Federal mandates, including from the IRS, require that every practitioner with a Preparer Tax Identification Number (PTIN) have in place a Written Information Security Plan (WISP). This requirement is more than just a bureaucratic necessity. In today's environment, having solid security measures in place is a fundamental aspect of protecting your clients' sensitive information and preserving the integrity of your practice.

Elements of a WISP

IRS Publication 5708 notes that a WISP should be appropriate to your organization’s size, scope of activities, complexity, and the sensitivity of the customer data that it handles. An effective WISP should focus on three areas: 

• Employee management and training 
• Information systems 
• Detecting and managing system failures

Why a WISP is Essential

According to the IRS, WISPs protect businesses and clients while providing a blueprint of action in the event of a security incident. In addition, a WISP can help in the event of other events – such as fire, flood, tornado, earthquake, and theft – that can seriously disrupt one’s ability to conduct business.

Other important considerations include:

Regulatory compliance: Meeting the federal regulations that mandate the existence of a WISP for all tax professionals who hold a PTIN isn't just about checking a box. Rather, it's part of a broader strategy to enhance data security across the tax preparation industry. Non-compliance can result in penalties and damage to your professional standing.

Client trust and reputation: Data breaches and cyberattacks are on the rise. By implementing a WISP, you demonstrate to your clients that you take data security seriously. This commitment not only helps safeguard their personal and financial information, but also boosts your reputation as a trustworthy and diligent professional.

Simplify Your Firm’s Compliance Using a WISP Template

While understanding the technicalities of a WISP and ensuring that yours covers all of the necessary aspects can be daunting, compliance doesn't have to be overwhelming. Using a high-quality WISP template is one of the most efficient ways to meet IRS and other federal requirements.

To that end, Tech 4 Accountants offers a free, customizable WISP template, designed specifically for tax professionals. This tool simplifies the WISP development process, allowing you to swiftly secure your practice, demonstrate compliance, and ensure that your WISP is comprehensive and up to date, tailored to the unique needs of your practice.

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Other COCPA resources related to WISPs and cybersecurity: 

From the members-only COCPA Resource Center: 

• The Overlooked Threat: Cybersecurity in Small Businesses
• Rolling Out Your Firm’s WISP: A Practical Guide for Firm Owners

CPE courses: 

• Complying with IRS Publication 4557 and FTC Safeguards Rule: Step-by-Step Guidance for Firms of All Sizes (on demand)
• Cybersecurity 101 for CPAs (webinar; various dates)

Download the free e-book, Mastering Cybersecurity for Accounting Firms, from COCPA Platinum Partner CPACharge. 

The COCPA Technology Users Group (TUG) regularly meets online to discuss technology-related trends, practices, and resources. For more information, contact Stacy Svendsen.