Financial terrorists and the offshore outsourcing of tax return preparation

Shifting the process of tax preparation overseas to India and other countries has become more popular in recent years for many reasons including cheaper labour, reduction of seasonal labour needs, and the ability to have services performed around the clock due to time zone differences. Outsourcing can have a positive effect on a firm through increased efficiency and the ability to offer a wider variety of services to clients by having the more basic and time consuming tax preparation tasks completed outside of the USA. However, there are certainly some downsides to off-shoring tax preparation services including the lack of control over the foreign company's personnel as well as the danger of identity theft. This paper suggests that with the current status of relationships between western and other countries, with no legal jurisdictions overseas, it is very dangerous to have so much information of taxpayers to be sent offshore. If such information is obtained by the financial terrorists, it could have devastating consequences for the home countries. We use the current status of outsourcing tax return preparation and how this unregulated outsourcing could end up helping terrorists.