[client tax data types]

Third-Party Recipients (e.g., Software Vendors): [third party vendors]
Data Breach Notification Period (Days): [data breach notification period]
Your Firm's PTIN: [ptin number]
Confirm NY SHIELD Act Safeguards Are in Place: No
Permitted Disclosures to Tax Authorities: [permitted irs disclosures]
Errors & Omissions Insurance Carrier: [e and o carrier]
Return or Destroy Confidential Materials (Days After Termination): [return or destroy period]

IN WITNESS WHEREOF, the Parties have executed this Non-Disclosure Agreement as of the date first written above.

Disclosing Party

Name: Disclosing Party

Date: ___________________

Receiving Party

Name: Receiving Party

Date: ___________________

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Why You Need This Non-Disclosure Agreement

Tax preparation firms in New York routinely handle highly sensitive client data including W-2s, 1099s, depreciation schedules, and amended return details. A non-disclosure agreement for tax preparation firm in New York is essential because firms servicing high-net-worth individuals and small businesses are frequently sued when a data breach exposes Social Security numbers or estimated tax payment records, triggering identity theft claims and IRS penalties. Under the NY SHIELD Act, any business handling New York residents’ private information must maintain reasonable safeguards; failure to do so can result in fines and class-action litigation. This NDA clearly defines what constitutes confidential tax information, imposes strict obligations on receiving parties such as subcontractors or software vendors, and limits permitted disclosures to those required by law or IRS Circular 230. It also addresses common contractual pain points like liability limitations for errors and omissions and breach of confidentiality. By using this document, your New York tax preparation firm can demonstrate compliance with Gramm-Leach-Bliley Act safeguards, reduce E&O liability exposure, and protect proprietary client lists and deduction strategies. Without a properly drafted NDA that references New York’s specific statutes, you risk unenforceable protections and regulatory scrutiny from the New York State Board of Accountancy or the Department of Taxation and Finance. Our generator produces an enforceable agreement that meets N.Y. Gen. Oblig. Law § 5-701 writing requirements and survives post-employment challenges under New York Labor Law.

Confidentiality & Trade Secret Protections

What This NDA Protects

Beyond the standard non-disclosure agreement sections, this template adds fields specific to Tax Preparation Firm:

+Types of Client Tax Information Covered
+Third-Party Recipients (e.g., Software Vendors)
+Data Breach Notification Period (Days)
+Your Firm's PTIN
+Confirm NY SHIELD Act Safeguards Are in Place
+Permitted Disclosures to Tax Authorities
+Errors & Omissions Insurance Carrier
+Return or Destroy Confidential Materials (Days After Termination)

The core legal purpose of a Non-Disclosure Agreement (NDA) is to establish a legal framework to protect confidential and proprietary information shared between parties. It restricts the unauthorized disclosure or use of such information, thereby enabling parties to collaborate, negotiate, or explore business opportunities while safeguarding sensitive information.

Disclosure Risks in Your Industry

Breach of Confidentiality

Implement and maintain Data Protection Policies, comply with GLBA requirements, and use confidentiality agreements to protect client data.

Trade Secret Law in New York

N.Y. Gen. Oblig. Law § 5-701 — This statute is New York's version of the Statute of Frauds, requiring certain contracts to be in writing to be enforceable, such as agreements not to be performed within one year, real estate transactions, and promises to pay the debt of another.
N.Y. U.C.C. § 2-201 — Similar to the UCC § 2-201, this provision requires a written contract for the sale of goods priced at $500 or more, with certain exceptions. Unique to New York, the interpretation of 'sufficient writing' and certain merchant-specific rules might slightly differ.

What Makes This NDA Enforceable

For this non-disclosure agreement to be legally valid:

  • +The document must be signed by both parties to manifest mutual consent.
  • +Clear identification of the parties involved must be present.
  • +Consideration must be present, which could be mutual disclosure or as part of another contract.
  • +The agreement should be in writing to satisfy SOF (Statute of Frauds) requirements in contexts involving trade secrets.
  • +In some states, NDAs involving employees may need to be signed with additional consideration if presented after the start of employment.

Common mistakes to avoid:

  • !Failing to clearly define what constitutes 'Confidential Information', leading to ambiguities.
  • !Not specifying the duration of the confidentiality obligation, which can result in indefinite or unenforceable terms.
  • !Excluding a clear description of what happens to confidential information after the termination of the agreement.
  • !Omitting jurisdiction and governing law which can lead to complexities in case of legal disputes.
  • !Neglecting to include remedies for breach which can limit legal recourse.

New York-Specific Provisions to Watch

  • +NY SHIELD Act, which mandates data security requirements for businesses and applies to personal information of New York residents.
  • +New York City Local Laws such as the Freelance Isn't Free Act, which protects freelancers from non-payment and retaliation.
  • +Unique lien laws including the New York Mechanic's Lien Law, which has specific procedural requirements to enforce a lien.
  • +New York's Privacy Laws include stringent rules on data breaches and consumer protection not found in all states.
  • +New York has specific rent regulations and tenant rights laws, especially within New York City, affecting lease agreements.

Regulations Tax Preparation Firm Must Know

Internal Revenue Code (IRC)

Governs all federal tax-related activities including tax preparation. Tax preparers must comply with the rules and standards defined by the IRS under the IRC.

Enforced by Internal Revenue Service (IRS)

Treasury Department Circular 230

Sets forth regulations governing practice before the IRS, including the duties and restrictions relating to tax preparers and standards of competence.

Enforced by U.S. Department of the Treasury

Gramm-Leach-Bliley Act (GLBA)

Requires tax preparers to protect the privacy of consumer financial information, specifically ensuring safeguards for client data.

Enforced by Federal Trade Commission (FTC)

State Board of Accountancy Regulations

State-specific regulations which may require registration of tax preparation firms, especially if they offer CPA services.

Enforced by State Board of Accountancy

Licensing & Insurance for Tax Preparation Firm

  • +Obtain a Preparer Tax Identification Number (PTIN) from the IRS to legally prepare tax returns for compensation.
  • +In some states, registration with the state's consumer protection unit or tax authority may be required.
  • +If offering CPA services, licensing as a CPA by the relevant State Board of Accountancy is necessary.

Recommended coverage: Errors and Omissions (E&O) Insurance · General Liability Insurance · Cyber Liability Insurance · Fidelity Bonds

Contract Pitfalls Specific to Tax Preparation Firm

  • !Scope of Services: Clearly defining the scope of work to avoid disputes related to unspecified tasks or services.
  • !Fee Disputes: Clear delineation of how fees are calculated and when payments are due can alleviate conflicts.
  • !Liability Limitations: Establishing limits on liability in the event of errors or omissions in tax preparation.
  • !Confidentiality and Data Security: Clearly defined obligations for protecting client data and the implications of data breaches.
  • !Dispute Resolution: Specifying the mode of dispute resolution (e.g., arbitration or litigation) and applicable law.

Frequently Asked Questions

01

Why does a tax preparation firm in New York need a specific non-disclosure agreement?

Tax preparers in New York must comply with the NY SHIELD Act’s data security mandates and IRS requirements under Treasury Department Circular 230. A tailored non-disclosure agreement for tax preparation firm in New York explicitly covers W-2, 1099, and client deduction data, preventing unauthorized use by vendors or subcontractors and reducing breach-of-confidentiality claims that frequently arise in the industry.

02

What client tax information should be defined as confidential in the NDA?

The agreement should define confidential information to include all tax returns, supporting schedules, estimated tax calculations, depreciation worksheets, amended return data, and any personally identifiable financial information protected under the Gramm-Leach-Bliley Act. For New York firms, it must also reference private information as defined by the NY SHIELD Act to ensure full statutory compliance and avoid IRS penalties.

03

How long should the confidentiality obligations last in a New York tax firm NDA?

For tax preparation firms in New York, the NDA should specify a minimum five-year post-termination confidentiality period, with trade-secret-level client data (such as proprietary deduction strategies) protected perpetually. This duration aligns with industry standards and helps satisfy N.Y. Gen. Oblig. Law § 5-701 enforceability requirements while addressing the long-term nature of IRS audit exposure.

04

Does this NDA help limit liability for a tax preparation firm?

Yes. By incorporating remedies for breach, return-of-materials provisions, and clear exclusions, the agreement reduces exposure to errors and omissions claims and data-breach lawsuits. It also demonstrates reasonable safeguards required by the NY SHIELD Act and GLBA, helping defend against regulatory actions or client litigation common to New York tax practices.

Non-Disclosure Agreement for Tax Preparation Firm by state

State laws affect what must be in this document. Pick your jurisdiction.

  • Florida
  • Georgia
  • Illinois
  • New Jersey
  • Ohio
  • Pennsylvania
  • Texas

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