Creating a WISP: The Tax Professional’s Step-by-Step Guide

It’s 11 PM on April 14th, and you’re racing to finish the last batch of tax returns before the deadline. Your email pings—a client asking whether their Social Security number is safe with your firm. You pause. Do you have documented proof that you’re protecting their data? Can you show them—or more importantly, the IRS and FTC—that you have a Written Information Security Plan in place?

If you hesitated to answer, you’re not alone. Thousands of tax professionals are operating without knowing how to create a WISP, despite it being a federal requirement since 2023. But here’s what many don’t realize: learning how to create a WISP isn’t just about avoiding fines—it’s about protecting your practice, your clients, and your professional reputation in an increasingly dangerous digital landscape.

This comprehensive guide will walk you through exactly how to create a WISP that meets both IRS Publication 4557 and FTC Safeguards Rule requirements. Whether you’re a solo practitioner or managing a multi-person firm, understanding how to create a WISP is now as essential as knowing how to prepare a 1040. By the end of this article, you’ll have a clear roadmap for protecting client data and achieving full compliance.

Understanding How to Create a WISP: Definition and Legal Requirements

Learning how to create a WISP starts with understanding what it actually is. A Written Information Security Plan is a formal, documented framework that outlines how your tax practice identifies, assesses, and protects sensitive client information from security threats. When you learn how to create a WISP properly, you’re building a comprehensive security roadmap that covers everything from password policies to data breach response procedures.

The legal foundation for learning how to create a WISP comes from two primary sources: the Gramm-Leach-Bliley Act (GLBA) and the FTC’s Safeguards Rule. As of June 9, 2023, all tax professionals who prepare returns for compensation must know how to create a WISP and have one in place. The IRS Publication 4557 reinforces this requirement, making how to create a WISP mandatory knowledge for maintaining your PTIN.

The Nine Essential Components You’ll Include When You Learn How to Create a WISP

When you learn how to create a WISP that meets federal requirements, you must include nine specific elements mandated by the FTC Safeguards Rule. Each component addresses a critical aspect of your security program:

How to Create a WISP: Your Complete Step-by-Step Implementation Guide

Now let’s get practical. Learning how to create a WISP becomes manageable when you break it into distinct phases. This comprehensive guide will walk you through each step of how to create a WISP, from initial assessment to final implementation. Set aside focused time—most small practices can complete the initial draft in 3-4 hours when following this structured approach to how to create a WISP.

Phase 1: Conducting Your Risk Assessment (The Foundation of How to Create a WISP)

The first critical step in how to create a WISP is understanding exactly what you’re protecting and where vulnerabilities exist. Your risk assessment forms the foundation of your entire security program. Without this step, you’re building security measures on guesswork rather than evidence.

When learning how to create a WISP, use the NIST Cybersecurity Framework as a guide for your risk assessment. It provides a structured approach that aligns with FTC expectations. Document everything you discover—this documentation proves due diligence if you’re ever audited.

Phase 2: Designating Your Qualified Individual (Leadership in How to Create a WISP)

One of the most important decisions in how to create a WISP is choosing who will oversee your information security program. The FTC requires you to designate a “Qualified Individual” responsible for implementing and supervising your WISP. For solo practitioners learning how to create a WISP, this person is typically you. For larger firms, consider someone with both authority and aptitude for security matters.

Your Qualified Individual doesn’t need to be a cybersecurity expert when you’re learning how to create a WISP—they need to be organized, accountable, and committed to the security program. Their responsibilities include:

• Overseeing the development and implementation of your WISP
• Coordinating security assessments and testing
• Managing vendor security relationships
• Ensuring staff complete security training
• Leading incident response when breaches occur
• Reporting security status to leadership or board

Phase 3: Implementing Technical Safeguards (The Core of How to Create a WISP)

This is where many tax professionals get stuck when learning how to create a WISP—but it doesn’t have to be overwhelming. Start with the five essential technical controls that address the most common vulnerabilities in tax practices. Once these are in place, you can build additional layers of security over time.

The FTC Safeguards Rule for tax preparers provides detailed guidance on implementing these technical controls. When you’re figuring out how to create a WISP, remember that you don’t need perfect security—you need documented, reasonable security that addresses identified risks.

Phase 4: Establishing Access Controls (Restricting Data Access in How to Create a WISP)

A critical component of how to create a WISP is implementing the principle of least privilege. This means employees should only access the specific client data they need to perform their job functions. When you learn how to create a WISP properly, you’ll document who can access what, when, and why.

Create an access control matrix that documents:

• User roles and permissions: Define what each position can access (e.g., preparers vs. administrative staff)
• Authentication requirements: Password complexity, MFA enforcement, session timeouts
• Access review procedures: Quarterly audits of who has access to what systems
• Termination protocols: Immediate revocation of access when employees leave
• Remote access security: VPN requirements, device restrictions, geographic limitations

Phase 5: Creating Your Incident Response Plan (Preparing for Breaches in How to Create a WISP)

An essential element of how to create a WISP is planning for when—not if—something goes wrong. Your incident response plan documents exactly what happens when you discover a security breach, suspicious activity, or data loss event. Without this plan, panic and confusion amplify the damage.

According to IBM’s 2024 Cost of a Data Breach Report, organizations with incident response plans save an average of $2.66 million per breach compared to those without plans. Learning how to create a WISP that includes comprehensive incident response planning is an investment that pays for itself.

Your incident response plan within your WISP should include:

• Detection procedures: How you’ll identify potential security incidents
• Containment steps: Immediate actions to stop ongoing breaches
• Notification requirements: Who to inform (clients, IRS, FTC, law enforcement) and when
• Investigation protocols: How you’ll determine what happened and what data was affected
• Recovery procedures: Steps to restore normal operations securely
• Post-incident review: How you’ll learn from incidents and improve your WISP

For a ready-to-use template, download our free incident response plan template that integrates seamlessly with your WISP.

Phase 6: Developing Your Training Program (The Human Element of How to Create a WISP)

The most sophisticated technical controls fail when employees don’t understand security—that’s why employee training is mandatory in how to create a WISP. Your WISP must document initial and ongoing security awareness training for all staff who handle client data.

Schedule training quarterly at minimum, with additional sessions when you update your WISP or after security incidents. Document all training with attendance records and comprehension verification (simple quizzes work well). This documentation proves compliance when regulators ask about your training program.

Common Mistakes to Avoid When Learning How to Create a WISP

Through helping hundreds of tax professionals learn how to create a WISP, we’ve identified the most common pitfalls that undermine otherwise solid security programs. Avoid these mistakes to ensure your WISP actually protects your practice:

Mistake #1: Using Generic Templates Without Customization

The biggest mistake in how to create a WISP is downloading a template and calling it done without customization. While templates provide excellent starting points, the FTC specifically requires your WISP to address YOUR practice’s unique risks, operations, and data flows. A one-size-fits-all approach fails audits and leaves real vulnerabilities unaddressed.

Mistake #2: Creating Your WISP and Then Ignoring It

How to create a WISP isn’t a one-time project—it’s an ongoing program. Many tax professionals complete their WISP, file it away, and never look at it again until renewal time. This “set it and forget it” approach violates FTC requirements and leaves you vulnerable as your technology and threats evolve.

Your WISP requires updates whenever you:

• Add or change software or cloud services
• Hire new employees or contractors
• Experience any security incident
• Change office locations or add remote workers
• Modify how you collect, store, or transmit client data
• Receive new regulatory guidance from IRS or FTC

Mistake #3: Focusing Only on Technology and Ignoring People and Processes

Understanding how to create a WISP means recognizing that security is only 20% technology—the other 80% is people and processes. The most expensive security software won’t protect you if employees use “Password123” or click every link in their email.

Balance your WISP with equal attention to:

• Administrative controls: Policies, procedures, training, oversight
• Technical controls: Firewalls, encryption, MFA, monitoring
• Physical controls: Locks, cameras, secure disposal, visitor management

Mistake #4: Failing to Test Your Safeguards

The FTC requires regular testing of security measures—simply implementing controls isn’t enough when learning how to create a WISP. Schedule and document quarterly tests of:

• Backup restoration (can you actually recover your data?)
• Incident response procedures (does everyone know their role?)
• Access controls (are terminated employees actually locked out?)
• Phishing susceptibility (would employees click a malicious link?)

For comprehensive testing guidance aligned with IRS requirements, review the IRS Security Six backup requirements that include specific testing protocols.

How to Create a WISP: Timeline and Resource Planning

One of the most common questions about how to create a WISP is: “How long will this take?” The answer depends on your practice size, current security posture, and available resources. Here’s a realistic timeline for different practice sizes learning how to create a WISP.

30-Day Implementation Plan for Solo Practitioners

Solo practitioners can complete the initial implementation of how to create a WISP in approximately 30 days with focused effort:

60-Day Implementation Plan for Small Firms (2-10 Employees)

Small firms learning how to create a WISP need additional time for coordination, training, and more complex technology environments:

• Weeks 1-2: Comprehensive risk assessment including all staff input and system inventory
• Weeks 3-4: Implement technical safeguards across all devices and accounts
• Weeks 5-6: Develop policies, procedures, and access control documentation
• Weeks 7-8: Conduct initial staff training and finalize WISP documentation

Essential Tools and Budget for How to Create a WISP

Learning how to create a WISP doesn’t require a Fortune 500 budget. Here’s the minimum viable security stack for tax practices in 2025:

• Password Manager: $3-5 per user/month (Bitwarden, 1Password, or Dashlane)
• Multi-Factor Authentication: Often free with tax software; standalone apps $2-3/user/month
• Encrypted Email: $5-10 per user/month (Microsoft 365 with encryption, ProtonMail, or Virtru)
• Cloud Backup: $10-50/month depending on data volume (Backblaze, Carbonite, or Acronis)
• Endpoint Protection: $8-15 per device/month (CrowdStrike, SentinelOne, or Microsoft Defender for Business)
• VPN Service: $5-10 per user/month for secure remote access

Total monthly investment for a small practice: $50-200. That’s less than two billable hours—and essential for learning how to create a WISP that actually protects your practice.

FAQ: Your Questions About How to Create a WISP Answered

How long should my WISP document be when I learn how to create a WISP?

Quality matters more than quantity when learning how to create a WISP. Most effective WISPs for small tax practices run 15-30 pages including policies, procedures, and documentation attachments. Your WISP should be comprehensive enough to address all nine FTC-required elements, but readable enough that employees will actually use it. If your WISP sits on a shelf because it’s too complex, it’s worthless regardless of length.

Do I need to hire a consultant to learn how to create a WISP?

Not necessarily. Many tax professionals successfully learn how to create a WISP using templates, guides, and the IRS Publication 5708 template. However, professional help makes sense if you:

• Have more than 10 employees or multiple locations
• Use complex technology environments or custom software
• Have limited time during tax season to focus on security
• Want independent verification of compliance before audits
• Prefer expert guidance for implementing technical controls

What happens if I don’t learn how to create a WISP or fail to implement one?

The consequences of not learning how to create a WISP are severe and escalating:

• FTC fines up to $100,000 per violation (and each affected client can be a separate violation)
• IRS sanctions including loss of PTIN and inability to practice
• Perjury charges for falsely claiming WISP compliance on Form W-12
• Personal liability for data breaches affecting clients
• Cyber insurance claims denial (policies require adequate security measures)
• Devastating reputational damage and client loss
• State-level penalties under data breach notification laws

How often do I need to update my WISP after learning how to create a WISP initially?

Your WISP is a living document requiring regular maintenance after you initially learn how to create a WISP:

• Quarterly reviews: Brief reviews to ensure nothing major has changed
• Annual comprehensive updates: Full review and revision of all policies and procedures
• Immediate updates after: Security incidents, technology changes, staff changes, regulatory updates
• Post-audit updates: Incorporate findings from security testing or external assessments

Set calendar reminders for these reviews—maintaining your WISP isn’t optional, it’s a regulatory requirement.

Can I market my WISP to attract security-conscious clients?

Absolutely! Learning how to create a WISP provides a competitive advantage in 2025. Security-conscious clients actively seek tax professionals who take data protection seriously. Mention your WISP in:

• Engagement letters and service agreements
• Your website’s security or about page
• Client onboarding materials
• Marketing materials and presentations
• Professional directory profiles

Position your WISP as evidence of your commitment to protecting client information—it differentiates you from competitors who haven’t learned how to create a WISP or haven’t bothered to implement proper security.

What’s the difference between a WISP and a general cybersecurity policy?

A WISP is a specific regulatory requirement with mandated components, while general cybersecurity policies can vary. When you learn how to create a WISP properly, you’re building a comprehensive information security program that includes:

• All nine FTC Safeguards Rule elements
• Risk assessment documentation
• Designated qualified individual
• Regular testing and monitoring requirements
• Incident response procedures
• Vendor management protocols

A general cybersecurity policy might cover some of these elements but won’t necessarily meet the specific regulatory requirements for tax professionals under GLBA and the FTC Safeguards Rule.

Advanced Strategies After You Learn How to Create a WISP

Once you’ve mastered the basics of how to create a WISP, consider these advanced strategies that leading tax firms use to enhance their security posture:

Integrating Your WISP with Cyber Insurance Requirements

Learning how to create a WISP that aligns with cyber insurance requirements can reduce premiums by 15-30%. Insurance underwriters specifically look for:

• Documented incident response procedures with 24-hour notification protocols
• Regular security training with attendance verification
• Quarterly backup testing with documented results
• Multi-factor authentication on all systems
• Vendor management with written security agreements
• Annual third-party security assessments

When learning how to create a WISP, request your cyber insurance application requirements and ensure your WISP addresses every question they ask about your security program.

Implementing Zero Trust Principles in Your WISP

Zero Trust Architecture represents the future of security and can be incorporated as you learn how to create a WISP. The principle is simple: trust nothing and verify everything, even internal users and systems. While full Zero Trust implementation is complex, you can start with:

• Micro-segmentation: Separate networks for client data versus general business operations
• Continuous authentication: Re-verify users when accessing sensitive data, not just at login
• Least privilege access: Grant minimum necessary permissions, not broad administrative rights
• Assume breach mentality: Monitor for threats as if attackers are already inside your network

Using Your WISP for Client Communication and Trust-Building

Smart tax professionals turn learning how to create a WISP into a marketing advantage. Consider creating:

• A one-page security summary for clients highlighting your WISP commitment
• An annual security update email showing continuous improvement
• Website security badges and certifications
• Secure client portal with visible security features
• Engagement letter language specifically referencing your WISP

Transparency about your security builds trust—don’t hide the fact that you’ve learned how to create a WISP and implemented comprehensive protections.

Real-World Success: How Learning How to Create a WISP Transformed One Tax Practice

Meet David, a CPA with a small practice in Pennsylvania. In early 2023, David received his PTIN renewal form and saw the WISP certification question. He’d been putting off learning how to create a WISP, assuming it was complex and expensive. Facing the compliance deadline, he finally dedicated a weekend to understanding how to create a WISP properly.

“I was shocked at how manageable it was once I broke it into steps,” David recalls. “The risk assessment took about three hours. Implementing MFA and backups took another two hours. Writing the actual WISP document took about four hours using the IRS template as a starting point.”

But the real surprise came six months later. A sophisticated phishing attack targeted David’s firm, attempting to steal client tax returns. Because he’d learned how to create a WISP and implemented proper email filtering, employee training, and incident response procedures, his staff immediately recognized and reported the attack. No data was compromised.

“Learning how to create a WISP saved my practice. When I told clients about the attempted attack and how our security procedures protected them, three of them referred new clients specifically because of our security commitment.” – David M., CPA

David now includes security as a key differentiator in his practice marketing. His website prominently features his commitment to data protection, and he sends clients an annual security update each January. Prospective clients regularly mention his security focus as a deciding factor in choosing his firm.

Your Action Plan: Start Learning How to Create a WISP Today

Stop procrastinating about learning how to create a WISP. Here’s exactly what to do in the next 48 hours:

Remember: Perfect security doesn’t exist, but documented reasonable security does. The FTC and IRS aren’t looking for perfection when evaluating how to create a WISP—they’re looking for evidence that you take data protection seriously, have identified your risks, and have implemented appropriate safeguards.

Essential Resources for Learning How to Create a WISP

Continue your education on how to create a WISP with these authoritative resources:

Government Resources

• IRS Publication 4557: Safeguarding Taxpayer Data – Required reading for how to create a WISP
• IRS Publication 5708: WISP Template – Official template for how to create a WISP
• FTC Safeguards Rule Compliance Guide – Legal requirements for how to create a WISP
• NIST Cybersecurity Framework – Risk assessment methodology for how to create a WISP
• CISA Multi-Factor Authentication Guide – Implementation guidance for MFA

Bellator Cyber Resources

• Complete FTC Safeguards Rule Guide – Deep dive into compliance requirements
• Free Incident Response Plan Template – Essential component of your WISP
• IRS Security Six: Backup Requirements – Meeting backup compliance
• Professional WISP Template Package – Complete customizable WISP for tax professionals

Final Thoughts: How to Create a WISP Is Now Essential Knowledge

Learning how to create a WISP isn’t optional anymore—it’s as fundamental to tax practice as understanding tax code. The regulatory environment has permanently shifted. The IRS and FTC are actively enforcing WISP requirements. Cyber insurance companies are denying claims without proper security documentation. And clients are increasingly sophisticated about data security.

But here’s the opportunity: while your competitors procrastinate about learning how to create a WISP, you can position your practice as the secure, compliant, trustworthy choice. Every day you delay learning how to create a WISP is another day of regulatory risk and missed competitive advantage.

The tax professionals who thrive in 2025 and beyond won’t be those with the most clients—they’ll be those who protect their clients best. Start learning how to create a WISP today. Your practice, your clients, and your professional future depend on it.

Questions about how to create a WISP for your specific situation? Our team of tax practice security experts is ready to help. Don’t let compliance deadlines catch you unprepared—take the first step toward comprehensive data protection today.