Outsourcing Tax Returns
The preparation of income tax returns overseas, outsourcing, raises many significant ethical issues. Reports of the scope and size of the outsourcing market vary greatly, but the largest outsourcing companies claim that thousands of returns were processed during the 2006 tax season. Estimates for the 2007 season indicate the total may now be well into the hundreds of thousands. Outsource Partners International (OPI) reports preparing 10,000 U.S. tax returns last year. SurePrep claims to have processed 6,000 returns last year and expects to process as many as 30,000 by April 2008 A statement on their website sums up their outsourcing pitch to CPAs:
What if you could prepare a thousand more tax returns without adding even one more staff member? And what if you could prepare those returns for up to 50 percent less than what it costs you right now? You can with SurePrep. And with virtually unlimited ability to prepare and process returns, you can increase volume, multiply profits and grow your practice. (www.sureprep.com)
SurePrep electronically transmits tax information to preparers in India. Confidentiality of personal and financial data is a critical issue, as is the preparers' competence and skills. SurePrep responds to the latter concern by pointing out that Indian preparers are well educated, speak English, and are trained in U.S. tax law. SurePrep's website provides the following advice to CPAs concerned about what to tell clients:
You might tell your tax clients that while SurePrep accountants will prepare the tax returns, our role is transparent to the process from your clients' perspective. Your firm is responsible for reviewing and approving the return prior to delivery.
The outsourcing process is similar among other service providers. The U.S. firm still interviews the client and collects all the information, which is encrypted and transmitted electronically to a secure server that the foreign accountant can access. Client source documents, including
What if you could prepare a thousand more tax returns without adding even one more staff member? And what if you could prepare those returns for up to 50 percent less than what it costs you right now? You can with SurePrep. And with virtually unlimited ability to prepare and process returns, you can increase volume, multiply profits and grow your practice. (www.sureprep.com)
SurePrep electronically transmits tax information to preparers in India. Confidentiality of personal and financial data is a critical issue, as is the preparers' competence and skills. SurePrep responds to the latter concern by pointing out that Indian preparers are well educated, speak English, and are trained in U.S. tax law. SurePrep's website provides the following advice to CPAs concerned about what to tell clients:
You might tell your tax clients that while SurePrep accountants will prepare the tax returns, our role is transparent to the process from your clients' perspective. Your firm is responsible for reviewing and approving the return prior to delivery.
The outsourcing process is similar among other service providers. The U.S. firm still interviews the client and collects all the information, which is encrypted and transmitted electronically to a secure server that the foreign accountant can access. Client source documents, including