Legal And Ethical Implications Of The Foreign Outsourcing Of Tax Return Preparation

Abstract

In recent years, the outsourcing of tax preparation to foreign service providers has grown substantially. The benefits of outsourcing include lower costs and obtaining additional assistance during the busy tax season. However, some have raised both legal and ethical questions regarding this process. Arguments against the practice include problems related to ensuring confidentially of the information transmitted and the inability to adequately supervise personnel in foreign locations. This paper explores the legal concerns and ethical questions regarding outsourcing in light of the Gramm-Leach-Bliley Act, the Internal Revenue Service requirements, and the American Institute of Certified Public Accountant’s Code of Professional Conduct. In addition, the paper summarizes the most recent pronouncement of the AICPA on the subject.