Discussion:Tax Preparation Outsourcing
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Discussion Forum Index --> Tax Questions --> Tax Preparation Outsourcing
| 7 July 2006 | |
| I am a sole practitioner in the San Diego area. I have heard the sales pitches of the outsourcing organizations and it sounds like something that may be of interested to me. Of course, their view of their service is just a bit biased.
I would like to know if anyone has actually used one of these services and is willing to discuss the pros and cons and if they liked it or not. All feedback would be appreciated. Larry | |
| 7 July 2006 | |
| The biggest con is ethically reporting to all your clients that you're doing it. | |
| 8 July 2006 | |
| I included the fact that I might have used an outsource firm in my 2005 engagement letter. They could initial a box to indicate that they did not want me to use such a service when preparing their returns. I got a few calls from clients asking what that really meant, but most of the clients either signed the letter without reading it or didn't care either way. I only received about 25% of my clients that indicated 'No'.
I was testing the waters and I was surprised by that low of a response. So that may not be as big a problem as we all expect. | |
| 8 July 2006 | |
| I looked into it and it still seems cheaper to pay someone here (USA) to do it. India wants $25 to $50 per mail in return. All info will need to be scanned first which takes time. My costs is not much more. JR1, should I disclose to my clients that I "outsource" to a CPA sitting down the hall. I do review all returns. I think the unethically part is paying $40 to prep return and then charging $300!! What a business!!! I hope I can still go to heaven.!!!! | |
| 8 July 2006 | |
| Personally, I don't like the idea -- maybe b/c of the stereotypes we have about outsourcing in general. But if you obtain the client's informed consent and properly review the returns, then I suppose there's nothing wrong with outsourcing (particularly for easy type returns). But I wouldn't rely on an unchecked box on a letter that the client may not have read or understood. I would want express authority to allow another to see confidential information and perform the work. I mean, if I were the client, I would think to myself that I hired you to prepare my return -- not a person in India. And I didn't grant authority to that person in another country to see my sensitive financial information.
DZ, if the CPA "down the hall" is not your employee I think you must disclose if you "outsource" to him/her. It's unethical not to disclose that fact, as the client engaged you to perform the personal services. You wouldn't be able to disclose the client's confidential information otherwise (that's my feeling). | |
| 8 July 2006 | |
| DZ, sorry if I sounded harsh -- didn't mean to be. It's just that we don't want clients coming back after the fact and saying they didn't consent to this or that. That could lead to professional sanctions, etc. | |
| 8 July 2006 | |
| Yeah, DZ. I think the rules are clear that you must disclose whenever you share tax information with anyone outside your firm. The difference is that your clients won't care about the CPA down the hall. They'll care about the chartered accountant overseas. And you should to, for you have no control whatsoever over what is done with that sensitive info. I find it a bit unsettling at best. The temptation to sell lists and info, when you're poor.... | |
| 8 July 2006 | |
| Our Privacy Policy discloses to clients we restrict access to all nonpublic personal information about them to "members of our firm" who need information to provice service to them. Are the folowing "outside the firm"? So the big questions is....are -Lacerte gets E file info before govt, outside temp workers , worker's down the hall, workers in another country, leased workers....."members of our firm"? I fell they are "members" in relation to the work they are performing for me. Accordingly, no need to disclose to them anything. This is not IRS 1099 vs W-2 issue. | |
| 8 July 2006 | |
| Good questions DZ. I dunno. I wonder what our clients would say qualifies as members of our firm? I'm one man, so it's easier for me...clearly the transmission of returns thru Intuit is necessary and part of the automatic process for which I have no options nor alternatives. I cannot imagine a client being upset about that. All the rest? Would make an interesting survey topic from someone detached, like GearUp, Intuit, Thomson (oh, forgot, they own GearUp now...), one of our societies, NSA or AICPA...just to see what the tolerance level is out there. One tax speaker discovered that a firm in his town was outsourcing all their returns overseas, and so began an advertising campaign merely saying that all his work was done in house...Nothing said about the other firm at all. That other firm went to court to stop the ads! So they figured it would be touchy if it got out in their relatively small town. I suppose it depends on where you live. In the bigger cities, maybe not too many care. In other areas, I'd bet there's some high suspicion out there. | |
| 8 July 2006 | |
| I have done "insourcing" for a couple of other CPA's in my area. They actually wanted me to become an "employee" of theirs and when I refused, they pay me to prepare returns for them during tax season. I signed a non-compete with both of them and they have me in contact with the clients that I do the work for. None of them have ever expressed any concerns even though I am another accountant, unrelated to the two I do work for. The partner reviewed all the returns and signed them, but I was listed as the accountant in charge....is it unethical? I think not, if I had as many clients as those two do (over 500 corporate and tons of individuals and trusts), then I would either need alot of help during tax season or I would outsource in a heartbeat! | |
| 9 July 2006 | |
| Sandy, your arrangement sounds okay as it seems the clients consent to the relationship. It might be a good idea to make clear to the client you're not an employee or associated with the partnership, but rather an independent firm doing work under agreement. You never know what kind of trouble that partnership might get into, and you wouldn't want clients believing you were associated with them if that ever happened... | |
| 3 July 2008 | |
| Rev Proc 2008-35 Required disclosure wording for outsourcing. | |
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