Tax discussions online.

Newsgroups can be valuable Internet resources for tax professionals. They can provide a forum in which the general public and tax professionals can interact with questions and answers about various topics.

Newsgroups are either moderated or unmoderated. With moderated newsgroups, readers can submit questions or responses to the newsgroup. The moderator reviews them and posts them to the newsgroup (if approved). The advantage of the review process is in the elimination of gratuitous advertisements and "off-topic" posts, as well as the personal attacks frequently found in many newsgroups and chat rooms. The disadvantage is that the process is not in real time. However, multiple daily postings minimize this problem.

Misc.taxes.moderated (MTM) is a moderated newsgroup. It exists for the discussion of taxes, including, but not limited to, proposed and existing tax laws, regulations, procedures and current developments. While most online tax forums and listservs have a few hundred posts each month, MTM often has 100+ posts per day, averaging about 2,000 posts per month (with 3,000 posts per month during tax season). The volume is the result of growing public awareness of the newsgroup and continuing support of tax professionals.

Value to Tax Professionals

Moderated newsgroups provide a timely source of information on emerging tax issues. For example, regular posters to MTM frequently analyze proposed and new tax legislation in detail. There were immediate in-depth discussions of the Taxpayer Relief Act of 1997 and the Internal Revenue Service Restructuring and Reform Act of 1998. Some issues, such as Roth IRAs and the personal residence gain exclusion, were thoroughly discussed. The same is true for revenue rulings and precedent-setting court decisions. Often, these are explained and analyzed on the same day the matters are made public. Second, moderated newsgroups may also serve as timely sources of professional education on tax matters. Practitioners who participate in discussions and questions can more effectively deal with the practical, hands-on application of the law. In recent years, MTM discussion topics have included qualified and nonqualified stock options, innocent spouse relief, qualified plans, estate planning and state taxation of workers in interstate commerce, just to name a few.

One well-discussed "thread" (a series of postings on the same topic) dealt with an airline pilot who lived in Seattle and commuted to work, piloting flights from San Francisco to New York. California wanted him to pay state income taxes on his wages. Eventually, a tax professional who frequents MTM was able to cite the Federal statute that exempted the pilot from California taxation.

Third, newsgroups allow practitioners to get advice from other professionals on real-life situations. Practitioners often find that client problems or questions fail to mimic the tax laws as they are written and frequently can be handled in a variety of ways, ranging from more to less aggressive. By visiting and getting feedback from other professionals on the ways they would handle a particular situation, practitioners can better interpret the tax law and can get different perspectives on how best to handle a problem. In this regard, MTM can be particularly valuable to sole practitioners who lack daily contact with other professionals with whom to discuss ideas. The group has been described as a "virtual hallway," down which one may easily walk to obtain informed opinion from a "virtual colleague."

An ongoing thread deals with the pros and cons of electronic filing. One of the shortcomings of this process was identified when numerous taxpayers posted questions, because each had an e-filing attempt rejected when they had claimed dependents who had already been claimed on earlier e-filed returns. Several practitioners developed a standard answer to this problem, informing these taxpayers that filing first does not determine who is entitled to the dependency exemption. If the taxpayer is entitled to the exemption, the questioner should file a paper return claiming the dependent, with the expectation that the IRS will inquire and, if necessary, audit the returns of both claimants.

One interesting facet of MTM is the presence of tax professionals with niche practices, particularly those with experience in collection cases, offers in compromise, and statute-related issues. Their responses are extremely valuable for professionals who encounter these issues on an infrequent basis.

Reliability of Information

The reliability of the information presented is, far and away, the most critical feature of any newsgroup. The charter of MTM calls for responses to be made directly to the newsgroup, rather than using personal e-mail. This serves two purposes: (1) it promotes the sharing of knowledge and understanding with others and (2) it creates a pro bono peer review of tax opinions. This can be very critical when the original question or any of its responses are ambiguous. Professionals who regularly frequent MTM include current and retired Federal and state revenue agents, tax seminar providers, authors published in refereed tax journals, AICPA Tax Division Committee members and at least one member of the IRS Electronic Tax Advisory Committee. Thus, by the time a question and its responses have been circulated through MTM, the bottom-line answer represents several hours of professional research and comes with a high degree of certainty as to both relevance and reliability.

Accessibility

Another important issue is the accessibility of newsgroups. This is significant, both from the perspective of an individual practitioner being able to access the site and from the number of other practitioners being able to respond to a question or issue. Until recently, MTM has been accessible only through the servers of local Internet service providers. Popular browsers, such as AOL, Netscape Navigator and Internet Explorer, include easy-to-use newsreaders that provide access to MTM. A new alternative is direct access to the MTM website (www.misc-taxes-moderated.com) which is currently under construction and will provide an archive of all postings to MTM since its inception in 1995, as well as links to other tax sites (such as the IRS, state revenue departments and state-sponsored sites).

RICHARD D. ADAMS, CPA, ASSISTANT PROFESSOR OF ACCOUNTING, ROBERT G. MERRICK SCHOOL OF BUSINESS, UNIVERSITY OF BALTIMORE, BALTIMORE, MD, AND WILLIAM P BROWN, PH.D., CPA, ASSOCIATE PROFESSOR OF ACCOUNTING, SCHOOL OF BUSINESS AND ECONOMICS, LONGWOOD COLLEGE, FARMVILLE, VA

Editor's note : Mr. Holub and Professor Adams are members of the AICPA Tax Division's Member Tax Practice Improvement Committee. Professor Adams is the moderator of misc.taxes.moderated

If you would like additional information about this article, contact Mr. Holub at [phone] or steve.holub@ pnccpa.com, Mr. Adams at [phone] or rdadams@ Ubmail.ubalt.edu., or Dr. Brown at [phone] or [e-mail].

Steven F. Holub, CPA Aidman, Piser & Co. Tampa, FL