by Roger Russell
Syracuse, N.Y. -- The gap between tax preparation software and tax forms services is narrowing, according to executives at forms company STF Services Corp., publisher of SuperForm Service.
STF Services Corp.Syracuse, N.Y.
"The line between tax preparation packages and a forms service is getting fuzzier, largely because of the additional functionality we keep building into SuperForm," said vice president Mike Andrew. "This year, we added the ability to flow more of the static data -- taxpayer names, preparer names, dependent data and demographic information. The data will flow from one form to another within the same year, so that information doesn’t have to be entered more than once for the same client. It also flows from year to year, since most preparers’ client rosters don’t change a lot from year to year."Is STF encroaching on the turf of value-added tax preparation software companies? "Yes, in the sense that we’re getting a lot closer to their type of product than they’re getting to us," said Charlie Ter Bush, a new vice president at STF. "They’re not going to go out and add an additional 5,000 forms anytime soon."
Ter Bush knows the differences between the two industries first hand. He joined STF several months ago from tax compliance products development giant CCH Inc., where he was director of marketing
"We like being a quiet company," Ter Bush said of STF during an interview at company headquarters. "We don’t call attention to ourselves, we just keep our heads down and build a good product that practitioners can purchase at a reasonable price. When they call us, they can actually get a person. It’s one of the nice touches, and it reflects the culture of the company."
"Charlie has a great background in marketing and is a terrific administrator, and knows the business as well as anyone can know it, so he’s a real asset to STF," said Andrew.
STF was born out of the need for state and local forms experienced by its founder, Jeanne Pickering, in the early 1980s. "New York State forms and City of New York forms were difficult to get in timely fashion, so she went to Albany and New York City and gathered up every possible tax form she could find," said Andrew. "She used them for her own practice as an enrolled agent, and other preparers came to rely on her to get the forms."
"Someone suggested at that point a three-volume set of forms, which she decided to advertise. A grand total of 27 subscribers took her up on her offer, and more than half of them are still subscribers," Andrew explained. "Those users soon began to ask for coverage of neighboring states -- and if you’re familiar with New York, you know that includes Florida, as well as the more obvious ones. Before long, it became a nationwide forms service."
STF now has 55 employees, and SuperForm, according to Andrew, has more than 100,000 end users of its more than 8,500 tax forms. STF also provides about the same number of non-tax forms, in areas such as payroll, human resources, labor law, environmental law and safety.
Most subscribers to SuperForm also have a separate tax preparation package, said Ter Bush. "We see ourselves as a complement, not a replacement, to the tax preparation package." However, he noted, there are some practitioners who use SuperForm exclusively.
Ter Bush noted that SuperForm pricing covers unlimited use, rather than billing customers on a pay-per-return basis. "So someone’s not hitting your credit card every time you add a new client," he said.
The perfect companion
The difference between the main tax prep packages and SuperForm is that the tax prep programs have a lot of built-in logic in a comparatively small number of forms, but lack the comprehensiveness of the complete package that SuperForm provides, said Andrew.
While practices that operate with seasonal staffs of housewives, retirees and other part timers need the intuitive question-and-answer logic built into most 1040 packages, preparers who know what forms are needed and how to use them can dispense with the more expensive software packages and simply use a forms service.
STF bills SuperForm as the perfect companion to the preparer’s tax prep package. All of its forms are government approved, and include due-dates, guides and filing info pop-ups for reference. Calculations with override capability are built into all forms, and through its hotline the company will deliver any form back to the 1970s upon request.
The vendor began publishing SuperForm in CD form 10 years ago and over the Internet three years ago.
Although the company merged with the Washington-based Bureau of National Affairs in 2001, "We’re really a separate entity," said Andrew. "BNA has been a customer licensing our software for more than nine years, and other companies license it as well."
STF’s staff averages eight to 10 years in experience, and is year round. "One of the advantages we have is that we don’t use seasonal people to do the work -- we use seasoned people," said Ter Bush. "We’re open all year."
Pickering delegates much of the work to the two vice presidents, Andrew and Ter Bush. "That’s part of the reason people have stayed here so long and that the product has developed so well," said Andrew. "People with strengths and interests in a certain area can apply themselves there, so we kind of get the cream of the crop."
STF has declined an invitation to join a consortium of private software companies that will offer free online tax preparation and electronic filing services to eligible taxpayers over the Internal Revenue Service Web site. The IRS established the consortium as part of its effort to increase the number of e-filers to 80 percent of all filers by 2007.
"We were invited to join the consortium but e-filing is not a revenue stream for us, while it’s definitely a revenue stream for those companies that joined the consortium," said Andrew.
While Andrew and Ter Bush acknowledged the possibility of STF becoming more like a tax preparation software company, they have no inclination to enter the 1040 preparation market directly. "Our product and our philosophy is to be the other half of the tax preparation program and to be as much a part of the tax office -- whether it’s the corporate tax department, the enrolled agent or the [Big Four] firm -- as any piece of informational material or compliance product that they have," said Andrew.
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