Outsourcing Due Diligence Checklist for Accounting Firms | HelloBooks What to check before sending client work to an outsourcing provider: section 7216 consent, FTC Safeguards Rule contract terms, access, data location.
Before an outside team touches client returns or books, your firm needs answers on consent, security and contract terms. This checklist covers the federal rules that apply and the practical questions behind them.
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Section 7216 rules decide when you need a client’s consent to share return information; 26 CFR 301.7216-2(d)(1) allows disclosure to another preparer only if that preparer is in the United States. The FTC Safeguards Rule decides how you oversee the provider: 16 CFR 314.4(f) requires you to select capable providers, require safeguards by contract, and assess them periodically.
File the completed checklist, the signed contract and the provider’s security answers with your WISP. If something goes wrong, the file shows what you checked and when.
A working checklist for tax professionals, not advice on a specific return.
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