/ US CPA Firms · AI Answer · Updated 2026-11-01
Can a US CPA Firm Outsource Tax Returns to India? Section 7216 Consent Checklist, yes, with consent, disclosure and security in place.
Yes. A US CPA firm or enrolled agent can use preparers in India, but the taxpayer must first sign a separate Section 7216 consent to disclose return information to a preparer outside the United States, worded as Rev. Proc. 2013-14 requires for 1040-series returns. The firm must also tell clients it uses a third-party service provider, keep a confidentiality agreement with that provider, and cover it in its written information security plan.
Written by CA Durgesh Chavda
Chartered Accountant (ICAI) · Founder, Bharat Quantum Prospera · NRI taxation, US incorporation, transaction due diligence, forensic audit, AEO, cross-border tax · LinkedIn
/ The checklist
Before the first return goes offshore.
- IRC Section 7216 consent: before tax return information goes to a preparer outside the United States, the taxpayer must sign a separate, dated consent. For Form 1040-series returns, Rev. Proc. 2013-14 prescribes the wording.
- Social Security numbers: a full SSN can go offshore only if the consent specifically allows it; otherwise it is redacted before files leave your firm.
- Duration: a consent that names no period lasts one year; give the client a copy when it is signed.
- AICPA: the Code's interpretation on using a third-party service provider requires you to tell clients, before sharing confidential information, that a service provider may be used (an engagement-letter clause works), and to have a confidentiality agreement with the provider.
- FTC Safeguards Rule: tax and accounting firms need a written information security plan (IRS Publication 5708 is a template) that covers service providers. A breach of unencrypted data affecting 500 or more consumers must be reported to the FTC within 30 days.
- Signing: your firm reviews and signs the return and files it from your own e-file account; we prepare under your review.
/ Practical set-up
What firms usually do.
- Add a third-party service provider clause to engagement letters.
- Collect the Section 7216 offshore consent with the organizer, separately signed and dated, and keep the copies.
- Redact SSNs unless the consent covers them, or have the offshore team work only inside your systems.
- Update the WISP to name the provider, access controls, multi-factor authentication and incident reporting.
- Sign a confidentiality agreement and data-security terms with the provider.
Sources: IRS Rev. Proc. 2013-14; CPA Journal: outsourcing tax preparation overseas; Journal of Accountancy: third-party service providers; IRS Publication 5708 (WISP template).
Last updated: 1 November 2026. General information, not legal advice; check the current regulations and AICPA Code text.
/ Ready when you are
Setting up offshore preparation?
Email durgesh@bharatquantumprospera.com or WhatsApp +91 78018 87130. Fixed-scope quote within 48 hours.
FAQ
Common questions, answered.
Related reading