Actually it would not be that difficult to implement. It would result in a significant savings to a title company or VM. We are not talking about a tax deduction which merely reduces the amount of his income subject to taxation. In stead we are talking about a tax credit which is a dollar for dollar reduction of his tax paid. The cost of the title search performed by an American abstractor is to be treated as a tax credit rather than a tax deductible business expense. We are aleady doing this with some tax credits. Take a look at the 1040 you completed for your taxes last year.

For example, if for a particular closing the title company is making $1,000 for preparation of closing documents, arranging for a signing agent, ordering a title search, recording, etc. and he is in the 33% tax bracket, he would pay $330 for taxes before applying his tax deductions. Say he has a tax liability of $275 for this particular transaction after application of his business deductions.. If he limits his outsourcing to an American abstractor rather than a foreign abstractor, and pays the abstractor $50 for a current owner search, the $50 credit for expense of the abstract further reduces the tax liability from $275 to $225. Now multiply that savings by the number of title searches he assigns to native abstractors rather than outsourcing to foreign abstractors. If the title company/VM chooses to outsource the work to a foreign abstractor, it does not get the tax credit.