Recently, I was invited to one of the major cable channels to tape a segment on current trends in tax preparation, as this year’s filing season is, as they say, rounding third.
I won’t identify the station, but here’s a hint: Its founder currently works out of an office at City Hall.
Anyway, I digress. The producer briefed me on a number of subjects that the program’s host would likely touch on, and, following a quick session in the make-up chair — although those who know me might debate the length of time needed to make me presentable — I was ready.
For those readers currently up to their eyeballs in 1040s and with little or no contact with the outside world until after April 15, I’ll tell you that the folks who cover business — but not necessarily accounting — are interested in three primary areas with a “tax” prefix: e-filing, outsourcing and shelters. And there’s certainly enough material on all three to fill several show segments. However, I was allotted roughly five minutes.
For reasons still unclear to me, my own CPA is hesitant to e-file my return. (But then, anyone who can recite every word that appears on a can of a certain brand of beer, while in the same breath quoting hundreds of obscure tax law changes, obviously marches to the beat of a different preparer.)
In contrast, roughly 53 million Americans e-filed last year, with the pace running about 9 percent ahead of last year, although the Internal Revenue Service’s Oversight Committee admitted last year that the service would not reach its previously announced target of having 80 percent of all returns e-filed by 2007. Yet, the process, after encountering a number of stumbling blocks in the beginning, is exhibiting steady, if not spectacular, gains.
Outsourcing, I explained, was not exactly a new trend in tax prep — it has just snowballed in popularity over the past couple of years, with more firms seizing upon the cost and time benefits of shipping returns through cyberspace, primarily to India. And besides, other industries were far ahead of the profession when it came to outsourcing. Aside from security concerns, I’d not heard any major complaints from firms that have outsourced.
Would tax shelters become the next storm on the accounting, and in many cases legal, horizon? My belief is that it’s already here, and it’s now just a matter of how big an umbrella certain firms are going to need. That curious species known as trial lawyers are busy lining up tax shelter clients currently facing IRS audits, while one law firm, which currently drafted some 1,000 “comfort letters” on shelters, just coughed up $75 million to make a host of plaintiffs, well, just go away.
Afterwards, the producer immediately gave me a VHS copy of my segment as a souvenir. As I tend to be my own harshest critic, my only response after reviewing it was to thank God for my recent decision to get a teeth whitening treatment. It didn’t make me more knowledgeable, but I didn’t quite look like a cast extra from The Sopranos.
But, despite my newly minted TV profile, I found out later that day, when I picked up my 2004 return, that my CPA still refuses to e-file.
Sigh. Maybe next year.
Bill Carlino
Editor-in-Chief
