The Current State of Tax Outsourcing

Over the course of last decade outsourcing has become more and more popular across the globe. Several large as well as small accounting firms are using outsourcing as one of the solutions to further enhance and improve their level of service. Here we will discuss briefly all the benefits which are offered by tax outsourcing while covering different regulatory and security issues which are associated with this business process.

What is the benefit of Tax Outsourcing?

Tax Outsourcing can enhance the efficiency of any organization in several ways, some of them are listed below:

Cost Effective: Outsourcing your Tax work can take away a huge burden on your company's finance as getting your and your client's taxes done offshore if much cheaper as compared to hiring a full time tax professional in house to do the job.

Paperless: By outsourcing your tax work you indulge into a more paperless environment, as most of your communication will be done electronically you will not have to go through the piles of papers in order to locate any certain information as everything will be readily available on your fingertips. Talk Agent provide live chat support service for customers and clients.

Efficient: Tax Outsourcing makes your work more efficient and consistent. Since most of the companies to whom your work will be outsourced are based in a different time zone so most of your work will be done during your OFF HOURS which means you will have all the documentation ready for filing by the time you actually get to work.

Economical: Organization can also achieve maximum cost efficiency by outsourcing their tax working during the off-season at a cheap rate instead of peak season which will cost more.

Improved Service: Tax Outsourcing is plays a vital role in improving your level of service for customers and clients. Since all the tax related tasks are performed much faster and around the clock your in-house staff does not need to be engaged in tasks like organizing files and compiling data. Instead their time and efforts can be redirected towards improving the inbound customer services received by the clients whilst improving other value-added services.

Removing The Risk Factor When Outsourcing The Tax Process?

Outsourcing tax process can be very helpful in several ways as it is already mentioned in the above benefits but it also involves a risk of security and privacy which is the biggest concern for any CPA firm. This risk factor stops many CPA firms from outsourcing their tax work to offshore companies but there is also a way around it to reduce and/or eliminate this risk factor at all. 

The first step which can be taken in order to secure the information is to sign NDA (Non Disclosure Agreement) with the company to whom you are outsourcing your tax processes. It not only limits the sharing of information which is revealed in the tax document but also binds the company processing the tax documents to share any personal  information of any taxpayer with anyone who is not legally allowed to know or be aware of that information.

Furthermore the CPA firm can discuss the measure taken by the offshore company to protect the data which is received by them. This includes the security of the servers (firewalls, encryption etc) on which the data has been stored and  of the software's which will be used to process the documents.

Once the CPA firm is satisfied with the standards of security which are being used to protect the information and data they can sign the aforementioned NDA and start processing the tax papers for their client through the offshore company. In order to check whether all the details are same as they are discussed between both parties and there is no loop hole it is best to process a small batch of work initially as it will reduce the risk of compromising any information and it will also show the efficiency of the offshore company which has committed to perform the tasks.