Peter C. Gatto wrote:

- quote -

I also think issues like these is why "there isn't a rule"
that somehow magically applied to this India outsourcing
situation, though some seem to believe that it exists.
Reality is that, as you note, almost all of us "outsource"
to some extent and the difficulty is determining where the
"line" is between permissible and impermissible outsourcing.

For instance, if you efile through CCH I doubt that you've
given any real thought to that as outsourcing, even though
all tax return data has been communicated to CCH. However,
if you use CCH's outsourcing returns option to send a return
to India for preparation, suddenly that *does* appear to be
a security risk to many people. That would be true even
though, frankly, most CCH users couldn't tell you *for sure*
that the computers that CCH uses for electronic filing are
physically located in the U.S. <grin> . (I'm picking on CCH
simply because they offer both services--but the same would
be true of any efiling service provider.)

--
Ed Zollars, CPA
Phoenix, Arizona

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"Michael T Wing CPA" <mtwingcpa[at]yahoo.com> wrote
- quote -

I agree completely.

- quote -

it's all a matter of degrees. How "hard" one's definition
of outsourcing is directly correlated to one's level of
trust in that form of outsourcing.

Peter C. Gatto, CPA

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Peter C. Gatto <pgattocpa[at]excite.com> wrote:

- quote -

I agree that sending returns via US mail and/or courier
represents a form of outsourcing and that confidentiality
issues are at stake. However, I would note this distinction
with respect to efiling:

My clients are fully aware that I will be sending their
return by US mail and they fully in a position to determine
the possible impact that might have on the confidentiality
of their data. (And, yes, over the years 2 or 3 clients have
asked that I NOT mail their return, and some other
arrangement was made.)

However, in the case of efiling, I'd venture to guess that
virtually NONE of the public understands that a large
percentage of such filings actually pass through the hands
of undisclosed third party processors. After all, what part
of "click, zip, quick round trip" says "your data might be
transmitted via a third party processor"? <g
- quote -

It's a free country. <g> But, in my opinion, "outsourcing"
by any other name is still "outsourcing." The key issue, in
my opinion, is whether the client has given informed
consent.

Or, we could look at it this way: Whom do you trust the
least? People at the Post Office? People in India? Or the
people at Intuit? ... It's a perplexing question. <g
MTW

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William P. Brown wrote:

- quote -

It probably doesn't have a problem with ethics, per se,
unless the "old days" timesharing batch input systems
(remember Fasttax and Computax) or even, as Michael points
out, the transmission of data to a third party for
electronic filing with the IRS (CCH, Intuit, etc.) have the
same issue. In all cases, though, the professional is the
one ultimately responsible should confidentiality be breeched.

That means that whatever you do in this regard (including
doing so by hiring someone on a "per diem" basis to handle
overflow returns in your office) needs to be evaluated to
assure that confidentiality is not an issue--and the
professional him/herself has to be responsible for that.

I don't believe that *merely* having Sureprep (or whomever)
"assure" you that confidentiality is taken care of is
necessarily going to be enough.

--
Ed Zollars, CPA
Phoenix, Arizona

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"Michael T Wing CPA" <mtwingcpa[at]yahoo.com> JanZtaxNOSPAM <janztaxnospam[at]aol.com> wrote:

- quote -

I believe there is a difference in outsourcing the
preparation versus "outsourcing" the delivery of the return.
IIRC, you do not send returns to the IRS for your clients;
however, I assume you do send the returns to your clients
who cannot come to your office to pick them up.

If I am correct, then according to your statement, you have
"outsourced" the delivery of the return to a delivery
service (USPS, UPS, Fed Ex, etc.) and personal information
is in the hands of someone other than you, your client and
the IRS.

Both the 3rd party E-file provider and the delivery person
can access the personal information by "opening the package"
(the former electronically and the latter literally).
What's the difference other than GLB notification?

(Yes, I do realize that you would not be marking the
envelope "TAX RETURN INSIDE"; however, the information is
still in a 3rd party's hands.)

My point is that there are differing levels of "outsourcing"
and I disagree with the implication of a similarity between
3rd-party e-file providers and non-US tax return preparers.

Peter C. Gatto, CPA

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William P. Brown wrote:
- quote -

That's a simple problem to overcome. You have a duly
licensed CPA, EA, or attorney on site in India. AIR, most
of these outsourcing firms advertise themselves as already
possessing the necessary staff. Confidentiality remains a
substantial concern, but only slightly more so than here.

/brian

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JanZtaxNOSPAM <janztaxnospam[at]aol.com> wrote:

- quote -

So you don't efile? Or, if you do, you do so DIRECTLY with
the IRS and not through a third party provider?

Anyone who efiles (unless directly with the IRS) is engaged
in "outsourcing" in my opinion.

MTW

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A local San Francisco newspaper columnist has written about
this a couple of times (he's written a number of columns
about other jobs that have gone to India, specifically
medical records transcription. In one case, a woman in India
threatened to put the medical records on the web unless her
pay was increased). It has been mentioned enough that I have
assured my clients in writing that their returns will never
leave my office. One tax preparer said he will stamp "made
in the USA" on his returns.

Jan Zobel EA
Oakland, CA

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rick++ wrote:

- quote -

The comment about security says to me there is no security.
Apparently the person making that comments believes we've
never heard of email, FTP or floppy disks.

In my opinion, a CPA, EA, or attorney who uses outsourceing
is most likely over the line imposed by his/her profession's
code of ethics. No supervision and no assurance of
confidentiality. Circular 230 is also violated in my
opinion.

Regards,
Bill
~~~~
Associate Professor of Accounting
Longwood University
Department of Accounting, Economics & Finance
http://www.longwood.edu/staff/wpbrown/
Opinions expressed by me are mine, not my employer's.

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rick++ wrote:

- quote -

I find it interesting that given all the mailings that
Sureprep sent out for their outsourcing services, they only
claim 150+ client firms.

What I also find interesting is the fact that almost no
*firm* who is doing it is willing to go "on the record" at
this point, nor does Sureprep appear to be able at this
point to bypass the middleman, and simply sell the India
preparation service directly to consumers. I happen to
think the two are related, and that if your clients truly
would approve outsourcing to India, they just might approve
skipping all of the onshore accountants <grin> , at least if
the offshore group is as skilled as they say.

--
Ed Zollars, CPA
Phoenix, Arizona

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Apparently the out-sourcing craze is moving to income tax
preparation according to 60 Minutes at
http://www.cbsnews.com/stories/2003/...in590004.shtml
(about 3/4ths down). Tax preparation fits the bill of being
a knowledge task without needing a strong tie to a particular
location. The comment about security is interesting.

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