Scaling Right: How Strategic Outsourcing Empowers Global Tax Firms

Sufyan: I’m Sufyan, your host — back with another episode of CPA Talk Series! Welcome to a fresh new episode of the podcast where we explore how forward-thinking CPAs, tax advisors, and accounting firms are staying ahead with smart global strategies.

Today, we’re joined by Tony Malik, Founder of Point Square Consulting — a firm renowned for its razor-sharp focus on international tax and complex offshore compliance.

As an international tax specialist and Enrolled Agent, Tony brings years of experience navigating FBARs, Forms 5471, 5472, FATCA filings, and other foreign disclosures — the kind of areas that many firms find daunting. In this episode, we’ll dive into how firms like Tony’s manage high-stakes international tax work without losing focus on growth — and how strategic outsourcing can play a key role in scaling up without compromising precision.

If you’ve ever faced the challenge of handling cross-border clients, audit defense, or staying compliant in the global tax landscape — and wondered whether offshore talent could be part of the solution — you’ll find this conversation especially insightful.

Tony, thank you so much for joining us today.

Tony: Well, it’s a pleasure to be here, Sufyan, and thanks for the invitation to be here.

Sufyan: Absolutely, our pleasure. So, let’s dive in very quickly without wasting much of your time. If you can just walk us through your journey, Tony, from being a corporate accountant and a part-time master’s student to founding Point Square Consulting, it is truly inspiring.

So, what were the key experiences like working through FATCA or at a boutique international tax firm that shaped your approach to building your own firm?

Are there any decisions you would have approached differently? What are your thoughts on these things?

Tony: I have plenty of thoughts on these things.

So, I guess I’ll start first with my journey and then talk about, you know, like 20/20 hindsight imbued me with.

So, by the time I was getting my master’s degree in accounting, I was already working as a Covell accountant for one of the top tax attorneys in Atlanta. And this particular law practice was 100% dedicated to criminal and civil tax controversies and almost nothing international. So, it was purely a domestic tax controversy.

Got to work on all types of things related to corporate tax division, organized crime, and how the IRS was busting them, pursuing them, and what my role was. So, this was all very, very interesting work, but again, it was all domestic.

But around 2009, 2010, the landscape of U.S. International Tax Practice really started changing because the law known as the FATCA, the Foreign Account Tax Compliance Act, went into effect. And pursuant to this law, what was going to happen is the IRS was going to start focusing on international enforcement. And the two partners at that firm at that time had already been in practice for over 30 years, and they were getting close to retirement. So, I was a younger guy working for them, so they pulled me to the side and they said, Tony, this is an area which is going to be big in the future. We already have a specialization and we’re getting close to retirement, so it really doesn’t behoove us to start learning this at this point.

But we want you to take the lead, and we want you to start developing an expertise in this area, because we’re anticipating picking up more work over here, and we’ll support you in whatever way you need.

We’ll enroll you in professional continuing education courses, professional legal education courses to help you learn this, but we want you to take the lead on this.

Sufyan: So, and you’re talking about 1990s?

Tony: No, I’m referring to the late 2000s, around 2009–2010, when I first got into international tax. At that time, much of the focus was on foreign bank account reporting and correctly classifying different investments for U.S. tax purposes. This gave me my first hands-on experience in international tax after several years in domestic tax.

After gaining that initial experience, I joined a boutique international tax firm founded by two former Big Four professionals—one a partner in New York, the other a senior manager in Miami. I got to handle heavy international tax and cross-border transactional work, which provided excellent experience, although I didn’t fully agree with how the firm was run.

By the time I completed my master’s degree, I had built my own book of clients while working as an independent contractor for the boutique firm. Attending professional association meetings and networking helped establish my reputation in this niche.

Eventually, I realized it was time to start Point Square Consulting. When I approached the boutique firm about formal employment, their non-committal response made it clear that starting my own practice was the right move.

Harsh: No, we don’t want it.

Tony: Yeah, that’s not an offer that speaks to us.

So, I went home, I was somewhat dejected, but in retrospect, it was probably one of the best things that happened to me because in about a month, I had made a firm decision that I’m going to turn in a notice. And I’m going to start developing Point Square, and, you know, smash the rear-view window. And here we are in 2025 now.

Sufyan: Awesome. Any stories behind the name of Point Square? Any philosophy for that?

Tony: There is actually, so that’s a good question.

So initially, I mean, the idea was that, you know, the services that we’re going to offer are going to be so precise that they are going to be on point. And they’re going to be so on point that you can basically– it’s going to be like point squared is going to be from the exponential. So based on that, I was trying to figure out what an appropriate logo would be. And I’m running short on ideas, so I decided to retain the name, but then come up with a different logo. And I was like, OK, instead of squared, we’ll go with a square, and we’ll put a dot into it and try getting creative about it. So that’s how it emerged.

Sufyan: Interesting. Yeah.

So, the second part of the same question, any decision that you would have approached differently, anything that you could have done differently, you ever think about that?

Tony: Oh yeah, yeah, of course I think about that.

I mean, there’s, of course, a lot of things that I would do differently, but there’s a couple of things that come to my mind. If somebody, if a scientist came to me and they said, Tony, we’ve developed a time machine and you can use it to do whatever you want, one of the things that I suspect I would do is go back and start Point Square Consulting and immediately start putting in some processes in place, which I did not put when I first started because I was so overwhelmed with everything.

But, you know, in retrospect, yeah, in retrospect; I feel as if that was something that was manageable. So, one of the things that I would do differently is I would develop a better system for filtering prospective clients, because initially when I started my practice, let alone not being, uh, cognizant as to how to properly price engagements, I did not even know how to best select clients, how to best pick clients.

I ended up picking up a lot of clients on whom I actually lost quite a bit of money. So, these were either no profit or low profit clients who would demand all types of things that were beyond the scope of the engagement. And I just to keep them happy, I would begin offering them basically the chop for, you know, no counter billing benefit because I was just happy I had work at that time. So that’s something I would do very, very differently. I would be much more selective about whom I would take on as a client.

The other thing that I would do differently is I would have more confidence in my abilities because when I first started off, I was more diffident than I should have been. And what I mean by that is I had all the wherewithal, I had the technical expertise to take on some good projects, but because there was a lack of confidence on my part, I turned those projects down. And after being in the game for almost two decades now, I realize that was a big mistake because I did have the expertise to take on those roles.

But because I was diffident, I felt as if I needed more training or more expertise.

And now that the bulk of my practice, now that the bulk of my practice is actually coaching CPAs, enrolled agents, tax attorneys on international tax cases, I realize that, you know, I was so far beyond them, even when I first started, when it comes to international.

But these people are bolder and they would take on the work and then on an as needed basis, they would team up with a specialist such as myself to get them to wherever it is that they need to be in order to serve their client, which is a much wiser approach, a much smarter, much more business savvy approach than what I did, which was that, hey, you know, we’ll take a linear path and just gain more experience. And once I’m completely satisfied and confident that I can handle this work, it’s only then that I will take on some of these challenging cases. So that’s something that I would do differently; that was a mistake on my part.

Sufyan: Well, I mean, I get it completely, and I think it’s pretty natural to have this kind of approach, especially dealing with international taxes, which is always full of challenges. So having that lesser amount of self-belief is quite natural, and also taking up anything and everything comes your way when you have just started the business is also pretty natural, because that is the stage when you are building up your business, so you wouldn’t dare to say no to any business coming your way, even if it is like, you know, that it will not give you the kind of profit that you should get. You won’t get the returns, but you still do it.

But I’m glad that you have a different perception now, and it is surely going to help all the listeners understand, especially if they’re starting something similar. So, like I was saying that international tax always demands precision, and it also requires deep expertise. So, in your experience, what tasks within this space are ideal for outsourcing and what function should remain in-house and why?

Tony: That’s a very balanced question. There are clear benefits to outsourcing, especially tax generalists who often wear too many hats — marketing, bookkeeping, admin, and technical work. Trying to do everything can lead to burnout, lower client satisfaction, and revenue ceilings because routine tasks consume so much time.

Certain tasks are ideally suited for outsourcing. Bookkeeping, payroll, and even income tax returns (as long as review systems are in place) can be efficiently delegated. This also helps firms manage unpredictable workflows without the burden of fixed payroll costs.

However, some work should remain in-house due to high stakes. Complex international information returns, like Forms 5471, 5472, and treaty-based analyses (Form 88-33), carry significant penalties if done incorrectly — starting at $10,000 per form and rising from there. FBARs under IRS amnesty programs also require careful handling to avoid jeopardizing the taxpayer’s eligibility.

The key is to outsource only trusted partners with whom you have a strong relationship, clear systems, and ongoing communication. With the right setup, outsourcing allows firms to scale efficiently while protecting both client outcomes and professional liability.

Sufyan: Yeah. I wouldn’t hesitate to say that I have a bit of a disagreement here, Tony. Not a disagreement, just my different way of looking at things. So first, I agree with you that one should not be doing everything by himself. And I usually tell this to my clients and prospects that you cannot be an accountant and a business owner at the same time. You get to choose what you want to be – you want to be an accountant, or you want to be a business owner. Because then if you’re not in the driver’s seat of your business and you are doing everything by yourself, then you won’t move your business anywhere. The first thing you need to learn to be a good businessman is the art of delegation, be it to your internal team or to the external support that you get from an outsourcing team. With regard to FBARs — I agree with you. But on Forms 5471 and 5472, since there’s no regulation like 7216 for 1040s, here’s what we do — and I’ll give you a real-life example.

A lot of time it so happens that a CPA has not worked on 5471 and 5472 at all, and doesn’t know what legislation changes have been incorporated, and what has changed since their CPA certification. And today in this kind of scenario, they do choose an outsourcing partner like us.

Tony: Oh wow.

Sufyan: Yeah, because at Datamatics Business Solutions, we have CPA-level, ACCA-level, and EA-level professionals who specialize in these areas. So, any complexity — whether it’s Form 5471 or 5472 — we welcome it. But I once again agree with you that it should be considered only when they do not have the capacity, or capability, to manage it internally.

And if someone is having a practice where they do get a lot of clients with this kind of requirement, then they obviously know how to take care of it. That’s a different story altogether. I’m only talking about the scenario wherein a CPA or a tax practice owner hasn’t done it for years, and suddenly there is a client with this requirement, maybe a new client. So, in that kind of situation, they do come to us for support and we fulfill it.

Tony: Yeah, okay.

Sufyan: So, let me turn in a different direction and let’s talk about the hesitation to outsource. I’m not aware if you speak to a lot of CPAs and a lot of accounting companies wherein they do mention this, but since I speak with three to five CPAs and tax practice owners on a daily basis, I see that many firms hesitate to outsource due to concerns like control, data security or even insurance coverage. So, from your perspective, how real are these concerns and what steps can firms take to confidently and securely integrate outsourcing into their existing operations, Tony?

Tony: That’s a great question. I think concerns about ‘loss of control’ are often overblown. Outsourcing shouldn’t be looked at much differently than delegating to an employee. The key is to start small, develop the relationship, and put proper systems in place: clear checklists, expectations, work reviews, and timely feedback. Over time, you can expand the scope of the work you delegate.

Outsourcing also helps manage unpredictable workflow — when work peaks, you have extra capacity, and during slower periods, you avoid the fixed costs of additional staff. With the right processes, you also mitigate risks like preparer penalties, because you review and approve all work before signing.

It’s important to discuss practical considerations with your outsourcing partner: software compatibility, data security protocols, hiring practices, and insurance coverage. Whether your team is in India, the Philippines, Mexico, or the U.S., these are all manageable with proper communication and alignment. By taking these steps, you can confidently leverage outsourcing while maintaining quality, compliance, and control.

And, finally, get blessings from your U.S.-based insurance — your E&O insurance carrier — as well. I think they’d be fine with it if the person in the U.S. is following the letter of the rules. They should be fine because, when you’re outsourcing work, you must — pursuant to Section 7216 of the tax code — get written permission from the client confirming they’re okay with the work going offshore. So if you’re doing that, the insurance company should cover you, I would imagine.

If you reach out to your insurance representative, you can usually get clear guidance on this. Outsourcing is now an established practice in the U.S., not a fringe idea, and insurance companies are aware of this. They understand that many professionals rely on outsourcing to run their practices effectively, and they have processes in place to provide coverage. Taking all of this into account should help alleviate any anxieties or hesitations U.S. firms may have about leveraging outsourcing.

Sufyan: Makes sense. And thanks for highlighting these points, Tony, because I get this kind of question almost daily from our prospects that I talk to. So, I have not been covering a lot of these that you mentioned. So, thanks for educating me on these. I do cover things like, yeah, I do cover things like for that matter, Datamatics Business Solutions is an AICPA, SOC2 compliant company. We are ISO 27001 certified. Because of these certifications, we follow policies which are very stringent in nature. And that makes the whole, you know, and that makes the whole ecosystem foolproof enough. And then with regard to the IT infrastructure that we use, we never take any information from our client system to our system. It always remains on their platform, their software, and their cloud. So, I mean, at times I think about does 7216 really matter because they are not actually sending any information to us. We are rather getting onto their platform, their software, just like any other remote employee would do, and we take care of the work in their software itself. So first of all, there is no hassle of transferring the files from here to there. Nothing goes out of their network, and everything remains in a very limited and controlled environment.

Tony: Very good.

Sufyan: These are exactly the things I’ve been talking about. And of course, the third point you mentioned — about hiring the right kind of staff — is key. When a CPA firm partners with an established organization like ours, and I’m not saying we’re the only one — there are some strong players and well-established outsourcing companies out there — it becomes critical to hire the right people. Because no matter how robust your systems are, if someone doesn’t have the right values or intentions, they’ll eventually find a loophole. So yes, I’ve been emphasizing these aspects, but the other points you raised are spot on. I’ll definitely bring them up in my next customer call, Tony.

Tony: That’s, that’s good.

Sufyan: Okay. In the first question, I told you that 5471, 5472, international tax, I mean, I always have heard about them being very complex. ‘No, we don’t want to do it.’ ‘We are outsourcing because we don’t do it or we don’t want to do it.’ So, with global tax rules constantly evolving, first of all, firms need to stay very sharp. So how can outsourcing help free up their valuable time and mental energy for professionals who focus on high impact areas or continue their education or pursue any client strategy that they want to use?

Tony: Right, right. Time and mental energy are extremely precious for knowledge workers, so we need to be wise about how we allocate them. If too much of our time is spent on routine tasks, we lose the opportunity to focus on higher-value, more lucrative functions. We also miss out on the chance to specialize — whether it’s international tax, estates and trusts, multi-state taxation, or M&A taxation. Keeping up with constantly changing tax rules in any specialty is already a gargantuan task, and if your time is tied up in tasks that could be delegated, you simply don’t have the bandwidth to develop expertise or stay relevant in the market.

Even if you can carve out the time, mental fatigue can prevent you from effectively handling these higher-level tasks. Routine work consumes cognitive energy, leaving you too drained to research regulations, interpret the law, or apply it to client-specific situations — for example, preparing complex forms like a 5471. Cognitive fatigue isn’t just psychological; it has very real physical effects, impacting your ability to perform at your best.

Sufyan: Interesting.

Tony: Yeah, yeah, yeah.

Tony: So, when mental fatigue sets in, Sufyan, several parts of the brain are affected — and that’s why you’re not able to perform at your best. One of them is the anterior cingulate cortex, which is responsible for focus and decision-making. Once fatigue sets in, activity in that part of the brain decreases. The other area that gets impacted is the hippocampus — the part of the brain responsible for memory. And finally, when mental fatigue sets in, your brain releases a lot of cortisol. And cortisol affects neurotransmitter function — so basically, your brain isn’t operating at full capacity.

So even if you have the time, that’s just one part of what’s required to do your work. The other — and more important — part is your mental audit. If you don’t have that, and if you’re not wise in managing it, then you’ll be at just as much of a disadvantage as someone who never had the time in the first place. We really have to be smart about how we allocate our time and energy, especially if we want to stay relevant; we intend to continue being heavy hitters in the industry. We really need to develop the wisdom to know where we’re going to spend our energy and resources, especially when workflow is unpredictable. You might want to partner with someone.

Sufyan: Wow. Thanks for taking some time to do some study around science, which is obviously not your subject, Tony. I’m glad you did. And this is interesting. You know, this is why these kinds of podcasts do help, not only for the listeners, but for the host and for the guest both – we learned a lot of things. So thank you so much for that.

Tony: Sure

Sufyan: Well, we are already like in the 39th minute of the podcast.

We are already running over time.

But one last question for you, Tony, looking ahead to the next six, seven years and even beyond that, how do you see the role of outsourcing evolving in the tax industry, particularly for the firm who want to scale up, who want to adapt to global complexities and stay competitive in the talent market?

Tony: Well, first off, I just want to say that time really does fly when you’re having fun, right? I didn’t even realize how long we’ve been chatting.

I’ll try to answer this as quickly as I can. I think we’re going to see several phases of impact as outsourcing becomes more pertinent and relevant to U.S.-based firms. This trend is only going to accelerate over the next six to eight years — mainly because of the ongoing talent shortage in the U.S.

Another big factor is comfort. About 10 or 15 years ago, outsourcing was considered a fringe idea. Not many firms were ready to jump on that bandwagon. But today, it’s not only acceptable — it’s seen as a real advantage. U.S. professionals are far more comfortable working with offshore teams now.

Clients, too, are becoming more receptive. They see that when part of the work is handled offshore and reviewed domestically, costs go down without compromising quality. Plus, with disclosure requirements like the client authorization under Section 7216, there’s transparency — which builds even more trust.

Add to how easy communication has become — video calls, instant collaboration, real-time updates — and the whole process feels seamless. It’s almost like working with someone sitting in the office next door.

So yes, I believe outsourcing will continue to expand rapidly in the next several years. And if we look further ahead — say 10 or 20 years — I think the landscape will change even more dramatically. Offshore firms will move beyond just being backend support. They’ll start entering the U.S. market directly, working with clients without the traditional CPA firm ‘middleman.’

In fact, that’s already beginning. I know several professionals outside the U.S. — in Canada, Mexico City, and elsewhere — who do outstanding U.S. tax work. And firms like KNAV in India are great examples of how offshore providers are delivering top-quality service and building global credibility.

Tony: And they are not an outsourcing firm.

Sufyan: They’re a CPA firm; I know them, yeah.

Tony: Yeah, they’re a CPA firm — not U.S.-based but based in India — and they also have a U.S. presence. I know someone they hired specifically to represent them here in the States.

I think we’re going to see more of these kinds of arrangements, where offshore firms directly enter the U.S. market, cutting out the middlemen. It’s the logical next stage of evolution for the industry, and it makes perfect sense from a business standpoint.

What’s important to understand is that these offshore professionals aren’t just back-office staff — they’re highly intelligent, skilled people. Many are becoming U.S. CPAs, Enrolled Agents, even taking the U.S. Bar Exam and becoming tax attorneys.

I know, for instance, an Israeli lawyer who’s licensed to practice in the U.S. but works out of Israel — and he’s exceptionally good. So, when you have these non-U.S.-based professionals with U.S. credentials, deep expertise, and growing acceptance in the market, it’s only natural that they’ll start entering the market directly.

That’s my view of where the industry is heading — not immediately, but in the long term. It’s an evolution that’s already beginning to take shape.

Sufyan: No, absolutely — you’re spot on, Tony. This trend is already well underway. To give you an idea, at Datamatics Business Solutions, we do very limited outreach. Most of our current clients found us through Google searches when they were researching outsourcing companies, and they reached out directly.

Regarding captive centers, many large CPA firms, especially the top 100, maintain their own centers in India, the Philippines, Pakistan, and other locations. Even with those setups, managing a captive center can be challenging.

That’s why we partner with some of these top CPA firms — I can’t name names — who still choose to outsource certain work to us. They prefer that basic data entry tasks are handled externally, allowing their employees to focus on higher-value, revenue-generating activities.

Tony: Well, no, you guys are definitely heavy hitters in the industry. So yeah, I mean, this is– I’m learning a lot from you. Thank you.

Sufyan: 50 years, what it takes to be a giant like what Datamatics is today. In fact, last Friday, we celebrated our 50th anniversary, Tony.

Tony: Oh, all right. Well, happy 50th.

Sufyan: Yeah, I’ll send you some pics and videos from the celebrations.

Tony: Good, good. I look forward to it.

Sufyan: All right, well, thank you so much for your time, Tony. It was a very interesting conversation with you today. I really enjoyed talking to you and I’m sure our listeners must have enjoyed it equally. Thank you for your presence today.

Tony: Well, the feelings are mutual, I can assure you that. So, okay, so I’m gonna get on with my day over here and thank you so much. This has really been a blast.

Sufyan: Thank you.

So, all the listeners, this is a wrap on today’s episode of the CPA Talk series. A big thank you to Tony Malik for sharing his journey and insights on managing complex international tax work while scaling smart. Thanks for listening, and until next time, keep building forward. Thank you.