Offshore Outsourcing of Tax-Return Preparation

Promising Business Opportunities and Professional Standards

Outsourcing business processes overseas is increasingly common in the banking, financial services, retailing, insurance, and telecommunications sectors. Economists and accounting professionals expect this trend to accelerate; Deloitte Consulting LLP expects two million financial services industry jobs to relocate overseas during the next few years. Many large CPA firms have begun shifting tax-compliance work overseas, through outsourcing facilitators, to Chartered Accountants (CA) in India.

Outsourcing tax-compliance work overseas can enable CPAs to focus on highermargin services such as tax consulting, to reduce labor costs, and to increase the speed of tax-return processing. With such potential benefits, CPA firms will likely join other segments in increasingly outsourcing tax-compliance services.

Some argue that outsourcing U.S. jobs overseas is un-American. Others rightfully point out that some overseas labor markets can be exploitative and contrary to American sensibilities-to the extent of exploiting indentured workers or child labor. On the other hand, some economists argue that outsourcing jobs overseas improves world labor market efficiency and U.S. labor productivity, and also reduces both world and U.S. inflation. CPAs that outsource appropriate work overseas can contribute to the economic efficiency of the United States and the world economy, and aid in the economic development of developing countries with high rates of poverty.

Offshore Outsourcing for Tax-Compliance Services

Outsourcing tax-return preparation offshore involves partnering with an outsourcing facilitator that provides the Internet interface and the access to overseas expertise, such as CAs in India, needed for offshore outsourcing. Four prominent facilitators are Commerce …