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US: Tax returns to India causing a stir

Computer work can be done more cheaply in countries like India, and US companies are taking advantage of this. It becomes a problem when the material sent there contains confidential information, e.g. income tax returns. See this report from Washington to the Times of India (16/4/03 titled "US tax returns to India causing stir": " 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". continued......

Ronald Hilton - 4/18/03