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Is the sun setting on desktop-based tax preparation?
Introduction by Robert W. Scott
When will the sun set on CDs as the preferred method of distribution for tax preparation software? Perhaps no time soon in a market in which ExacTax Orrtax, and Petz still market DOS versions of their tax packages.
But it's not hard to see momentum building for online operations, through both Internet-based tax preparation and email and Web-based organizers that are shoving the marketplace down the online path.
The granddaddy of hosted preparation services is RIA's GoSystem RS, now in its sixth season. During the last tax season, RIA Tax Compliance processed 20 percent more returns through GoSystem RS than in the year before, and the company expects to handle more than 1.2 million returns by the end of the year. This year, the tax preparation system will be joined by an online organizer, MyTaxInfo.
Meanwhile, rival CCH Tax Compliance is cranking up its Global fx Tax, used by 40 firms last year. For the upcoming 2003 tax season, CCH is expecting rapid growth in the use of Global fx "especially as bigger CPA firms analyze the benefits of outsourcing their IT requirements as they relate to tax work," notes Kevin Robert, CEO of the Wolters Kluwer Tax and Accounting unit that includes CCH Tax Compliance. Robert continues, "Based on the results thus far, we anticipate having several hundred firms using Global fx this coming tax season."
CCH is also promoting the end-user-oriented CompleteTax, which accounting firms can place on their Web sites for do-it-your-selfers to complete.
"Clients think they are going directly to the CPA firm," notes Mike Sabbatis, vice president of business development for CCH Tax Compliance. About 200,000 returns were prepared using CompleteTax during the last tax season. Sabbatis notes that if users have difficulty completing a return online, CompleteTax data can be transferred to the preparer's ProSystem fx.
As to the market acceptance of Tax Notebook, CCH's electronic organizer, Sabbatis says that 115,000 were downloaded during tax season, "which is up significantly." The electronic version lets firms save the cost of sending out hardcover organizers while "they get about the same response rate that they were getting from the print organizers," he says.
Also launching a...