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Important Compliance Notice

Think You're Too Small? Think Again.

FTC & IRS requirements apply to ALL tax preparers who handle client data—regardless of firm size or client count.

MYTH

"I only have 200 clients, so the FTC Safeguards Rule doesn't apply to me."

FACT

The 5,000-record threshold applies to only 2 specific requirements. Core compliance applies to ALL firms.

Requirement

Small
<5K

Large
5K+

Covered by SafeGuardGRC

Written Incident Response Plan (IRP)

FTC 16 CFR 314.4(h)

Annual IRP Review & Updates

FTC 16 CFR 314.4(h)

Written Information Security Policy (WISP)

FTC 16 CFR 314.4 & IRS Pub 4557

Annual Risk Assessment

FTC 16 CFR 314.4(b)

Employee Security Training

FTC 16 CFR 314.4(d)

Service Provider Oversight (Vendor Management)

FTC 16 CFR 314.4(g) & IRS Pub 4557

Secure Data Disposal Procedures

FTC 16 CFR 314.4(e)

Technical & Operational Controls

Multi-Factor Authentication (MFA)

FTC 16 CFR 314.4(c)

Access Controls & Least Privilege

FTC 16 CFR 314.4(c)(4)

Annual Penetration Testing

FTC 16 CFR 314.4(f)

Qualified Individual (QI)

FTC 16 CFR 314.4(a)

*1

Risk Assessment: While a written risk assessment is not required for firms with under 5,000 records, conducting one is highly recommended. Without a risk assessment, your firm won't identify compliance gaps or understand areas requiring attention.

*2

Qualified Individual: ALL firms, regardless of size, must designate a Qualified Individual to oversee their information security program (FTC 16 CFR 314.4(a)). This can be the firm owner, an office manager, or any designated person — a vCISO or formal CISO title is not required. However, for larger firms or those seeking expert guidance, engaging a vCISO is recommended to help manage compliance complexity and ensure proper governance.

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⚠️ Your firm size doesn't exempt you from core compliance

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