IRS Publication 4557: What Every Tax Preparer Needs to Know

IRS Publication 4557, 'Safeguarding Taxpayer Data,' is the definitive guide for tax professionals on protecting client information. Updated regularly, it outlines the minimum security standards every tax preparer must meet. Here's what you need to know.

Who Must Comply?

Every tax professional who handles taxpayer data must comply with Publication 4557 requirements. This includes individual practitioners, enrolled agents, CPAs, tax attorneys, and anyone who prepares, assists in preparing, or provides auxiliary services to tax preparation. Size doesn't matter — a solo practitioner has the same obligations as a large firm.

Core Requirements

Publication 4557 establishes several key requirements that every tax professional must implement:

• Written Information Security Plan (WISP) — documenting your security policies and procedures
• Employee background checks and security training
• Physical security for offices and documents
• Technology safeguards including encryption, firewalls, and access controls
• Incident response planning
• Regular security assessments and updates to your WISP

Consequences of Non-Compliance

Failure to comply with Publication 4557 can result in IRS sanctions, loss of your PTIN, FTC enforcement actions with fines up to $100,000 per violation, and civil lawsuits from affected taxpayers. Beyond the financial impact, a data breach can destroy your reputation and client relationships built over years of practice.

Don't wait until it's too late. Bellator Cyber Guard specializes in helping tax professionals meet and exceed IRS compliance requirements. Contact us for a free assessment of your current security posture.