IRS Publication 4557, Safeguarding Taxpayer Data
The IRS recommends tax professionals use Publication 4557, Safeguarding Taxpayer Data, as a guide for conducting a review of your current security measures and to create or update your security plan.
Is Complying with IRS Publication 4557 Mandatory?
The IRS requires tax preparers, payroll processors, and eFilers (if you have a PTIN then you qualify) to implement a cyber security plan and supporting policies that contain key requirements. These are outlined in IRS Publication 4557 – Safeguarding Taxpayer Data, and Small Business Information Security – The Fundamentals, by the National Institute of Standards and Technology.
What are the penalties for not complying with IRS Publication 4557?
By now, most tax preparers are aware they need to comply with the FTC Safeguards Rule and IRS Publication 4557. Failure to do so could result in stiff penalties.