As tax prep suites have evolved to meet the needs of the particular market segment targeted by each product, practitioners now have a variety of products from which to choose - each of which will do the job."The desktop market is becoming extremely competitive, with each producer giving as much new functionality and offering it as cheaply as they can," said John Vora, chief executive of Parsippany, N.J.-based TaxSimple.

"Every software package has reached the level where any software can fulfill the requirements a common tax practitioner has," he said. "Only the 10 percent of practitioners at the top end need to look into the details of what a particular producer provides. The rest would be happy with any software that has the preparation approach - forms-based or worksheet-based - that they want."

In addition to adding forms and functionality, products are offering increased training, marketing opportunities and price stability. At the higher end, more powerful technologies are on the horizon. "I continue to see growth in client portals, [application service provider] access for staff, and the use of technology to make the tax return process more efficient," said Teresa Mackintosh, a CPA and vice president of marketing for Thomson Tax & Accounting Professional Software and Services.


CCH, as promised, has continued to keep its ATX and TaxWise offerings independent as it develops its penetration into the small firm market. "We're operating as a separate entity," explained Gene Goldenberg, vice president of marketing for CCH Small Firm Services. "We believe that our combination with ProSystem fx positions us to be the dominant player in the small firms segment."

Goldenberg defines small firms as companies with seven or fewer employees. "We're providing products and services directly aimed at small firms with their needs and at their price point," he said. "We're holding the line on price for both ATX and TaxWise. In fact, with two exceptions, we actually lowered the price on TaxWise."

Both ATX and TaxWise offer the Scan&Fill feature, which uses optical character recognition technology to capture data and sort W-2 and 1099 forms and export the data into the return program. "It will read 75 percent of those in the market today," said Goldenberg. "That will be updated constantly as customers feed it forms."

Both products offer an integrated solution, including client write-up, client write-up with payroll, fixed asset management, document management and trial balance.

"The target for ATX is small firms that are looking for a fully featured professional product at an affordable price point, while TaxWise is for small firms that are looking to expand," said Goldenberg.

Both ATX and TaxWise also offer expanded training and CPE. "For the first time, ATX now offers seminars and classroom training sessions around the country," said Goldenberg, who added that TaxWise had been doing that for years.


Intuit's ProSeries has dropped the ProSeries Express from its line because it decided that it no longer wants to target the storefront tax professional, according to Kathy Kirkendall, group product manager for ProSeries. "We made a strategic decision that that's not well aligned to where we want to go."

ProSeries Basic is targeted at small firms "new to the world," while ProSeries Professional is for firms that prepare a range of returns, including business returns.

In observing Intuit's clients in the heat of tax season, Kirkendall said that three problems were paramount: the ability to attract new clients, the client experience of walking away feeling that they had not received their money's worth, and getting all the documents that were needed from the client up front.

"We want our customers' clients to be enthusiastic about the service they got," she said. "So we're taking data from the return and turning it into very meaningful client presentations. It will enable the accountant to sit down and have a short discussion with the client. The client walks away thinking, 'Wow, I got my money's worth from my tax professional.'"

Answering the challenge of getting all the documents needed, ProSeries takes information from prior years and turns it into a customized checklist. "The checklists can be batch-printed and e-mailed, and will aid in reducing bottlenecks late in the season," said Kirkendall.


For CCH ProSystem fx product manager Jo Ann Cummings, the focus is always on saving time and adding to the firm's bottom line. "You get that through efficiencies and processing. It can mean going paperless, a better workflow, more integration, or easier e-filing," she said. "CCH is prepared to partner with our clients in achieving economies in processing, and we are building our next generation of software to address these client needs - we're investing in the future of our clients."

For next season, ProSystem fx will have the ability to print K-1 packages in two separate PDF files, according to Cummings. "For large partnerships, they will easily be able to locate the PDF file for a particular partner," she said.

ProSystem fx Scan offers the ability to optically scan W-2s and 1099s and have them flow into the return, said Cummings. "A new express organizer checklist asks clients to check off the source documents they're attaching. It's an alternative to traditional organizers, and it's one our clients have asked for because they think it will increase the number they'll get back."

Also new is the ability to e-file mixed group consolidations, which are consolidations of Forms 1120L and 1120-PC insurance subsidiaries. "We'll also add the ability to e-file amended and superseding returns, which are now mandated to e-file if you e-filed your original return," she said.

ProSystem fx continues to strengthen integration with its entire suite, including ProSystem fx Document, Engagement, Fixed Assets, Practice Management, Site Builder, Trial Balance, and Write-Up.


Comprehensiveness is a key for Lacerte's group product manager, Jorge Olavarrieta. "Our target is full-service firms," he said. "For these you have to have an offering that meets needs from a comprehensiveness standpoint."

"Our strategy as a business is to help full-service firms grow in terms of productivity," he said. "The key pieces of work that take place within an accounting office are managing client files, entering tax data, reviewing returns and filing returns. Where accountants spend most of their time is within data entry."

The solution is Lacerte's Source Doc Auto-Entry, which scans W-2s and 1099s, and imports the data into Lacerte Tax and onto the appropriate line on the return.

Lacerte released its Trial Balance utility in June. "Its purpose is to increase productivity when it comes to preparing the tax return from small business files and data," said Olavarrieta. "Beyond that, we're leveraging tools to import stock transactions into the tax program. There are currently nine financial institutions that participate."

"This year we've significantly expanded e-file, and we continue to add literally hundreds of forms," he added. "We have also improved the automation of calculations, diagnostics and worksheets to help insure that our customers are preparing accurate returns. These are things you have to have, but at the end of the day the focus is on productivity, because that's where we can help customers the most."


Thomson's UltraTax CS has continued to grow its portal technology, according to Jack LaRue, senior vice president of marketing for Thomson Tax & Accounting.

"We expect the number of tax returns delivered to private portals accessed from the accountant's Web site to more than double this year. We also expect very high growth in Web-based client organizers. Last year we hosted more than 40,000 Web-based client organizers and saw a 30 percent completion rate. That's significantly higher than the completion rate of paper-based organizers," he said. "It makes it less costly for the accountant because the data is captured digitally and imported into UltraTax without keying. And it also appears to be more convenient for the client, given the 30 percent completion rate."

Thomson is strengthening its integration between UltraTax CS and RIA's CheckPoint research platform and PPC Deskbooks, according to LaRue. "We're trying to extend smart integration into more research tools, and strengthening the recognition process, so when you access research it recognizes where you are on the return or the input screen and takes you to the proper place."


OCR capabilities in a combination of FileCabinet CS and UltraTax CS. "It will have the ability to identify and bookmark a number of common forms, and on a select number will be able to lift the data and import it directly into the UltraTax CS system," said LaRue.


Drake Software is unique in that it has added free features over the years while its prices have remained the same, according to John Sapp, a CPA and vice president of sales and marketing. "For example, we've just added a document management system as part of the suite. The same goes for client write-up and a seven-year tax planner. We've added to the sack, but charge the same price for the whole bag," he said.

"In a sense, it's a mature market," he added, "but that means that tax preparers are looking for software that works and is delivered on time and they don't want to be nickled and dimed for the extras."

However, it's not a mature market in the sense that more people are entering the profession, according to Sapp. "There's a steady stream of people getting into the business," he said. "The IRS is issuing more [electronic filing identification numbers] every year."


The Orrtax offering for next tax season is arranged in three packages - IntelliTax Essential, Expert and Enterprise, according to product manager Brian Scheffer.

Essential includes individual returns and all states, and a business package on a pay-per-return basis. Expert includes IntelliTax individual and business with all states on an unlimited basis. Enterprise includes everything in Expert and adds the multi-office program IntelliManager.

Many companies are no longer producing information documents, but having the taxpayer go online to get them, observed Scheffer. "In many cases, employees are not given a W-2, but access information and go online to get it. This might compete with scanning as a feature in tax prep software."

Orrtax has added a FilingOptions Worksheet for next season. "Once preparers have completed a return, they can show the client the best option, whether they want paper, e-file or a bank product. That and other performance improvements will simplify the tasks that can consume a preparer's time, so they're more productive."


Because of the recent shakeup in subprime loans, HSBC, the largest provider of refund anticipation loans, is leaving the arena, according to Craig Petz, vice president of marketing of Petz Enterprises Inc.

"They'll no longer play in the subprime loan area, and they consider RALs to be subprime," he said. "They'll still service H&R Block because they have a multi-year agreement, but anyone without a multi-year agreement has to look elsewhere if they want to provide RALs."

Tax prep offices are faced with upward costs for employees and downward pressure on products, Petz noted. "We've added video training to help them crank up more efficiently, especially given late tax law changes," he said.

V-Tax is the online version of the CrossLink product. "It's perfect for the multi-office firm, but it works well for the small office as well," said Petz.

He suggested that those starting out in tax prep use the pay-per-return option. "They might not know exactly how many returns they're going to prepare, so this will save them until they build their business."


TaxWorks, recently acquired by H&R Block, has enhanced its 1041 e-filing, and offers free e-filing for all systems and all states, according to marketing vice president Kelly Peterson, CPA. "We offer significantly lower-priced RALs under TaxWorks' ANEW RAL program," she said. The program reduces fees to 36 percent APR and eliminates other fees commonly associated with refund lending products.


TaxSimple's enhancements include "a very enhanced and complete paperless office, as well as a client management system," said CEO Vora.

"The way to differentiate ourselves from other products is to let the preparer know that we are state of the art," he said. "We know how we are going to take you to the future."


Online upstart Orange Door Inc. released its first version last February. "This will be our first full year," said business development officer Gabriel Lau.

As a marketing tool, the company plans to offer free return filing until the middle of February 2008. "Any professional can file unlimited returns through us until February 15," said Lau. "We'll have a client portal to enter in basic information that flows directly into the return."

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