Blake Oliver discussed in one of his article the bottleneck that tax firms encounter during tax season. One of the biggest challenges CPA firms face during tax season isn’t always preparing returns. Especially with AI Tax prep in picture, things have shifted. The another bottleneck is finding enough time to review them.
We’ve seen firms hire more preparers to manage their growing workload, only to find that their partners are still working long hours. The returns are getting prepared, but they’re piling up in the review queue because the same two or three senior people are responsible for checking everything.
This is where tax preparation outsourcing can make a real difference, provided the offshore team can handle more than preparation.
At Credfino, we supported a CPA firm that filed over 800 tax returns in a single season with just two onshore reviewers. Our offshore team prepared all the returns and had dedicated senior tax professionals reviewing the simple and medium ones. The firm’s onshore reviewers could then spend their time on complex returns instead of going through every file.
The arrangement also helped the firm achieve faster turnaround times.
What made this work wasn’t simply having more people available. It was deciding which work actually needed the attention of the firm’s senior onshore staff.
A lot of conversations around offshore tax preparation focus on how much a firm can save by hiring accountants overseas.
Cost matters, of course. But it shouldn’t be the only reason to outsource. If an offshore accountant prepares a return and sends it to your onshore team for review, you’ve reduced the preparation workload. Your partners still need to review the same number of returns, though.
For a firm handling a few hundred returns, this might be manageable. When you’re dealing with 800 or more returns in a season, even routine reviews can take up a significant amount of your senior team’s time.
Consider a straightforward individual return with W-2 income and a few 1099s.
An experienced onshore tax professional might not need much time to review it, assuming the supporting documents and workpapers are in good order. But that time adds up when the partner has hundreds of similar returns waiting.
Meanwhile, complex business returns and tax issues that genuinely need senior attention are competing for space in the same review queue.
A better approach is to consider how much of the review work your offshore team can handle.
This doesn’t mean handing every return to an offshore reviewer or removing your firm’s oversight. It means using experienced offshore tax professionals for work that falls within their expertise, while keeping complex matters and final approval with the appropriate onshore professionals.
The distinction is important because preparing a return and reviewing one require different levels of experience.
A junior accountant may be capable of preparing a straightforward Form 1040 with the right instructions. Reviewing that return independently requires someone who understands the tax treatment, can identify mistakes, and knows when something needs further attention.
That’s why the experience of your offshore team matters just as much as its size.
We saw the value of this approach while supporting a CPA firm through tax season. The firm’s partners were spending too much time on routine work, which limited the attention they could give to more complex tax matters.
The firm needed additional preparation capacity, but simply adding preparers wouldn’t have addressed the time its senior staff spent reviewing returns.
So, instead of treating outsourcing as a way to get returns prepared, we structured the offshore engagement to support the review process as well.
Credfino’s offshore team handled preparation across the firm’s tax workload, including simple, medium, and complex returns.
The team used traditional tax preparation software rather than relying on AI tools to complete the work.
This is worth pointing out because improving tax season capacity doesn’t always require new technology. Sometimes the biggest improvement comes from making better use of experienced people and giving them clear responsibilities.
The offshore preparers worked on the returns, while the firm’s review process determined which assignments needed to move to the onshore team.
This was an important part of the engagement. Rather than sending every prepared return to the two onshore reviewers, Credfino had dedicated senior tax professionals reviewing the simple and medium returns.
The onshore reviewers focused on complex tax returns.
That division meant the firm’s senior onshore staff didn’t need to spend their review time on every routine return that came through the practice.
It also allowed the offshore team to take greater responsibility for the quality of the work before it reached the firm’s final approval process.
The workflow was straightforward:
Type of work | Who handled it |
Preparation of simple returns | Offshore tax preparers |
Preparation of medium returns | Offshore tax preparers |
Preparation of complex returns | Offshore tax preparers |
Review of simple and medium returns | Dedicated senior offshore reviewers |
Review of complex returns | Onshore reviewers |
Final approval and filing | CPA firm |
By the end of the season, the firm had filed more than 800 returns with just two onshore reviewers.
The firm also achieved faster turnaround times because its review responsibilities were distributed more effectively.
What we can say is that the model allowed the firm to handle a substantial return volume without requiring its two onshore reviewers to personally review every simple and medium return.
And for firms where partners are spending too much time on routine review work, that’s worth considering.
Let’s look at why this model can make such a difference.
Suppose your firm handles 800 returns in a season. For the sake of illustration, we’ll assume 400 are simple returns, 240 are medium, and 160 are complex.
We’ll also assume the average onshore review time is 30 minutes for a simple return, one hour for a medium return, and two and a half hours for a complex return.
Here’s what the workload would look like if your onshore team reviewed every return.
Return complexity | Number of returns | Review time per return | Total review hours |
Simple | 400 | 0.5 hours | 200 |
Medium | 240 | 1 hour | 240 |
Complex | 160 | 2.5 hours | 400 |
Total | 800 | 840 |
That’s 840 hours of onshore review work.
Now imagine your offshore team has experienced reviewers who can independently review the simple and medium returns within the firm’s approved workflow.
The onshore team’s routine review workload would change considerably. Instead of spending 840 hours reviewing all returns, the team would spend 400 hours reviewing the complex ones.
That’s 440 hours of routine review work shifted to the offshore team, or approximately 52% of the original workload.
Of course, this doesn’t mean the firm would eliminate every other onshore responsibility associated with those returns. Final approval, quality checks, and any escalated issues would still require attention.
These numbers are also illustrative and are not the actual figures from Credfino’s client engagement.
The point is to show how much senior review capacity can be tied up in work that doesn’t always require a partner’s involvement.
Even if the actual time saved is lower, having experienced offshore reviewers can give your onshore team more room to handle complex returns.
It may also allow partners to spend more time on tax planning and client advisory work, rather than making routine return reviews the main focus of their day.
Not every CPA firm needs the same review structure.
A firm that primarily prepares straightforward individual returns will have different requirements from one that handles complex partnerships, multistate businesses, and high-net-worth clients.
Before assigning review responsibilities to an offshore team, it helps to understand the type of work your firm handles.
Start by looking at your returns from the previous tax season.
How many were straightforward individual returns? How many involved business income, rental properties, or multiple states? And how often did your reviewers encounter issues that needed an experienced CPA’s judgment?
Those answers can help you decide where offshore review support makes sense.
These might include Form 1040 returns with W-2 income, basic interest income, and standard deductions.
If the return has complete documentation and no unusual tax issues, a qualified senior offshore reviewer may be able to handle the review.
The important thing is having clear standards for what the reviewer must check and when the return should be escalated.
These may include individual returns with Schedule C or Schedule E income, itemized deductions, or certain K-1 reporting requirements.
Some of these returns can be reviewed by experienced offshore tax professionals, depending on their expertise.
However, complexity isn’t always obvious from the type of return.
A Form 1040 involving a difficult basis calculation or an unusual transaction may need more senior attention than a relatively straightforward business return.
Your review criteria should account for these differences.
Returns involving complicated business transactions, foreign reporting, complex basis issues, or unfamiliar tax positions may be better suited to your onshore reviewers.
This is particularly important when a return requires judgment about the treatment of a transaction or involves a significant tax risk.
What matters is having a process that allows the offshore team to identify such issues and move them to the appropriate reviewer.
You don’t want offshore staff guessing their way through complex tax questions simply because a return has been assigned to them.
A well-defined escalation process is just as important as deciding which returns the offshore team can review.
There’s a common mistake CPA firms make when building offshore teams.
They hire junior accountants to manage their preparation workload but expect the work to reach their onshore staff in nearly finished condition.
That expectation can be difficult to meet without experienced review support.
Even a capable junior accountant may need guidance when working through unfamiliar tax situations. If every question and correction goes straight to the CPA firm’s senior team, the arrangement may create more interruptions than expected.
At Credfino, one approach we recommend is adding a senior review layer to the offshore engagement.
For example, if a firm needs 100 hours of junior accounting support each month, it may be worth adding approximately 5 to 10 hours of senior review support, depending on the work involved.
The senior reviewer checks completed assignments before they reach the CPA firm.
This gives the junior accountant access to experienced guidance while allowing the onshore team to receive work that has already gone through another level of quality control.
For a larger tax engagement, the review requirements may justify dedicated senior offshore reviewers, as they did in the 800+ return case.
There is an additional cost to having experienced reviewers involved, but it’s worth comparing that cost with the amount of partner time spent correcting routine work.
The arrangement should also be flexible.
If the preparation team becomes more experienced and consistently meets the firm’s quality standards, the amount of offshore review support needed may change over time.
The goal isn’t to add review layers unnecessarily. It’s to make sure work reaches your onshore team at a quality level that allows them to use their time effectively.
AI has become part of the conversation around tax season capacity, and some firms are already exploring how it can support document processing, tax research, and preparation work.
But AI isn’t a requirement for improving your tax review workflow.
The Credfino case we’ve discussed relied mainly on traditional tax software and experienced tax professionals.
The firm improved turnaround times through the way preparation and review responsibilities were structured.
This distinction matters because it’s easy to assume that buying another tool will solve a capacity problem.
If your firm is already preparing returns faster than its reviewers can clear them, adding more automation to preparation may not have the effect you’re hoping for.
You still need to understand where returns are waiting and whether that part of the process has enough capacity.
AI may eventually help with aspects of review as well, but tax professionals will still need to check outputs and exercise judgment.
For now, firms considering AI-assisted tax workflows should look at how those tools fit into their existing review process.
There’s little benefit in making one stage faster if the next stage cannot handle the additional work.
When you outsource tax preparation overseas, protecting taxpayer information and maintaining professional oversight remain essential.
The fact that offshore reviewers are experienced doesn’t remove the firm’s responsibility for the returns it files.
Before sharing taxpayer information with an offshore provider, CPA firms need to assess the consent requirements under Internal Revenue Code Section 7216 and its related regulations.
26 CFR §301.7216-3 addresses taxpayer consent for certain disclosures and uses of tax return information, including specific rules for disclosures involving preparers outside the United States.
For Form 1040 taxpayers, firms should also review the relevant consent requirements in Revenue Procedure 2013-14. Special rules apply to Social Security numbers and the safeguards associated with overseas disclosures.
Data security deserves just as much attention.
The IRS recommends that tax professionals maintain a written information security plan. Its Publication 4557 provides guidance on protecting taxpayer data.
It’s also important to define how the offshore team will access tax software and client documents, which staff members are authorized to handle specific information, and how completed work will be reviewed.
For CPA firms, outsourcing works best when the external team operates within the firm’s established processes rather than maintaining a completely separate workflow.
Before implementation, a qualified tax or legal professional should review the applicable disclosure, consent, and security requirements.
One of the easiest mistakes is to judge outsourcing by how many returns your offshore team prepares.
That number tells you something about preparation capacity, but it doesn’t tell you whether your firm’s workload has actually become easier to manage.
A more useful question is whether returns are moving through the firm faster without creating additional review problems.
For example, compare the time between receiving all client documents and filing the completed return.
If that time is getting shorter, it’s a good indication that the overall workflow is improving.
You should also look at how often your onshore staff send work back for corrections. An offshore team that prepares a high volume of returns but creates extensive rework may not be saving as much time as expected.
Review hours are another useful measure.
If your partners spent hundreds of hours reviewing routine returns last season, track how much of that work is now handled by qualified offshore reviewers.
The numbers should help you understand where your team is gaining capacity and where additional support may still be needed.
It’s also worth reviewing the quality of the offshore review process itself. If reviewers consistently miss issues that your onshore staff later identify, the firm may need better training or clearer review standards.
The aim isn’t to remove onshore oversight. It’s to make that oversight more focused and effective.
Yes. Experienced offshore tax professionals can review returns, provided they have the right skills and work within the CPA firm’s review process. Firms often assign straightforward returns to offshore reviewers while reserving complex matters for their onshore team.
It can be, especially if the firm has limited preparation or review capacity during tax season. A small firm may not need a dedicated offshore team, but part-time preparation or senior review support could help manage seasonal workload.
No. The CPA firm can continue to set deadlines, manage assignments, establish review standards, and approve completed returns. Offshore accountants support the workflow, but the firm retains responsibility for appropriate oversight and filing.
Costs vary based on the experience of the staff, return complexity, and whether the engagement includes preparation, senior review, or both. Some providers charge per return, while others offer dedicated accountants or hourly support.
No. AI tools may help improve certain parts of the tax process, but they aren’t necessary for a successful offshore engagement. In Credfino’s 800+ return case, the team primarily used traditional tax software, with experienced offshore staff supporting preparation and review.
It’s usually better to begin before tax season. This gives the offshore team time to learn the firm’s software, review procedures, and quality expectations. It also allows the firm to test the arrangement before return volumes increase.
Tax preparation outsourcing is often treated as a solution to a staffing shortage. And for firms struggling to prepare returns on time, that may be exactly what they need.
But when partners are spending too much of tax season reviewing routine returns, the solution may be different.
The CPA firm in our case study filed more than 800 returns with two onshore reviewers because it didn’t rely on those two people to review every return. Credfino’s offshore team handled preparation across the entire workload, while dedicated senior offshore reviewers took responsibility for simple and medium reviews.
That allowed the onshore reviewers to concentrate on complex returns and helped the firm achieve faster turnaround times.
If you’re considering outsourcing for the next tax season, it’s worth looking beyond how many preparers you need. Consider how much time your partners spend reviewing work that an experienced offshore tax professional could handle.
At Credfino, we help CPA firms build offshore teams with the right mix of preparation and review experience.
If you’re looking to reduce your team’s review workload before the next tax season, we’re just a call away.
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