Reader survey results: how CPAs survived the tax season.

The Journal of Accountancy's after-tax-season survey confirmed that more accountants use Lacerte tax preparation software than any other brand. Of the 269 responses to the survey, which appeared in the Journal's May issue (page 48), 25% named Lacerte as their firms' tax preparation program.

The next two most popular programs came in a distant second and third: CCH Computax's ProSystem fx was used by 13% of the firms and ChipSoft's TurboTax ProSeries was the choice of 10%.

The next tier included SCS/Compute's Tax Machine and LMS/Tax with 6.5% each, Arthur Andersen's A-Plus Tax and Pencil Pushers with 5.5% each and Best Programs' CPAid Master 1040 with 4%. TAASforce's 1040 Tax System, Best Programs' Tax Partner, UltraTax and CCH's 1040 Solutions received 3%; CLR/FastTax scored 2%; and Taxbyte's Tax Commissioner, Prentice Hall's Tax Advantage and Digitax each received 1%. A handful of other products were named by one respondent each.

The lack of response to the question of whether respondents were satisfied with their firms' tax preparation software yielded a potentially disturbing insight into the tax software field. Only half the respondents answered the question. Of these, 98 said they were satisfied and 38 said they were dissatisfied. Yet only 18 of the 38 dissatisfied respondents said they planned to switch brands. Do the many dissatisfied users feel trapped by their current software? The cost of changing programs - converting data and training personnel - most likely is simply too high a price to pay for change. While it appears that many firms have simply decided to accept their dissatisfaction, it also may be that some of the dissatisfied firms, rather than switching, are working with their vendors suggesting areas of improvement. When asked what functions they would like to see added or changed in their tax software, respondents cited the following, in order of popularity: incorporate a tax planning module, add more state tax programs, include a database, add the ability to calculate interest and penalties, include a more powerful word processor to handle client letters, add all Internal Revenue Service forms and schedules, provide links to general ledger packages, improve depreciation calculations, add due-date monitoring and client-tracking features, make the programs Windows-compatible, add an electronic filing function, increase the calculation and printing speeds, improve the diagnostics, provide better help screens and incorporate a payroll module.

Dissatisfied users cited these brands most often when asked to which they most likely would switch: Lacerte, ProSystem fx, TurboTax, Tax Machine, UltraTax and 1040 Tax System.

As expected, most of the software was used interactively. For business tax preparation, 65% of the CPAs reported they worked interactively, 19% said they used batch mode and another 19% said they completed returns manually. For individual tax preparation, 71% of the respondents worked interactively, 23% used batch mode and 3% did not use computers at all.

For CPAs whose tax preparation software lacked a tax planning function, the leading add-on program was BNA Software, with 34 responses. CCH's AccuPlanner was second with 7. An interesting sidelight: Ten CPAs said they performed tax planing without a commercial program. Instead, they did the job manually and then created a computer spreadheet to crunch the numbers.

Only 26% of the respondents said they filed tax returns electronically this year. Of those who did not file electronically, only 12% said they planned to next year. Nearly all who filed electronically reported gains in the number of returns handled. While 23% reported gains in the 10% range, 21% said their business doubled. The most widely used software programs for electronic filing, in order of popularity, were Lacerte, Nelco, ProSystem fx and TurboTax.

Nearly half the respondents said they wanted more tax research information at their fingertips - either by adding CD-ROMs to their, computers or by connecting to a resource utility via a modem.

When asked how their businesses fared last tax season, 28% said revenues were up, 7% reported declines and 23% said they were the same as last year. Most of the, gains were in the 5%-10% range. Another interesting statistic: 42% didn't answer the question.

Asked where they would turn for continuing professional education to deal with the new tax law, 60% said their state societies, 43% named the American Institute of CPAs and fewer than 2% mentioned either universities or commercial CPE seminars. The tally exceeds 100% because some of the respondents named more than one source.

Ninety-five percent of respondents were in public accounting, 3% were management accountants and the rest were in education or government.