It can apply only if the firm maintains customer information concerning fewer than 5,000 consumers, and it removes only four listed duties. Citation: 16 CFR 314.6.
Primary source: 16 CFR 314.2(h)(2)(viii)
Does the under-5,000-consumer exemption apply to a tax preparer?
Details
Many solo and seasonal tax practices maintain information concerning fewer than 5,000 consumers. Section 314.6 removes 314.4(b)(1), (d)(2), (h), and (i), but not the core written program, access-control, MFA, encryption, training, vendor, disposal, or breach-notification duties. The firm should document the count method, because old files, leads, former customers, and retained records can matter.
Primary source: 16 CFR 314.2(h)(2)(viii).
FAQ
Does the under-5,000-consumer exemption apply to a tax preparer?
It can apply only if the firm maintains customer information concerning fewer than 5,000 consumers, and it removes only four listed duties. Citation: 16 CFR 314.6.
What is the data-flow issue for a tax preparer?
Client information moves through organizers, tax software, portals, email, e-signature tools, e-file records, and retained workpapers. The WISP must match where taxpayer data actually lives, not just the tax software named on the invoice.
Is this legal advice?
No. It is source-cited educational content for a template product, not legal advice.