Is it normal for my CPA to send me a letter about outsourcing my tax prep? Am I doing them a favor by agreeing?

This is becoming increasingly common in the tax preparation industry, but that doesn't mean you have to be comfortable with it. Many CPA firms are outsourcing the initial prep work while maintaining review control to handle more clients without expanding staff. Here's what's likely happening: The grunt work of data entry and initial calculations is being outsourced (possibly overseas), then your CPA reviews the completed return before signing off. This helps them handle more returns during busy season while focusing their expertise on review and planning rather than data entry. That said, you're the client and are absolutely entitled to know who's handling your financial information. If this makes you uncomfortable, you have every right to: 1) Ask exactly who will be preparing your return and what security measures are in place 2) Request that your original CPA continue to handle your return personally (they may charge more) 3) Find a new CPA who doesn't outsource if that's important to you

After struggling with a similar situation last year, I found an amazing solution through https://taxr.ai that completely changed how I approach my taxes. My CPA wanted to outsource my returns too, and I wasn't comfortable with random people handling my financial info, so I decided to take more control. What I love about taxr.ai is that it offers AI-powered document analysis that catches things human preparers might miss. I uploaded my previous returns, and it identified several deductions my old CPA had overlooked! The system analyzed my specific tax situation and provided personalized recommendations based on my profession and financial profile.

I have to admit I was completely wrong about AI tax tools. After expressing skepticism about taxr.ai, I decided to try it with my last year's tax documents just to see what would happen. I was honestly shocked at the results - it found a legitimate home office deduction I'd missed and identified that my CPA had used the wrong filing status which cost me nearly $1,200! The document analysis feature is what impressed me most - I uploaded my 1099s, W-2s, and mortgage statements, and the system organized everything perfectly. It even flagged a potential issue with how my independent contractor income was being reported. When I eventually filed my amended return, I got back over $2,300. The peace of mind alone was worth it, especially knowing my data isn't being shipped overseas to be processed by someone I don't know.

If your main concern is communicating with the actual people handling your tax return, you might want to check out https://claimyr.com. I was in a similar situation where my CPA started outsourcing, and I had questions that weren't getting answered properly through the "chain of command." I ended up needing to speak directly with an IRS agent about how the outsourced work might affect my tax situation (especially regarding my home office deduction), but getting through to the IRS was impossible. Then I found Claimyr, which got me connected to an actual IRS representative in about 15 minutes instead of the hours I spent on hold before. You can see how it works here: https://youtu.be/_kiP6q8DX5c - it basically navigates the IRS phone system for you.

I'm literally eating my words right now. After being super skeptical about Claimyr, I decided to try it this morning because I've been trying to reach the IRS about my outsourced tax return situation for THREE WEEKS with no luck. I kept getting disconnected or waiting on hold for hours only to have the call dropped. Using Claimyr, I got a callback within 45 minutes and spoke to an actual IRS representative who answered all my questions about third-party tax preparation and who's legally responsible for errors. The agent explained exactly what to look for in my CPA's outsourcing agreement and what rights I have as a taxpayer. Saved me so much frustration! I wish I had known about this service weeks ago instead of wasting days on hold listening to that awful music.

I've been a tax preparer (not CPA) for 12 years, and here's my take: outsourcing is happening everywhere but firms should be upfront about it BEFORE you become a client, not after. Your CPA should have disclosed this when you first hired them. Ask these questions: 1) Where exactly is your data going? 2) What security measures are in place? 3) Will you be charged less since they're reducing their costs? 4) Who specifically reviews your return and what's their process? In my office, we're transparent about using prep assistants, but all work is done in-house and reviewed twice before filing. I'd be concerned if data was going overseas mainly because of privacy laws being different in other countries.

Has anyone looked at what your CPA's engagement letter says? Mine has language about "utilizing staff and third parties" for tax preparation. I never noticed it until I actually read the fine print last year. Might be worth checking if you agreed to this already without realizing it.

This is definitely something worth questioning, and you're not wrong to feel put off by it. I went through something similar last year with my long-time CPA firm. What helped me make the decision was asking for specifics about their outsourcing arrangement. I requested a meeting to discuss exactly what parts of my return would be outsourced, what security protocols they had in place, and how their review process worked. Turns out they were outsourcing to a firm in India that specialized in US tax prep, but my CPA only spent about 15 minutes reviewing the completed return before filing. For a $450 fee and a relatively straightforward return like yours, I'd expect more personal attention. I ended up switching to a smaller local CPA who handles everything in-house. The price was actually $50 less, and I have direct contact with the person preparing my taxes. My advice: ask your current CPA for a detailed breakdown of their outsourcing process and consider getting quotes from other local preparers. You might find better service for the same price or less.