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Troubleshooting the error Unable to access encrypted Lacerte Tax data

by Lacerte Tax 2022 Updated 9 months ago

When opening Lacerte or when switching tax types, it may fail and present the following error message:

"Unable to access encrypted Lacerte Tax data
Inaccessible encrypted database: C:\Lacerte\YYTax\Idata\data1IYY.dbf*"

*The path and filename may vary.

This error message will appear when the Lacerte program determines that database files are encrypted. They may not actually be encrypted; they may also have been corrupted, or something may be interfering with program access to the database files.

  • This article references default installation paths and uses YY to reference the tax year in 20YY format. C: will always indicate the local drive and X: will always indicate the network drive.

Common causes we've seen for this message include:

Cryptolocker and similar malware will generally encrypt the database and other types of document files, then offer to unencrypt them for a fee. Usually, they leave files such as "DECRYPT.TX" in the folders that contain encrypted files.

While encrypting malware may only seem to infect specific years or tax types that just means it isn't finished yet. It will eventually encrypt all the database and document files that it can find available to the computer.

Any third-party software that synchronizes Lacerte data with another data set, whether cloud-based or local, may interfere with file access and cause this message. It may appear intermittently or consistently. The synchronization should be turned off to test. In some cases, this may require uninstalling the software and rebooting the PC where the software is being run. On a network, it might be running on any workstation or the server.

This includes anti-virus software and some backup software. See Firewall and antivirus software configuration for Lacerte

This is particularly uncommon or can be attributed to one of the above causes. A corrupt database may appear to be an encrypted database. This is likely to affect only one tax type in one year and all workstations.

We do have a repair utility that can fix some minor corruption that may help. If needed, see here.

When the program goes idle on Windows 10 systems for a period of time the network drive can disconnect. When this occurs it needs to be refreshed when a network request is made by the tax program to access the data path. This request doesn't come back in a timely manner so the program errors out attempting to check the encryption.

If you are using Lacerte in a network environment you may need to have your local IT or Network Administrator configure the Windows 10 workstation Registry keys to allow Lacerte through the extra security settings.

This requires modification of the Windows Registry. Serious problems may occur if the registry is modified incorrectly. Intuit strongly recommends having an IT professional make these changes if you are not comfortable with editing the registry. It's also strongly recommended to make a backup of the registry before proceeding. See here for further instruction.

To resolve this issue:

  1. In the Open (Search) field, type Regedit and then click OK.
  2. Using the folders on the left, browse to and select the following:
    • HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows NT\CurrentVersion\Winlogon\GPExtensions\{5794DAFD-BE60-433f-88A2-1A31939AC01F}
  3. Change value "NoBackgroundPolicy" to 1.

If NoBackgroundPolicy does not exist, right-click in the right side panel, point to New and click DWORD Value. Name the new entry NoBackgroundPolicy and repeat step 3.

  1.  Reboot the workstation.

In some instances, the admin may need to take ownership of the registry to add or change the NoBackroundPolicy value. To take ownership and gain full control permissions to the {5794DAFD-BE60-433f-88A2-1A31939AC01F} key:

  1. Right-click {5794DAFD-BE60-433f-88A2-1A31939AC01F} and select Permissions.
  2. Click the Advanced button.
  3. Then click Change next to Owner at the top of the window.
  4. In the Enter the object to select field, type the username of the user that needs to take ownership. Example: JDoe
  5. Click OK
  6. On the Permissions tab, click the Add button.
  7. Click Select a principal.
  8. Type the users username again in the Enter the object name to select field (Example: JDoe) and click OK.
  9. In the Basic Permissions section, click Full Control and then click OK.
  10. Click OK and then OK again. 
  11. Then attempt to modify or add the NoBackgroundPolicy key.

If the network admin can't change the permissions on the registry key to allow the change, Download and install psexec from sysinternals and Use the System Account to run Regedit: psexec -i -d -s c:\windows\regedit.exe in a cmd line, then make the necessary change.

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