This article wasn’t written overnight.
It came together after many internal discussions, research, and real conversations with accounting firms - especially firms navigating capacity issues and leaning more heavily on freelancers and independent contractors.
Let’s be clear upfront:
This is not an anti-freelancer piece.
The gig economy has created real opportunities. Many freelancers are skilled, ethical, and hardworking professionals. We want that ecosystem to grow.
But growth brings responsibility - especially in tax and accounting, where client data protection isn’t optional.
What often gets missed in the freelancer conversation is not talent, but compliance reality.
Most firms understand the headline rule under IRC Section 7216:
If you disclose tax return information to a third party, you need taxpayer consent.
But here’s where it gets complicated.
That consent must clearly identify:
Now ask yourself a simple question:
If you’re working with an individual freelancer - possibly offshore - what exactly are you listing on that consent?
Section 7216 assumes a level of defined, stable, identifiable service providers. Freelancer arrangements often aren’t structured that way - even when intentions are good.
Consent becomes harder to defend when the “service provider” is fluid.
AICPA guidance expects firms to perform due diligence on service providers.
That usually includes:
Now let’s pause and be honest.
If the “vendor” is an individual freelancer or a two-person operation:
AICPA frameworks were written with vendors and organizations in mind - not loosely structured individual contractors.
Trying to force-fit freelancers into that checklist often leaves uncomfortable gaps.
Most firms now have a Written Information Security Program (WISP) because they’re required to.
But here’s the critical detail that often gets overlooked:
Your WISP must account for service providers who access or store client data.
That means:
So ask the uncomfortable but necessary question:
Does your freelancer have:
In most cases, the answer isn’t “no” because they’re careless - it’s “no” because they were never built to operate like a regulated service provider.
The FTC Safeguards Rule raises the bar even further.
If you use a service provider - especially one outside the U.S. - the rule expects you to:
This isn’t optional.
And it’s not lightweight.
For large vendors, this is standard. For freelancers or small offshore setups, it’s often unrealistic.
Not because they don’t care - but because they don’t have the infrastructure, legal framework, or resources to meet it.
Most compliance failures don’t come from bad actors.
They come from misaligned operating models.
Freelancers are optimized for:
Regulatory frameworks are optimized for:
Those two worlds don’t naturally align.
None of this means:
It simply means that compliance doesn’t scale casually.
As client expectations rise and regulators tighten scrutiny, firms have to ask:
Those are business questions - not moral judgments.
This blog isn’t a verdict. It’s an invitation to reflect.
If your firm is using freelancers today, it may be working - and working well.
But the most resilient firms periodically step back and ask:
Are we compliant by design… or by assumption?
That distinction matters - not just for regulators, but for the clients who trust you with their most sensitive information.
Amrit Singh is a business leader with 10+ years of experience in continuing education. Helping accounting, tax, and finance professionals stay compliant with ease, he began his journey as a consultant. Learning across industries before stepping into a leadership role, he is shaped by both successes and failures. Amrit is passionate about problem-solving, building products, exploring technology, and mentoring future leaders. He is dedicated to transform continuing education, making it simpler, smarter, and more meaningful. Through his blogs and talks, he shares insights on accounting careers, CPA compliance, and the future of continuing education.
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