Frequently Asked Questions
Is the Xpitax Outsourcing Process new?
No and yes. Outsourcing is not a new concept. Financial institutions, credit card companies, call centers and medical transcription companies have been outsourcing to India for years. Its application to the accounting world, however,
is new. In fact, Xpitax's sister company, KAF Financial Group, pioneered the industry several years ago as the first accounting firm in the US to outsource a significant number of returns and to build a web application that supported
the outsourcing process. Practical Accountant Magazine recognized the program's success by awarding Xpitax their Annual Innovation Award.
What disclosures are typically made by CPA firms to their clients regarding the outsourcing of returns?
Any firm outsourcing with Xpitax should reference outsourcing directly or indirectly in their privacy statement to ensure compliance with the
Graham Leach Bliley Act. Many firms include a statement that they are outsourcing some returns in order to improve client service, reduce turnaround time and give employees a higher quality of life during the busy season. Others indicate that there may be a need to disclose client information to third parties who provide help in servicing their accounts. In either case, as long as the taxpayer is assured that his/her return will be reviewed by the firm's tax department prior to filing, they generally respond favorably to outsourcing.
Which size/types of returns do CPA firms typically choose to outsource?
Outsourcing is an excellent solution for the full spectrum of tax returns, from simple to complex. On the simplest end of the spectrum are children’s returns. These returns go through a compliance check by the India supervisor
and require little review time back in the CPA firm. The more sophisticated, complex returns have multiple brokerage statements, rental properties, Schedule C information, numerous K-1 forms, etc. These returns may also include oil and
gas and farm income. A typical return falls somewhere in between these two extremes.
How are the overseas accountants knowledgeable about US tax laws?
There is an abundance of highly qualified English-speaking Chartered Accountants overseas. With ample training and structure, these accountants are able to meet or exceed the quality of tax preparation done in the "back office" of most
CPA firms. Xpitax has a rigorous, two-month training program, developed by a US-based CPA firm, that begins with classroom instruction on US tax law and various tax software applications. Classroom training is followed by extensive practical
training through the preparation of sample returns of varying difficulty.
What is the average turnaround time for tax returns submitted to Xpitax during the busy season?
Typically, returns are turned around quickly. Depending on the type of return and the difficulty of the return you can usually expect turnaround to be within 1-3 days from the the time returns are submitted to the time questions are
posted by an India preparer. For example, a return submitted to Xpitax by 8:00 p.m. will return by the next morning with questions posted to the web site. Once questions are answered by the CPA firm, returns are completed and sent back
the following day.
What about security? Is my client information really safe?
Nothing is more important to CPAs than the security of their clients' information and identity. We have built each and every aspect of the Xpitax system on this premise. Both the technical and non-technical security measures incorporated into our process exceed those at most CPA firms. From security of information to the physical security of our data centers here and overseas, every measure has been taken to insure your clients' protection. Please contact Xpitax for detailed security information.
Xpitax for detailed security information.
Why is it crucial to have the hosting site located here in the U.S.?
We believe there are two primary reasons. First, the uncertainty of sending privileged information halfway around the world to be stored on servers in India is unnerving to most CPAs and their taxpaying clients. Secondly, with a domestic host, Xpitax can control all programs, tax software and servers-both here and in India-from that hosting facility.
How are files transmitted to Xpitax's web-hosting facility?
Scanned documents (the taxpayer's organizer and source documents) and tax data files from the tax software are transmitted via FTP software using 128-bit encryption to a secure server at the Xpitax hosting facility in the United States.
Do CPAs communicate directly with the tax preparers in India?
Yes, through a sophisticated internal e-mail system (
I-mail) that sits behind Xpitax's firewall. Xpitax's mission was to develop an outsourcing solution that replicated the way accountants interact with their staff in the "backroom".
Xpitax's
I-mail program allows CPAs and the supervisors in India to communicate easily and regularly but does not allow any e-mail capabilities beyond this client/preparer interaction.
Can the XCM serve as a workflow solution for returns prepared In-house?
The XCM web application includes the ability to serve as a workflow solution for both outsourced returns and those prepared in-house. We built this enhancement in response to customer requests for a
single system for all returns,
and for additional efficiencies around an already streamlined process. Visit
www.xcmsolutions.com (link) for additional information.