Tax Research on the Cheap

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Staying abreast of the latest in tax law changes is obviously critical for any tax professional. But for CPA David W. Ristau the need to keep current is especially important as he serves clients in 28 states and, during the tax season, finds himself traveling about two weeks out of a month to serve his clients. When Ristau heard that Tax Materials, publishers of TheTaxBook, was launching an electronic version of the research tool he didn’t think twice about jumping aboard. For Ristau, the new WebCD meant taking off a load—literally.

“For me, it has meant I can travel with my laptop and have the entire book [TheTaxBook] with me and that has been the biggest thing,” says Ristau, owner of Oak Park, Ill.-based The Integer Company/David W. Ristau CPA.

Without an electronic version, Ristau would have to carry print resources covering those states. Ristau says the ability to download updates via the Web is also critical to his business.

Partner Insights

“Each year, the tax laws are changing and Congress has been changing them later in the game,” says Ristau, who completes about 550 tax returns a year.


Staying abreast of changes is no small feat as Congress increasingly passes tax laws very late in the session. One example fresh on the minds of many is the late enactment of the Alternative Minimum Tax “patch.”

In late December, the IRS said it would delay processing of five related tax forms. For many taxpayers, the filing season this year began on time, the IRS stated in mid-February. However, as many as 13.5 million taxpayers who need to file the five affected forms had to wait until Feb. 11 to begin filing those returns.

That made electronic resource tools, such as the electronic version of TheTaxBook even more valuable.

“We had an edition of WebCD prior to this [for the 2006 tax season] but this is our first breakout year,” says Joe Meyer, vice president of marketing and operations for Tax Materials. “This is a standalone [product] and it is updateable.”

New features include navigation from the homepage to answers in TheTaxBook and government documents, line-by-line cross reference links for common IRS forms and schedules, and an enhanced format for updating the WebCD to keep it current with the latest tax law changes.

How it works: Professionals insert the CD and download the application into their computer so they have access to the electronic version of TheTaxBook anytime, anywhere. Users are notified of tax law changes via email and are able to download the updates from the Internet.

Despite positive feedback on WebCD and plans to continue to develop e-products, the company has no plans on shying away from its popular printed product.

The world of tax research has some expensive, high-powered products for high-powered firms. But many firms can use less expensive products, and sometimes, much less high-tech products.

On the Phone

For enrolled agent Owen Oatley, the need to be informed was perhaps never more important than during the 2004 hurricane season.

That year proved to be a very eventful one for Florida as several major hurricanes made landfall, leaving in their wake devastation and widespread power outages. Many residents, including Oatley in Volusia County, were without power for several days. Luckily, Oatley’s telephone still worked, giving him access to the National Association of Tax Professionals and its Tax Knowledge Center.

“I didn’t have electricity in the office for three days but the phone worked so I could call the association for updates,” says Oatley, who notes this was when an extension for an Aug. 15 filing was still in effect. “I could call them and they could tell me what counties were in a disaster area.”

While 2004 was a critical year for Oatley, who runs a tax practice business in Daytona Beach, Fla., it was far from the first time he had reached out to NATP for tax research help. In fact, he has been calling on the association for about the last 20 years and today continues to call the Tax Knowledge Center several times a week.

“If I don’t have a particular court case or ruling in my office they can very often get that information to me and it is very helpful,” says Oatley.

Many other tax and accounting professionals also turn to industry associations to help keep them “in the know.”

The NATP offers members its Tax Knowledge Center, along with the services of a staff of 15 professionals who can answer federal questions. There are also volunteers who can answer state income tax questions.

After an initial free question, members are charged $23 per answer; non-members, $51 per answer with a three-day turnaround for questions.

The association’s more than 18,000 members can also access a searchable database that contains thousands of questions and answers.

“[Professionals] find us valuable because it saves them time. For them, time is money,” says Cindy Hockenberry, an NATP tax information analyst, who notes that it fields about 40,000 questions each year. “A lot of them pass the fee we charge onto their clients.”

The National Association of Enrolled Agents recently launched its Tax Research Service.

“NAEA did a survey of members and that was a top thing they wanted NAEA to provide,” says Karen Yeager, a director of the NAEA board.

The service is comprised of two parts: an online searchable database that answers some 2,400 frequently asked questions and a team of research experts that conducts personalized case research.

The service costs a flat fee of $35 for members and $50 for nonmembers. For more complex research, there’s an hourly rate of $75 for members and $100 for nonmembers. NAEA has about 11,000 members, says Yeager.

Jennifer MacMillan, an enrolled agent and accredited tax advisor, has been using the service since its launch and finds it to be quite helpful. Often times, her question has already been asked and she can find the answer in the database.

“Anything that makes research less time-consuming is a huge benefit,” says MacMillan, the current president of the California Society of Enrolled Agents. “Keeping up with the law and regulations accounts for a good portion of my research activities but the complexity of the tax code requires that I regularly research issues that have been on the books since 1986 or before.”

In a similar move, the National Society of Accountants offers its Tax Help Desk for its roughly 15,000 members. For federal tax questions, there is a research staff who will search its library for an answer. Questions are typically answered within three business days.

As part of their membership, professionals get five free questions. After that, questions cost about $15 each, explained John Ams, executive vice president of NSA.

TaxAnalysts Revamps

Last year, Tax Analysts, a nonprofit tax information publisher, revamped its online Federal Research Library.

The company says now more intuitive online resource offers searches that are easier and faster. In addition, the newly expanded library has a collection of source documents organized in nine distinct categories.

“We designed it so that those even vaguely familiar with tax research can go in and use it,” says Alan Highman, editor-in-chief of reference services.

For improved navigation, the more than 40 databases are always displayed along the left side of the screen, along with the “retrieve” and “search all” search functions. In addition, a “What’s New” feature lists the latest additions to the library, calling special attention to the most significant documents. The online version also gives professionals access to the Internal Revenue Manual, including archived quarterly editions back to 2001.

The online Federal Research Library is largely modeled after the Tax Analysts’ OneDisc Premium DVD federal tax library that was developed in 2004.

The DVD features 3.3GB of full-text source documents, more than 100,000 cases, the Internal Revenue Manual and U.S. Tax Treaties. Some specific examples of the information found on the DVD: new tax legislation, including committee reports and Joint Committee on Taxation explanations, and the Federal Tax Baedeker, which is Tax Analysts’ explanation of key tax rules.

Tina Rajski, platform product manager for CCH, says within the last year she has seen more requests for specialty libraries within its Tax Research NetWork, as tax professionals must deal with more complex customers.

“The big trend is specialty content being demanded by our clients. [So] what we have done is we have taken a lot of the tools and customized them,” says Rajski.

For professionals grappling with the complexities of FASB Interpretation No. 48, CCH has made the FIN 48 Manager available on the Tax Research NetWork.

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