For about the past decade most CPA firms have been dealing with how to profitably grow their practices with the ever increasing staffing shortage. As a profession we are well versed in the calculus of busy season workload compression. As we ramp up hours during busy season we increase our output put at the cost of overall productivity. In other words the incremental gains in output are outweighed by the additional hours needed to achieve those gains. This is mainly a function of human limitations in that as labor hours increase output tends to decline as a result of fatigue and increases in human error. As a profession we accept this during busy season because of the seasonal nature of our work. This is similar to the problem faced by many start-ups with the difference being that CPA firms are faced with scarce human capital resources as opposed to scarce funding. This has naturally resulted in the push for outsourcing of various tax return related functions to third parties and overseas. This is a natural economic solution to a staff resource shortage. Although the ramifications of IRC 7216 are just starting to filter through to many practitioners, clearly it has established a significant hurdle when it comes to outsourcing. Although it does not prohibit outsourcing, it will at the very least result in increased administration for managing what clients are effected, what disclosure consents are needed and for making sure that disclosed information conforms with IRC 7216. This effectively cancels out the productivity gains for which most outsourcing arrangements are designed to achieve. I am actually surprised there has not been more uproar amongst our profession on this issue.