Tax processing and tax preparation

The tax processing outsourcing business has dramatically changed and expanded. The worth of outsourcing this service is increasing with the increase in the cost of mainland tax service.

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. The trend of outsourcing preparation of income tax returns overseas, particularly to India, began about five years ago and shows no signs of abating. Its popularity has grown as tax practitioners have come to appreciate its advantages.

The basic process of tax outsourcing involves six steps :

• The outsourcer gathers the client's tax information and scans it into electronic files.
• The outsourcer uploads these files to the facilitator's website.
• The facilitator encrypts the files and makes them available to the outsourcing partner in India.
• The outsourcing partner prepares and reviews the return, and then posts the return, workpapers, notes, and reconciliations to the facilitator's website.
• The outsourcer downloads the completed return and documents from the facilitator's website.
• The outsourcer reviews and signs the return, and forwards it to the client for filing.