Outsourcing of preparation of individual tax returns is still not the booming business that was once expected. But since Section 7216 doesn't affect business returns that business is picking up according to vendors who provide outsourced preparation services. And for those who don't want to have their returns sent offshore, onshore outsourcing is also an option.The same trend was reported by Glen Keenan, president of Braintree, Mass.-based Xpitax "A lot of that is the rules are bit different and people's emotions are different are business taxes," he says.
Fees for business tax returns are also higher and also subjected to a lot of variables. Wyle notes his company charges about $100 per return, but that depends on several variables: no more than 100 trial balance accounts to code and no more than five states. For those returns that exceed such limits, the fees go up."We've done returns with 60 company consolidations with every state that has an income tax," he says. Such a return obviously has a much higher fee.
The other avenue open that doesn't involve the requirements facing those sending returns offshore is domestic outsourcing. Keenan says that Xpitax has operated a center in the United States for three years and SurePrep also operates such a center. Often, customers use onshore outsourcing for taxpayers who haven't provided consent for offshoring. The difference is the cost. Wyle says firms needed to have about a $300 fee per return to find use of offshore outsourcing economical. "It's about double that" for the onshore operation, he says.
Where Wyle and Keenan differ is on the pace of outsourced preparation of 1040s. Wyle says business has dropped for all providers. Kennan says the business is starting to pick up and that firms have adjusted to 7216 and are simply getting the necessary permission. "We've seen a real spike in the last year or so," he says.
He also says the reasons for the use of outsourced services has changed. Before the recession, firms couldn't find enough preparers to handle the volume. Now, they are watching costs and utilizing offshoring for the less expensive labor that provides the savings.
