Are Your Taxes Being Prepared Off-Shore?
By Cindy Hockenberry, EA



Courtesy of NATP


National Association of Tax Professionals (NATP) Appleton, WI – The buzz words for 2004 could well be “Off-shore outsourcing.” Estimates say that in the last three years alone, over 400,000 American jobs have transferred overseas to foreign workers. Might off-shore workers be preparing your U.S. income taxes? Perhaps.

Chances are good that you as a consumer have already encountered communication with a foreign-based customer service representative. Many large corporations already outsource many administrative duties to countries such as India, Russia, and China. Others are jumping on the bandwagon quickly to defray overhead costs. As companies try to cut costs and lower overhead, hiring foreign employees making low incomes has become an attractive and rapidly growing practice. But income taxes? You might think, “Not mine! Mine will be prepared in the U.S.” U.S. accounting and tax preparation firms are not legally bound to disclose where your tax returns are prepared. Last year, an estimated 1,000 income taxes were prepared off-shore. This year the count is already approaching 25,000, and the outlook for next year is estimated at 200,000.

Is it safe to have tax returns prepared off-shore? You need to decide. The standard practice is to gather information in the U.S., transmit that information over the Internet where a college-educated preparer completes the return and sends it back over the Internet to the U.S. based provider. Companies promoting outsourcing take great pains to ensure that security measures are in place to protect consumer information. Safety is always an issue when transmitting personal information on the Internet, both inside and outside U.S. borders; however, consider the increased number of routings and the fact that in the U.S. tax preparers are governed by IRS Circular 230 to protect consumers from unscrupulous tax preparers. The U.S. has no jurisdiction over foreign providers.

Does a taxpayer save money by having lower paid off-shore tax preparers? Not necessarily. In some cases, the savings does not transfer to the client taxpayer. Will off-shore tax preparation outsourcing touch your life? Ask questions. Know your tax preparer. Watch the news. Express your concerns to your tax preparer and government officials. As with everything else, be an informed consumer to protect yourself.

Selecting the right tax professional will save you time, headaches, and oftentimes money. To find a professional tax preparer, look to NATP. NATP maintains a listing of professionals in your area

Members of the National Association of Tax Professionals (NATP) strive to assist taxpayers with information and knowledge. NATP is a nonprofit professional association founded in 1979 and is committed to excellence in the tax profession. In 2004, we are celebrating 25 years of service to tax professionals. Our national headquarters, located in Appleton, WI, employs 41 professionals and 25 instructors. NATP exists to serve professionals who work in all areas of tax practice and has more than 16,500 members nationwide. Members include individual practitioners, enrolled agents, certified public accountants, accountants, attorneys, and certified financial planners. Learn more at www.natptax.com .


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Courtesy of NATP
Published TaxMama.com 3.26.04