Aug./Sept. 2009
Top 4 Tax Research Solutions 2009
Like Google, With Verification
By George Lawton
CPAs doing tax work are facing an ever-changing landscape, made more challenging by the rise of Internet commerce and growth in interstate and international transactions.
"Tax law is always changing, so you need software that keeps you updated," says Stephen Saferight, who has been a CPA for 11 years and is a supervisor for HLB Gross Collins, PC in Atlanta. "The faster we can get the information we need, the faster we can get our work done."
Even small vendors that sell online are starting to run into tax issues when shipping across state lines and using affiliates to help sell products. Fortunately, at the same time that tax issues are becoming more complicated, tax research applications are becoming more sophisticated and easier to use.
"A few years ago, if you were not a blue chip corporation, you did not have to worry about international commerce," says Ron Burkert, senior director of Checkpoint Technology for the Tax & Accounting business at Thomson Reuters. "Now you can be a small business that sells leather products out of Texas, and are all of a sudden held to certain rules that you need to be mindful of."
To help address these challenges, vendors such as CCH, Thomson Reuters, LexisNexis and BNA are adding new features that make finding information and automatically updating content easier. These improvements range from Google-like searches to applications that automate the process of analyzing tax rules across multiple states.
"As the technology matures, people are looking to build more functionality into the platforms," Burkert says. "Initially, you would log in and could print and file your documents, and that was the end. Then hyperlinking came along, and the evolution continued with use of the Internet. As things got more sophisticated, we added things like Create-a-Chart, productivity tools and customization."
Such changes are not just cosmetic. Tax research service providers are updating their content as well. Holly Flater, BNA Tax and Accounting Center product manager says: "We are seeing a change in the hot topics, which is a reflection of what is going on in the economy. While they used to be about megamergers and acquisitions, people are now getting more embroiled in net operating loss issues."
Streamlined Access
CCH has combined its Tax Research Network into a single platform called IntelliConnect. Larger customers have already begun making the transition. Smaller ATX Tax Center users will switch over in September.
Early users are happy with the new platform's simplicity and ease of use. Saferight, an IntelliConnect adopter, says: "It is easy to read and understand, and training doesn't take long. The kids coming from school can find what they want, and everything is on the same screen."
Another noticeable difference from the Tax Research Network is the tri-screen view. IntelliConnect positions the sources on the left, the search results on the right and the documents below. This integrated approach facilitates the use of multiple window panes for entering queries and viewing results.
"The one thing I really like about IntelliConnect is that everything is on one screen and is easy to find," Saferight says.
The multiple tabs bring the multitasking functionality of the Internet to tax research. For example, an accountant might be in the middle of research about estate planning when a client calls about a home office deduction. With IntelliConnect, the accountant could put the estate planning search on hold to deal with the client and then return to it after the call.
The new IntelliConnect platform also adds a document tray, which allows a researcher to store documents online throughout a research session. At the end of the session, the documents can be saved by client or topic so they are readily available for future use.
Productivity Tools
Another trend is improvements that not only find information but also present it in ways that help automate calculations. "One aspect of where the market is going is leveraging technology and then applying it to the underlying content," Burkert says.
Checkpoint, for example, started offering Create-a-Chart, which culls details out of textual information and presents them in chart form. This can help an accountant clarify a sales tax rule across multiple states within seconds.
The chart is a simple grid that lists yes or no to state rules. It can also present information in business English to ease comprehension. "With the old way, you would see each state separately and have to make your own determination state-by-state, which could get pretty time consuming," Burkert says.
Authoritative Sources
Although Google makes finding online content easy, much of the information lacks authority. CPAs need to be able to find information quickly and validate it. Paul Dillon, director of Tax Services at Beers + Cutler in Vienna, VA, has been using Thomson Reuters/RIA Checkpoint to help bridge this gap.
"If a commentator says something, you cannot rely on it for a tax opinion," Dillon says. "You need to find the basis in an Internal Revenue code. I like the ability to readily find things and work your way back to a place of authority. Checkpoint will search RIA documents and BNA portfolios simultaneously for sources of authority."
In many cases, the search provides a straightforward answer, but Checkpoint highlights conflicting information. "Sometimes there will be competing authorities on the same issue," Dillon says. "One court might rule one way and another a different way, so there will be conflicting IRS findings. Being able to find out if there are contradictory things out there is an important part of being able to do tax research."