Tax Division survey results on practitioner software uses.

At the Spring 1996 AICPA Tax Division Meeting in Washington, D.C., the Tax Computer Applications Committee surveyed tax practitioners on their use of tax software. Of the approximately 250 participants at the meeting, 88 (about 28%) responded to the survey. Although the attendees were from across the country, no demographic information was collected--in order to keep the survey very short. One of the major factors in the selection of tax preparation software is whether or not the product supports the tax adviser's home state; if a state tax computation is not supported, most practitioners will look elsewhere for their software. As such, these survey results may be biased in favor of software that supports the states closest to Washington (where the meeting was held). Therefore, as with any survey of software, the most this survey can do is to identify a set of potential software products.

Major Findings

[] Finding #1: General reluctance of tax advisers to change software. Respondents were asked if they would use the same software again next year, and overwhelmingly responded that Editor's note: Mr. Prescott chairs the AICPA Tax Division Tax Computer Applications Committee. Dr. Hicks and Mr. Rubenstein are committee members. they would. In fact, 88% reported that they will use the same individual tax preparation software again in the coming year. Interestingly, a smaller percentage (77%) said they would keep the same preparation software for other entities, while 11% (10 respondents) indicated they were uncertain which software they would use for these other entities.

The common reason for not switching is the learning curve needed to be comfortably familiar with a specific package. In fact, one respondent indicated that the major change he would like to see is the addition of more trained staff who could use the software. Another reason for not changing is that the users consider their current software to be the best.

The top five software products used by respondents are ProSystem fx by CCH; Lacerte Tax Software by Lacerte; Go System 2 by Computer Language Resources; TurboTax Pro by Intuit; and A Plus Tax by Arthur Andersen. Again, the reasons why these software products are the most used may be a function of the state returns supported by these firms and the home location of the respondents. See Table 1 on page 633 for complete survey results. It is important to keep in mind that this list is useful to identify the possibilities, not to make a decision for the purchaser.

[TABULAR DATA 1 OMITTED]

[] Finding #2: A large number of users are waiting for a Windows version. Twelve percent indicated they would only change software in order to have a Windows version. Of course, many of the users are already using Windows, so those 12% are presumably current DOS users. One user regretted "the forced move to Windows"; another noted that the Windows version he used was "not keeping up with the changes in technology." The reason is probably the difference in the substantially higher cost of developing a Windows program versus that of a DOS program. Most software developers are working hard to bring out their software in a windows 95 version. For the 1997 filing season, Windows will be the dominant operating system for tax preparation software.

[] Finding #3: Almost half (45%) of the respondents are not using a suite of software for their basic software applications, surprisingly. Of the suites, Microsoft Office Professional is the leader among these respondents (31% use MS Office). The only other mentioned was Lotus Suite. However, in Fall 1996, Corel is highly publicizing its suite, which WordPerfect users may switch to. (Recall that Corel includes Quattro Pro as its spreadsheet.) Also, the respondents as a group are not aware of presentation software, at least not by that name. Most users either did not answer the question or indicated they used none. This was true even for some of those who reported using the MS Office Suite products, which include Power Point presentation software. In 1996, most presentations, to clients or others, should be made using some form of presentation software, such as Power Point, Lotus Free Lance, Corel Presentations, etc.

[] Finding #4: The Internet is a part of the tax practitioner's bag of tools. Fifty-three percent of the respondents reported that they are connected to the Internet. To no one's surprise, Netscape is the leading Internet Browser (after all, Netscape has about 80% of the market worldwide). Software for E-mail is more diverse. There is no leader from this group of respondents. Also, several respondents who use E-mail are not certain of the software they are using an indication of the easy-to-use network systems available. That is, the user does not have to know what he is using to get the job done. No doubt, electronic communication and networks usage in tax practice will expand in a dramatic fashion during the next few years.

[] Finding #5: Few Tax Division members have looked at the AICPA's Accountants Forum on CompuServe. The response was overwhelmingly in the negative (88%). One reason members have not accessed the Forum is the need to be a CompuServe subscriber. (Clearly, anyone reading this article online is part of a select group.)

Software Problems

Table 2 at left indicates the types of problems users had with various products. In looking at these problems, remember that the number one source of all computer errors is the user. Thus, these problems may not be entirely the responsibility of the software, although some certainly are. All things considered, there were few problems with the 1996 filing season.

Table 2 Reported Problems

        Software                Problems

[check] A Plus Tax,             Lack of a specific state return and
by Arthur Andersen              support; respondents wanted a
                                Windows version earlier.

[check] ProSystem fx, by CCH    Many reported no problems; one
                                respondent reported trouble with
                                network use. With the Windows
                                version, the linking program was
                                too slow, it was not clear to whom
                                to complain, and there were data
                                base errors.

[check] GO System 2, by CLR     Many printing problems with
                                Windows version, errors reported
                                during tax season were not fixed
                                on a timely basis, and bugs were
                                found with large partnership returns.

[check] Lacerte                 Most reported no problems; only
                                one respondent noted that
                                multi-state features need refining.

[check] Tax Machine,            Slow delivery time, which was
by SCS/Computer                 appropriately blamed on
                                Congress.

[check] TurboTax Pro            Late delivery, especially Form
                                1040NR.

Conclusion

With the 1997 season approaching, now is the time for tax advisers to finalize their hardware and software systems for tax preparation work.

FROM C. EUGENE PRESCOTT, CPA, GREENVILLE, N.C., AND SAM A. HICKS, CPA, PH.D., VIRGINIA POLYTECHNIC INSTITUTE AND STATE UNIVERSITY, BLACKSBURG, VA. TTA