Keeping up with Taxes


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With fewer than 400 clients, Ken Sibley, managing director of CPA firm Sibley and Co., may not have the expansive client base of some other firms, but that doesn't mean his need for accurate tax research should be underestimated. "Our practice is focused on high net-worth families and the issues are more complex so it makes it important to have a great research product," says Sibley of the Dallas-based firm that serves several clients who are worth more than $1 million.

To meet his research needs, Sibley has been using Thomson Tax & Accounting's Checkpoint online research system for nearly a decade. For Sibley, as well as others in the tax and accounting profession, staying abreast of the latest developments in legislation is as critical as ever given today's complex tax laws and stricter auditing standards and guidelines.

In fact, according to Ken Crutchfield, vice president of strategic marketing for Thomson Tax & Accounting Research and Guidance, the 109th Congress made more than 1,700 amendments to the Internal Revenue Code-marking a 40 percent increase over the 108th Congress. Meanwhile, in 2006 more than 2,000 bills were introduced at the state and local level with tax provisions-the highest number in history.

Partner Insights

"An enduring trend in tax research is the desire to keep pace with changes in legislation, regulatory pronouncements and judicial interpretations that affect tax administration and tax practice," adds J. Christine Harris, editor of Financial Reporting Watch at Tax Analysts. "While technological developments can facilitate that inclination, particularly by providing researchers with up-to-the-minute information, new technology must also strive to provide researchers with results that are meaningful and credible."

To further complicate matters, the industry continues to battle the challenge of finding and retaining quality staff. Today, many firms are finding they must do more with less.

According to the American Institute of CPA's PCPS Survey of Top 5 Practice Management Issues issued in November 2005, the 865 respondents who completed the survey ranked finding and retaining qualified staff as the top issue (18 percent) followed by keeping up with changes and complexity of tax laws (7.6 percent).

To help facilitate workflow efficiencies in today's tough marketplace, firms are increasingly aiming to work on a single platform that is easy to navigate, compared with working with multiple platforms with different interfaces for tax and accounting research, guidance and work tools. Those vendors that can effectively meet their needs undoubtedly stand to benefit.

In May, Thomson Tax & Accounting combined the PPC and RIA brands with Checkpoint to provide users greater access to a wide range of integrated information. Checkpoint products integrate with other Thomson Tax & Accounting products such as UltraTax CS and GoSystem Tax.

According to the company, the combination of PPC's Accounting & Auditing guidance and e-Practice Aids, delivered on the Checkpoint platform and integrated with primary source materials, provides users with a complete line of research, guidance and workflow tools.

Also last year, PPC began providing auditors with tools and guidance for implementing the AICPA's new Risk Assessment Standards, including implementation guidance and e-Practice risk assessment tools. With the Standards going into effect in 2007, PPC audit guidance and practice aids will be updated to provide "how-to" compliance with the new Standards-all integrated on the Checkpoint platform.

According to Ron Burkert, director of product management for Checkpoint, the company is launching in the spring a new daily e-newsletter called the "Accounting and Compliance" Alert to help keep professionals abreast developments.

LexisNexis Ramps Up

Looking to better meet the needs of tax and accounting professionals, LexisNexis in April 2006 launched its LexisNexis Tax Center, an online research tool that offers users access to cases, codes, regulations and analytical materials from such sources as CCH, BNA, Tax Analysts and Matthew Bender.

Charlie Ter Bush, tax and accounting vice president and managing director at LexisNexis, says the increased scrutiny facing the industry-not only from the IRS but also from the Securities and Exchange Commission as a result of Sarbanes-Oxley-makes it even more critical that tax professionals be as accurate as possible.

In July, LexisNexis beefed up the Tax Center by introducing the exclusive LexisNexis Shepard's for Tax Professionals, LexisNexis Company Dossier and Industry Dossier reports.

Using Shepard's Citations Services, the Shepard's Signal indicators gives users a quick visual reading of the Revenue rulings, Private Letter Rulings, Revenue Procedures and case laws. Indicators include green for law that is current, red for points of law that have been overturned and yellow where questions about a case exist.

The LexisNexis Company Dossier reports offer customizable information, including financials, executives and operations, obtained from thousands of news sources, financial resources and case law. It also can compare up to five companies side-by-side, or generate a list of prospects based on financial and location criteria selected by the user.

Meanwhile, the LexisNexis Industry Dossier helps users identify top industry performers and the latest economic and sales reports, recent mergers and pending legislation that could impact the industry. The reports also offer insights into business transactions that could have potential tax implications, which can be useful when trying to expand business with an existing client or prospecting for new clients.

Joseph Sardella, U.S. tax practice leader for Toronto-based CPA firm Sidler & Co., uses LexisNexis every day given the daily disclosures, and three to four times a week for conducting more in-depth research.

"There's a lot of sources [on LexisNexis] and, as an accountant, it gets to the heart of some of the issues that come up in tax," says Sardella, who serves about 75 clients.

Ryan Farley, group product manager for Intuit's Professional Tax, agrees that firms today are increasingly looking for ways to enhance productivity. Looking to meet those needs, the company has developed several solutions.

He notes that there tends to be three different groups within research:

The "traditionalists": Those who have been with larger firms and conducted research based on using the books, and today have gone to online solutions.

A second group is those who will look all around to find an answer on an issue, whether it is or their software.

The third group is what he calls Power of the People, or the peer-to-peer group, who enjoy dialoging and talking with other accountants. They are likely to post questions on research topics online and seek feedback from their peers.

Looking to cater to those professionals who enjoy interacting in an online community of sorts, Intuit launched in late 2005 the site, a free tax research resource.

To better serve those who would fall into a more traditionalist group-which continues to be the mainstream-Intuit's Lacerte brand launched around late summer its Lacerte Tax Research and Lacerte Forms Library.

The Tax Research Library integrates with the tax program to make finding information about specific topics easier. The goal: to help accountants be more productive and to help ensure the accuracy of their work.

A key benefit of the Lacerte Forms Library is that it enables users to easily find forms that their accounting and/or tax software does not support or provide. In addition, accountants can type information into the forms, enabling them to present a professional image by avoiding manually filling in forms.

In August, CCH, whose portfolio includes Tax Research Network, which combines CCH federal, state and international tax information with research functionality, completed its acquisition of UCG's ATX/Kleinrock. The acquisition enables CCH to enhance its focus on smaller firms. With annual revenues of about $40 million, ATX/Kleinrock had about 48,000 tax professionals and CPAs users.

With the acquisition complete, Cathy Wolfe, vice president of tax and accounting publishing for CCH, says the company has replaced two Kleinrock print books with similar CCH titles, but she adds that no other changes are planned at this time. However, she notes that CCH continues to talk with the Kleinrock customers to look for new opportunities to serve them.

Kleinrock's Total Tax Guide was replaced with the CCH US Master Tax Guide. Kleinrock's 1040 Quick Answers was replaced with CCH 1040 Express Answers. However, the Kleinrock Business Quick Answers and State Quick Answers titles have been retained.

For tax research, CCH rolled out in March new audit tools. We've created new methodology based on new issues around audits, says Wolfe. We have created some interactive tools to help [professionals stay on top of the new rules].

Don Mess, owner of Donald R. Mess & Accountancy in Woodland Hills, Calif., has been using CCH's Tax Research Network for about six years and sees the need for accurate research to be greater than ever.

"The law and the court cases are changing things all the time and there are so many gray areas. It is essential to have good research sources to verify what you are relying on is accurate," says Mess, who serves about 200 clients.

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