Do Sponsors Usually Accept CPA Letters for Accredited Investor Verification?

Question

I'm curious about the real-world experience here.

Under one of the SEC's non-exclusive Rule 506(c) verification methods, a CPA can provide written confirmation of accredited investor status if the applicable requirements are met.

But in practice, do most sponsors accept CPA letters, or do some prefer their own verification process?

For those who've invested in 506(c) syndications:

• Was a CPA letter accepted?
• Did the sponsor require specific language?
• Did an existing letter work, or was a new verification required?

Was a CPA letter accepted?

Did the sponsor require specific language?

Did an existing letter work, or was a new verification required?

It seems like confirming the sponsor's requirements upfront could save time and avoid unnecessary sharing of financial information.

I'd be interested in hearing how others have handled it.

Chris Seveney · Answer

We accept cpa letters but most CPA’s are more expensive than paying $30 to have. A service provide you with the verification letter

Evan Polaski · Answer

Having worked for a few 506(c) sponsors, yes we accept CPA letters. I would not say we require specific language, but we certainly turned down a lot of letters that did not explicitly state that investor qualified as accredited.

I.e. I would get a lot that would state: I have prepared [Client X] tax returns for the last 10 yrs. In 2025, my client had an adjusted gross income of $430,650 and in 2024 they had an AGI of $390,760. According to my compliance team, that was great, but needed to finish with something along the lines of: ... and qualifies as an accredited investor per SEC rules.

The bigger issue was the RIA/BD letters that would come in stating [Client x] holds an account with [Company Y] with a balance in excess of $1,000,000. This does not tell me what a client's net worth is, and cannot be accepted. The large investment houses always sent these, and investors would be really annoyed when we said we could not accept that.

Ashish Acharya · Answer

Narasimha, I think the safest approach is to confirm the sponsor's requirements before having the CPA prepare the letter.

A CPA letter can be one of the verification methods used for a 506(c) offering, but I wouldn't assume that an existing generic letter will satisfy every sponsor. I'd ask the sponsor exactly what information they require, whether they have preferred language or a template, and how recently the verification needs to have been completed.

From the CPA side, I'd also want to make sure the verification is based on documentation that actually supports the accredited-investor criteria rather than simply signing a letter based on the investor's representation.

If you're evaluating multiple syndications, I'd keep the verification question separate from the tax due diligence on the investment itself. The K-1 structure, projected taxable income, depreciation, passive losses, tax distributions, and potential phantom income can be just as important once you're actually invested.

Have you already had a sponsor ask you for a CPA letter, or are you trying to understand the process before approaching sponsors?

Do Sponsors Usually Accept CPA Letters for Accredited Investor Verification?

Do Sponsors Usually Accept CPA Letters for Accredited Investor Verification?

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