Clients trust tax professionals with some of their most sensitive personal and financial information. That trust comes with responsibility and increasingly, with legal requirements.
Creating a strong data security plan isn’t just about avoiding cyber threats. It’s about protecting your clients, staying compliant with IRS and FTC regulations, and ensuring your practice is built to last.
Cyberattacks targeting tax professionals have grown in frequency and sophistication. The IRS and FTC have responded with updated regulations that require tax preparers—no matter the size of the firm–to implement written data security plans.
But for many small and mid-sized firms, the concept of a Written Information Security Plan (WISP) can feel overwhelming. Where do you start? What’s actually required? And how do you keep things secure without disrupting your day-to-day workflow?
This guide breaks it all down. You’ll learn what a data security plan includes, how to meet IRS expectations, and how platforms like Suralink help tax professionals simplify compliance while protecting sensitive client information.
Every tax preparer handles sensitive client data—from Social Security numbers to income details on a W-2 to business financials. That makes your firm a target. And with cloud storage, remote work, and digital document sharing now standard, even small vulnerabilities can lead to big consequences.
Consider the impact of:
In 2023, the IRS reminded tax professionals that they are legally obligated to have a data security plan under Publication 4557, and to follow the FTC’s Safeguards Rule under the Gramm-Leach-Bliley Act (GLBA).
This isn’t just about compliance—it’s about maintaining client trust and protecting your reputation.
A Data Security Plan (also known as a Written Information Security Plan or WISP) is a formal document outlining how your firm protects client data. It includes risk assessments, technical safeguards, access controls, training protocols, and incident response procedures.
IRS Publication 4557 outlines the key areas tax professionals need to cover, including:
In short, your WISP should explain how your firm protects taxpayer data—and how you respond if that protection fails.
Understanding the risks helps you plan more effectively. Here are some of the most common threats firms face today:
Fake emails or websites that trick users into revealing sensitive login credentials.
Malware that encrypts your files and demands payment to restore access.
Cloud services, email accounts, or shared drives without proper permissions in place can expose client data.
Unintentional mistakes by employees, like misaddressed emails or mishandled USB drives can lead to breaches.
Shared credentials, outdated passwords, or lack of multi-factor authentication (MFA) open the door for attackers.
Creating a strong WISP doesn’t have to be complicated, but it does need to be thoughtful and documented. Here’s what to include:
Identify where and how your firm stores, transmits, and accesses client data. Where are the vulnerabilities?
Educate staff on phishing prevention, secure password use, and safe file-sharing practices. Make training part of onboarding and ongoing development.
Only authorized personnel should access sensitive data. Use role-based permissions and strong password policies.
Encrypt client files both at rest and in transit to protect against interception or theft.
Install antivirus software, use firewalls, and keep all systems up to date with the latest patches.
Require a second step to log in. Like a code from your phone after entering your password to protect access to sensitive data.
Automated, encrypted backups ensure you can recover data in the event of a breach or loss.
Document your steps in the event of a breach—including who to notify, how to contain the issue, and how to report it to the IRS or FTC.
Laptops, USB drives, and paper documents should be stored securely when not in use.
Even if you don’t have a large IT team, you can still take meaningful steps toward compliance:
You don’t have to do it all at once. Start where you are and improve over time.
Technology alone won’t protect you, but the right tools make compliance easier and more reliable. Here are a few must-haves for modern tax practices:
These tools don’t just support compliance, they also reduce your manual workload and improve the client experience.
Suralink is built for secure document collaboration. For tax professionals, it provides a structured, compliant way to manage sensitive client files without relying on email or disorganized shared drives.
Whether you’re managing hundreds of clients or a handful, Suralink keeps your document workflows secure and auditable—without adding complexity.
Once your plan is in place, keeping it active and effective is just as important. Here’s how to stay on track:
Cybersecurity is an ongoing effort, not a one-time task. But it’s manageable with the right habits and tools in place.
A strong data security plan isn’t just about checking boxes for the IRS. It’s about building trust with your clients, reducing the risk of costly incidents, and creating a firm foundation for your practice.
Whether you’re just starting your WISP or looking to strengthen what you already have, tools like Suralink can help simplify the process.
If you want to see how Suralink supports secure, compliant document exchange for tax professionals, request a demo to learn more.