Offshoring accounting work to India is taking off with a new report showing that 1.6 million US tax returns will be prepared from India by 2011.

It's a large figure but only a fraction of what's forecast - 22 million returns prepared from the low cost sub-continent:

"Overloaded CPA firms have increasingly been taking to offshoring tax returns preparation to India. The workload in the peak tax season forces CPA firms to employ seasonal tax workers, and let go of other lucrative professional opportunities, which are typically more remunerative. These include advisory services, Sarbanes-Oxley compliance, financial budgeting, MIS reporting, etc. Outsourcing works well to address this situation for CPA firms already challenged by manpower shortages and rising labor costs."

In other words, the offshoring of accounting services to India is different from other services which are usually outsourced because of cost pressures.

With accounting, however, it's more because of a lack of beancounters and demands during the peak tax season. It's a trend I have explored here.

You can find more analysis of the link between the accounting skills shortage and offshoring here.