Posted on 04/16/2003 5:04:31 PM PDT by John Lenin
WASHINGTON: Millions of Americans sweated it out on Tuesday, struggling to meet the deadline - April 15 - for filing their annual tax returns as accountants and post offices stayed open late to accommodate the laggards. Many will be hoping the Indians have lived up to their reputation for sound number-crunching.
In keeping with the great outsourcing trend that has swept across American businesses, thousands of US tax returns are now being processed in India, a development that has led to quite a stir in the accounting community. Numbers are hard to pin down, but according to Kishore Mirchandani, president of Outsource Partners International, the firm that claims to have triggered the development, more than 10,000 returns went to India for scrutiny this year.
The accounting firm Ernst and Young alone is believed to have forwarded 7500 American tax returns to its subsidiary in India after transferring a tax partner familiar with US tax laws there. Scores of other smaller accounting firms have also sent returns numbering hundreds to India after a pilot study last year showed encouraging results.
"The business is still in its infancy, but we are looking at over 100,000 returns going to India this coming year," says Mirchandani, whose firm has a 300-person operation in Bangalore and is looking to expand because of the growing demand. Several traditional American firms are also lining up to send returns to India, after pilot projects showed significant reductions in costs and turn-around times.
"More and more firms are jumping on the bandwagon after seeing the results. They seem very satisfied with the quality, not to speak of the speed and cost factors," says Bill Carlino, Editor-in-Chief of the journal Accounting Today, which has tracked the trend over the past year.
Expectedly, not everyone is thrilled with the outsourcing of what some regard as sensitive financial information. In the latest issue, the magazine Practical Accountant ran a column by a New York accounting professor questioning the trend on grounds of security and job loss to Americans.
"If you were to stop by any downtown skyscraper where Ernst & Young has an office, I guarantee that you could not just walk to the elevators and go up to the company's offices. You would be stopped by at least one security officer before you got anywhere near the elevator bank," wrote Prof Lloyd Caroll, head of the accounting department at Manhattan Borough Community College. "Yet the company does not appear to be troubled by the notion of putting taxpayer security in peril by sending returns out of the United States."
"The very notion of transmitting confidential tax data - from Social Security and employer identification numbers to financial information - to any foreign country, even Canada, borders on the reprehensible at best, and is treasonous at worst," Caroll fumed.
But accounting firms say security is a non-issue. What they are moving to India are only images and the original data remains with the US firm. The software used by the firms is also web-enabled and is accessed by the Indian subsidiary through a server in US.
Firms also reported a 50 to 60 per cent cost reduction, besides improved scrutiny because they are able to hire better qualified people. In the US, simple returns are often viewed by junior staff who are not CPAs.
Although the pilot studies of last year involved sending simple low end returns, some firms such as Toronto's Horwath Ornstein are now said to be sending high-end returns. In turn, firms are also posting Indian-American CPAs qualified in US tax laws to India
to oversee the work.
"The accounting profession in India itself has improved a great deal and quality should not be a problem," says Ram Ganesan, a Maryland-based CPA, who practices in the United States but sees outsourcing as an encouraging trend.
Sending tax information to India and passing a law to keep your pharmacy and doctor from releasing information to anyone.
If you haven't picked up a prescription lately, you are NOT going to like it. The pharmacy and/or doctor MUST ($11,000 - $100,000 fine) to keep your information from even your spouse unless you authorize them to release it. This is going to cause prescriptions and healthcare to increase because of the added expense to file even more forms which requires extra help.
BTW, you can thank Hillary Clinton and Ted Kennedy for HIPAA - Medical Privacy.
Who Must Comply?
Regardless of whether you are the sponsor of a group health plan, HIPAA applies to you as an employer, if you use protected health information to make employment decisions such as hiring, administering FMLA (Family Medical Leave Act) leave, ADA (Americans with Disabilities Act) accommodations, conducting drug screening and conducting fitness-for-duty exams. You’ll need to comply as soon as possible to protect yourself from costly fines.
I just happened to stumble on your smarmy remark, but it didn't show up in my self search.
And second, how much more should I pay for an item so overpaid union factory workers can have a home that's nicer than mine?
If you're concerned about the job shift overseas, I agree with you. This is not like the "buggy whip" analogy at all, because those people could just go down the road and work for Henry Ford.
If, however.. You're implying that the answer to this is to make everyone union and artificially inflate the price of goods, then you're mistaken.
How much do you want to pay the guy at the McDonalds drive up window for example? He wants a home, pension & full medical.
Union fools think he's entitled to it and think that either myself, or McDonalds Inc. should happily pay for it. That's part (but not all) of the problem. Overpaid, underworked, spoiled rotten, Union Labor.
I've had this done to me twice in the last 5 years, and that is even after they cashed my check which was included with the returnt that I supposedly never filed.
The last statistic that I heard was that US home ownership was at an all time high of 70 percent. You may be right in that the middle class will no longer buy houses, but that would be because they have already bought them. Low interest rates combined with illegals doing construction and materials being manufactured abroad has made housing very affordable. Only the land and zoning clearances are expensive.
I am sorry then, I must have misread sarcasm into you comment that you did not intend.
Apologies, it appears I misunderstood you.
They already have. Have you ever wondered why Broward County had Peter Deustch and Palm Beach has Robert Wexler? Boca Raton, Coral Springs, Tamarac, West Palm Beach and other such cities are "New York South," politics and all.
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