You will pay for compliance, either up front, or in audits, fines, and lost business. Smart MSPs bake it in. Others get burned.
Introduction: The Compliance Tax You Didn’t See Coming
If you're an MSP managing fax infrastructure for clients, especially in healthcare, government, or finance, you may be unknowingly incurring what we call the “Compliance Tax.”
This isn't a line-item expense. It's the invisible cost of using outdated, non-compliant fax platforms in an age when clients demand proof of regulatory adherence, secure data handling, and operational efficiency.
Fax remains deeply embedded in sensitive workflows, but legacy systems can put your clients (and your revenue) at risk.
You’re either:
Paying proactively for SOC 2-compliant, secure cloud faxing, or
Paying reactively through fines, lost deals, and reputation damage.
This article explains what that tax looks like, how it's hurting MSPs, and what to do about it.
Why SOC 2 Compliance Is Non-Negotiable
SOC 2 is the gold standard for demonstrating operational security and data integrity for any service provider, especially those handling client data.
Unlike HIPAA or GDPR, which are regulatory mandates, SOC 2 is an attestation framework that shows you proactively meet strict standards across:
Security
Availability
Processing integrity
Confidentiality
Privacy
Learn more about SOC 2 compliance from the AICPA
For MSPs, SOC 2 provides:
A competitive edge in RFPs
A trust signal to clients in regulated sectors
A defensive shield in case of a breach or audit
FaxSIPit’s hosted fax services are SOC 2-compliant, giving MSPs an easy way to extend security and compliance without taking on the infrastructure burden.
Explore our SOC 2-Compliant Fax Platform
The Real-World Costs of Non-Compliance
Penalties and Legal Liability
Compliance failures can result in substantial fines, even for something as “routine” as faxing the wrong way:
$1.25M HIPAA fine for lost documents that included faxed PHI
→ HHS Press Release$300K GDPR fine against a German hospital for poor access controls on fax and email
→ GDPR Enforcement Tracker
These penalties aren't just financial—they also generate negative press and increase scrutiny.
Lost Contracts and Bid Failures
Many MSPs discover the hard way that faxing can be a dealbreaker when a government or healthcare RFP includes compliance questions:
“Do your fax solutions support encryption, access controls, and audit trails?”
If your answer is “we’re working on it” you're out.
At FaxSIPit, we’ve helped partners recover deals they would have otherwise lost by plugging in our secure, cloud-native fax solutions.
The Operational “Invisible Tax”
Beyond fines and lost bids, outdated fax platforms quietly waste time:
Manual log reconciliation
Failed delivery retries
Fax queues with no user-level access control
No audit trail for compliance reporting
Every hour spent managing a legacy fax system is an hour not spent serving clients. Multiply that across contracts, and you’re paying a tax you can’t afford.
Who Pays the Highest Compliance Tax?
If your clients include any of the following verticals, you’re on the hook for getting fax compliance right:
Vertical | Compliance Burden | Real-World Risk |
Healthcare | HIPAA, PHIPA | $1M+ fines for PHI breaches |
Government | SOC 2, FedRAMP | RFP disqualification |
Legal | ABA Model Rules | Ethics violations, lost clients |
Finance | GLBA, PCI DSS | Audit failures, client churn |
Education | FERPA | Parental complaints, lawsuits |
FaxSIPit: A Compliance Buffer for MSPs
FaxSIPit offers a fully managed, cloud-hosted fax platform purpose-built for multi-tenant MSP deployments.
Key compliance features include:
✅ SOC 2 Attestation
✅ AES 256-bit encryption in transit & at rest
✅ Detailed audit logs for every fax
✅ User- and group-based access control
✅ Secure API for workflow integration
Whether you're replacing an analog line or building a Teams-native fax workflow, FaxSIPit can help you go live in days, not months.
Conclusion: Outsource the Compliance Anxiety, Keep the Wins
You’re already paying a tax on fax compliance, just maybe not the kind you see on paper. The MSPs who ignore it end up:
Losing contracts
Sinking staff time into manual processes
Exposing themselves to legal risk
The good news? You don’t have to fix it alone.
With FaxSIPit, you get:
A SOC 2-compliant platform
An MSP-friendly deployment model
A partner that helps you win business, not just manage risk
Don’t Let an Old Fax Line Cost You a Six-Figure Contract
Reach out at sales@faxsipit.com
Let’s turn your fax system from liability to advantage.
