Tax Guru – Ker$tetter Letter

Helping real people win the tax game.

Archive for December 11th, 2007

Outsourced tax prep work…

Posted by taxguru on December 11, 2007

I’ve written several times on the trend for USA tax preparers, including some large CPA firms, to secretly farm out their tax return preparation work to much lower paid workers in India.  I even added this issue to my points to consider when selecting a tax pro.  As long as this is all disclosed to the clients, and they don’t have any problem with not being able to personally interact with their actual tax return preparer, I guess it’s okay. 

This goes completely against the very personal style of  tax prep work I do with my relatively small list of clients; but I guess it makes sense for the big impersonal assembly line operations that measure their success in quantity rather than quality.  However, when this is done covertly without the clients’ knowledge, it’s nothing less than fraud in my opinion.

As an indication that this outsourcing trend is still growing, I recently received the following email from someone promoting their service.  I haven’t independently verified his claims; but it seems that all clients and preparers need to be more open and honest in fully disclosing if they are using a sub-contracted service in India for their actual prep work.   

Subject: Help Wanted Tax Returns – I’m looking for work

My name is KC Truby; I have been a marketing and advertising consultant to accountants for over 25 years.  Four years ago I opened an office Bangalore India where we do tax returns.  

The accountants who use us (last year we did about 3,500 returns) are paying me a low of $45 for a 5 page 1040 up to $100 for a complicated corporate or partnership return of 25 pages on average. 

The 35 firms using us now are charging these returns out at 10 times to 20 times what they pay me to do them.   (We have references of course)

If you would like more details send an email to me at kctruby@msn.com  and I’ll send you an invitation for the next teleconference we do.  You’ll see exactly how this works in less then 20 minutes on documents, quality checks, security, skill set, turn around and cost.  

Thanks
KC Truby 

PS  No $5,000 minimum like Xpitax, we’ll do a test run of 10 returns so you can see how good we are for yourself.

 

TaxCoach Software: Are you giving your clients what they really want?

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Sec. 179 & Date Placed Into Service

Posted by taxguru on December 11, 2007

Q:

Got this address on the internet……..I have a general question
Would really appreciate an answer.
I have a C Corp……restaurant biz…….I am planning  on buying some big kitchen equipment……..and I can buy it in Dec 2007
Is there any reason I can’t pay for it and then Section 179 the depreciation in order to  offset some profit………even if I am not yet using the equipment..

 

A:

As your own personal professional tax advisor should have told you, the Section 179 law is very specific about the new equipment needing to be purchased and placed into service during the tax year.  Just prepaying for something and not actually using it in your business until the next year will not fly.  Any salesperson who told you otherwise is blowing smoke up your ass and cares more about his/her commission than being honest.

The good thing is that when during the year the items are placed into service isn’t relevant.  Starting to use a new piece of equipment on December 31 is just as good for the Section 179 eligibility as any other date during the year, assuming a calendar tax year.

Get with your personal professional tax advisor and s/he should be able to give you other ideas on how to smooth out your income before the end of your tax year.  There are plenty of perfectly legal ways to bleed out corporate profits without having to cheat on Section 179.

If you don’t have a professional tax advisor helping you with your business, you are in very dangerous territory and you need to start working with one pronto before you do any more damage to yourself.

Good luck.

Kerry Kerstetter

 

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