Is outsourcing tax and accounting work new?
No. Xpitax is a pioneer in delivering outsourcing services to accounting professionals. Xpitax was founded in 2002 by CPAs who wanted to better address the challenges caused by the increasingly condensed tax season.
What disclosures are required regarding the outsourcing of tax returns?
Since our inception, we have recommended that accounting professionals make clients aware of their outsourcing arrangement in their privacy statement to ensure compliance with the Graham Leach Bliley Act. In 2009, the IRS amended section 7216 to require practitioners to obtain written consent of disclosure when outsourcing individual tax returns
Many firms include a cover letter with the required consent form explaining the reasons that they have engaged in this relationship: to improve client service, reduce turnaround time, and give employees a better quality of life during 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.
Does Xpitax offer domestic preparation?
Yes, Xpitax offers both international and domestic tax return preparation.
Which size/types of returns do accounting 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 Xpitax supervisor and require little review time back in the accounting 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 U.S. 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 firms. Xpitax has a rigorous, two-month training program, developed by a U.S.-based CPA firm, that begins with classroom instruction on U.S. 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 time returns are submitted.
What about security? Is my client information really safe?
Xpitax has made a significant investment in building a state-of-the-art infrastructure for our outsourcing operations, to ensure the highest level of reliability, performance, and security available. Our India facility was designed expressly for outsourcing tax and accounting compliance work, and therefore has stringent physical and network security measures in place to safeguard sensitive client data. Additionally, Xpitax has designed a fully redundant network infrastructure at a secure Boston area datacenter, with off-site backup and recovery capabilities at a similar facility in North Carolina.
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 accountants communicate directly with the Xpitax tax preparers?
Yes, through a sophisticated internal e-mail system that sits behind Xpitax's firewall. Xpitax's mission was to develop an outsourcing solution that replicated the way accountants interact with their staff internally. Xpitax's e-mail system allows you and your Xpitax supervisors 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 workflow management software is a complete system that can be used for all work performed in your organization. In fact, though XCM was originally designed to facilitate collaboration in the outsource process, we learned very quickly that the process control and efficiency gains apply equally to any process. Therefore, we began marketing the software independently as a standalone system in 2004 through our sister company, XCM Solutions.
Can I outsource more than just tax preparation?
Yes, Xpitax Accounting offers practitioners a full suite of client accounting services to outsource as well. Our model closely mirrors how you would staff up to increase your monthly accounting and bookkeeping work. You simply extend your in-house team with one, two, three or more knowledgeable bookkeeping professionals to perform a variety of routine accounting work, such as accounts payable, accounts receivable, bill payment, write-up work, or even special projects. Xpitax can provide you with a more cost-effective and consistent sourcing strategy to manage all your routine client accounting work, while you and your in-house staff retain higher value service delivery.
What is a SOC report?
SOC reports examine controls over the services provided by service organizations. XCM complies with Type 1 SOC 2 that describes the service organization's system, and the suitability of the design of controls in meeting the applicable criteria of the AICPA Trust Service Principles.
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