[IMGCAP(1)]Metaphorically, we all use "April 15" as a synonym for "the end of tax season," but this year (in case you weren't aware), the deadline for filing is actually April 18 (or 19, if you're in Massachusetts or Maine).
That got us thinking: If something as firmly fixed as the annual tax deadline can shift, however slightly, what else can change? And that (along with several drinks) led us to a radical thought: What if there were no tax season at all?
It's not as hard to image as you think. To start, much of the work of tax season is data transfer - gathering the necessary forms and information from your clients, and getting it into your software for processing. Right now, automation and integration of reporting systems and software are making this all easier for you, and in the not-so-distant future they may take it off your hands entirely, with employers and brokerage houses dumping information directly to your software, while banks, nonprofits, credit card companies and others automatically deliver digital mortgage information, receipts and other documentation for credits and deductions.
That will still leave the important part -- where the tax preparer applies their expertise to make sure the taxpayer files an optimal, accurate, timely return. But even there, automation and ever-smarter software are taking care of more and more of the low-hanging fruit, and are constantly evolving to be better at the expertise part.
Imagine software getting as smart as it can, then imagine major Tax Code reform (it's been a generation since the last big effort, in 1986, so we're due). Simplification and smarter software could make tax season much less of an event - and the greater use made of extensions over the past few years points up a way to get rid of tax season entirely.
The reason the government doesn't care if a return isn't filed until October 15 is because it already has the money: Payroll deductions and quarterly estimated payments ensure that the feds have regular cash flow, so they can wait for the formality of the filed return. With that in mind, imagine if everyone had their own filing date - based, say, on their birth month. Instead of everyone in the country rushing to file on one or two dates, they could all be spaced out to 12, or six, or even just four. At that point, "tax season" would disappear, and tax preparation would just become part of your regular monthly workload.
What would that mean for your practice, and for the profession? You could deliver tax planning advice throughout the year, with plenty of time for your clients to implement it. You wouldn't have to put all your other work and your non-tax clients on hold for two to three months of the year. Staff wouldn't be driven out of public accounting by the grind of tax season.
Tax season isn't going away, of course -- or at least not for the foreseeable future -- but it's worth thinking about, because the trends that might lead there are already in place, and they're affecting many of the areas accountants work in. Sophisticated reporting systems and real-time access to data will enable continuous auditing and instant financial reporting - gradually eliminating the annual audit and the monthly close. Seasons and periods will matter less and less; "now" will take center stage, so there will be less emphasis on consolidating the past, and more on predicting and planning for the future.
It's worth some thought -- after April 18, of course.