- Get Section 7216 consent (Rev. Proc. 2013-14 format) before return information goes outside the US.
- Send SSNs only with consent plus an adequate data protection safeguard on both sides; otherwise mask them.
- Offshore preparers need PTINs; review, signature and e-file stay with the US firm.
1. Section 7216: get the client’s consent first
Section 7216 of the Internal Revenue Code makes it an offence for a return preparer to disclose tax return information without permission. Disclosing to another preparer outside the United States, even one in your own group, needs the taxpayer’s prior written consent (Treas. Reg. 301.7216-3).
- For Form 1040 clients, the consent must follow the format in Rev. Proc. 2013-14, including the mandatory statements and the statement that the recipient is outside the US.
- The consent must be signed before the disclosure. If it states no duration, it lasts one year from signing.
- Build the consent into your engagement letter process so it is collected at onboarding, not in March.
2. Social Security numbers need a safeguard
Under Rev. Proc. 2013-14, a taxpayer can consent to their SSN going to a preparer outside the US only if both the US preparer and the offshore preparer maintain an adequate data protection safeguard, and the US preparer verifies it. Without that, mask SSNs before files are shared.
3. PTINs for offshore staff
Anyone who prepares or helps prepare federal tax returns for compensation must have a Preparer Tax Identification Number. That includes preparers outside the US; those without an SSN apply with Form W-12 together with Form 8946.
4. Security: your plan covers the offshore team
- Tax preparers must keep a written information security plan under the FTC Safeguards Rule (see IRS Publication 5708).
- Give offshore staff access through your remote desktop or portal, with multi-factor authentication and accounts you can disable.
- Keep files off local machines, block downloads and USB storage, and log access.
- Put confidentiality and data-processing terms in the contract, including breach notification.
5. Keep review, signature and e-file in the US
The offshore team prepares; your licensed preparer reviews, signs as paid preparer and files under your EFIN. That keeps professional responsibility where your clients and regulators expect it.
Checklist before you send the first file
- 7216 consent in the Rev. Proc. 2013-14 format, signed and on file
- SSN safeguard verified, or SSNs masked
- PTINs for every offshore preparer
- Security plan updated for offshore access
- Contract with confidentiality, data and breach terms
- Review and sign-off workflow in the US
Looking for a team that works this way? See outsourced accounting and tax prep for CPA firms.
Sources
- IRS: Rev. Proc. 2013-14
- IRS: Section 7216 frequently asked questions
- IRS: PTIN requirements for tax return preparers
- The CPA Journal: considerations for tax return preparers outsourcing overseas (Aug 2025)
Frequently asked questions
Is it legal for a CPA firm to outsource tax returns to India?
Does a client have to consent to offshore tax preparation?
Can an SSN be sent to an offshore tax preparer?
Do offshore tax preparers need a PTIN?
Please note: this guide is general information based on the rules as they stood on the review date above. Regulations and RBI/CBDT procedures change often — please get advice on your specific facts before acting.