1. (1) A licensee who is not prohibited from performing services or receiving consideration or a commission and who is paid or expects to be paid consideration or a commission shall disclose that fact in compliance with the requirements of this rule to any person to whom the licensee recommends or refers a product or service to which the commission relates.
2. (2) Any licensee who accepts consideration or a commission for a referral shall disclose such acceptance or payment to the client in compliance with the requirements of this rule.
3. (3) Any licensee who accepts or agrees to accept a contingent fee shall disclose the terms of such contingent fee to the client in compliance with the requirements of this rule.

4. (4) The disclosure must:

   1. (a) Be in writing and be clear and conspicuous;
   2. (b) State the amount of the consideration or commission or the basis on which it will be computed; and
   3. (c) Be made at or prior to the time of the recommendation or referral of the product or service for which consideration or commission is paid or prior to the client retaining the licensee to whom the client has been referred for which a referral fee is paid; or
   4. (d) Be made prior to the time the licensee undertakes representation of or performance of the service upon which a contingent fee will be charged.
5. (5) The following form may be used to comply with the disclosures required by this rule and Tenn. Code Ann. §§ 62-1-122 and 62-1-123. A form which contains additional information may be used by a licensee if the form includes the minimum disclosure requirements. STATEMENT OF DISCLOSURE OF COMMISSIONS, CONTINGENT FEES, AND OTHER CONSIDERATION Certified public accountants and public accountants are required by law to disclose to clients the receipt or payment of certain commissions and contingent fees. The purpose of this disclosure statement is to acknowledge that proper disclosure has been made and that a copy of this statement has been provided to each of the signatories thereof. I hereby acknowledge that on this___________________ day of ____________________ , 20___ . ________________________________________has disclosed that he/she/the firm will receive/pay a CPA/PA/Firm commission/contingent fee/consideration of ________________________________________________ AMOUNT in relation to goods or services he/she/the firm has agreed to provide or recommend. ______________________________________ ____________________ Client (signature) Date ______________________________________ ____________________ CPA/PA/Firm (signature) Date

Authority: T.C.A. §§ 62-1-105, 62-1-111, 62-1-122, and 62-1-123. Administrative History: Original rule filed June 9, 1981; effective August 18, 1981. Amendment filed February 18, 1993; effective April 3, 1993. Amendment filed February 16, 1998; effective May 2, 1998. Repeal and new rule filed June 10, 1999; effective August 24, 1999. Amendment filed August 15, 2006; effective October 29, 2006.