Outsourcing US Tax Returns??

[Sierra Mike]

Foreign accountants do U.S. tax returns
Indian preparers will do 150,000-200,000 U.S. returns

SAN JOSE, Calif. - Twelve-hour shifts and seven-day work weeks exhausted accountants at Rucci, Bardaro & Barrett. But most painful for Chris Barrett was the annual "Easter parade" - layoffs of seasonal workers and interns after April 15.

So Barrett, a partner in the Malden, Mass., firm, will send about 150 of his 600 clients' tax returns this year to India, where recent college graduates will prepare Americans' 1040s. Barrett won't hire - or fire - any extra employees, and the average turnaround time for completing returns is already shrinking.

"We're always looking for ways to reduce the pressure," Barrett said. "It frees us up to provide financial and estate planning, which we didn't have time for when we were too busy filling out returns."

Tax experts say Indian chartered accountants - the subcontinent's version of certified professional accountants - will prepare 150,000 to 200,000 returns this year, up from about 20,000 in 2003 and only 1,000 in 2002.

Critics say outsourcing short-shrifts U.S. accountants and exposes unwitting Americans to identity theft, which the Federal Trade Commission ranks as one of the country's fastest-growing crimes.

I'm with the opponents...outsourcing this stuff DEFINITELY opens up the potential for ID theft. Heck, I won't even use my ATM card in China. Handing out my social security number and other assorted info to a bunch of guys on the other side of the planet seems kinda dumb. There's no telling how many dancing girls those guys would buy while squandering the Moore millions...

Anyway, here (http://www.msnbc.msn.com/id/4346068/) is all the doom and gloom.

SM

[cdw]

They should be required to disclose they are sending the stuff out. I see it costs less to do the taxes...are they passing the savings to the customer? I don't thiiink so. I have mine done by a local guy..well, now he's in NY and I send it up there. I would never go to a firm that isn't staffed with people to handle the work they take in. H&R Block, forget it...half those people don't know what they are doing. I guess from now on we will all have to ask ahead of time...of all kinds of companies...accountants, doctors, etc...who does the work, who does the billing, etc. in order to protect ourselves.

[Swamp Fox]

Well, they're apparently doing that in law as well, so perhaps this is the start of a new trend.

[RRedline]

Let me be the first to say that it is insane that anyone would need or feel pressured to have another person prepare his or her taxes. Why is our tax code so damned bloated? What's wrong with having a progressive tax structure (which we have now) with no deductions or penalties?

I spent some time playing around with TurboTax after I filed my own taxes this year, and it is startling to me how alive and well socialism already is in this country.

[Swamp Fox]

The answer is quite complex, especially since I don't do tax law, but here are two reasons:

1) The government, for whatever reason, has decided to give some breaks and exemptions to certain groups, like farmers and/or housewives;

2) It is very easy to rearrange things so as to avoid paying taxes, so there is a cat-and-mouse game between the government and tax lawyers or accountants. So, over time, the Code gets more bloated.

[mikepd]

I trust the partners of the esteemed firm of Rucci, Bardaro & Barrett have very good lawyers for the first case of theft or other shenanigans and they are going to find themselves in some mighty deep kimchi.

If I go to them with my return, they are responsible for the safe keeping of its contents. I imagine there is an ethics board as well when one reaches the rarefied heights that these oh so noble people have attained.

Let the first person who is damaged by their greed hold their feet to the fire. Let the second turn them around and hold their butt as well. Let the third make the entire sorry affair a class action law suit and let the roasting begin!

[Stiofán]

There's already the well know case of an Indian worker threating ehr employer with disclosure of American's financial information over the net unless she was paid more.

Insurers have already recognized this and are starting to increase the E&O premiums for accountants who send work overseas, as recovery from most of those juristictions is nigh impossible. For large firms though, the cost savings far outweighs the added expense at this point.