Windows on taxes.

Windows on Taxes

The AICPA Tax Division Tax Computer Applications Committee presented its version of an automated tax office at the 1993 Fall Tax Division Meeting in New Orleans. Using off-the-shelf systems, the committee designed and presented, in real-time, the simulated activity of a busy tax preparation office.

A typical day's events were staged to show how networked computers can be used to communicate within a firm, eliminate paper copies of documents, forms, etc., yet have the latest version of each document available at all times, as well as facilitate tax research and tax preparation.

Tax office automation

* Attaching documents: An important feature of the intraoffice E-Mail is the ability to attach documents such as a tax return, spreadsheet or research finding to an E-Mail message simply with the click of the mouse. Both a spreadsheet program and worksheets created by staff were opened by a review partner without further loading of application software.

* Reviewing documents: A tax manager responsible for review of a completed tax return was able to discuss the return with her client while updating the data for a late-arriving K-1. When complete, the return was attached to an E-Mail message routed to the review partner, announcing the return as final and ready for review.

* Data base research: To see the effect of a recent development in tax law, a data base search was conducted. Then, using the tax data manager's built-in word processor, a mailing was produced in a matter of minutes to notify those clients affected.

* Tax preparation: It was relatively easy to assign a staff member to research a proposed transaction and plan the client's taxes accordingly: the project was received via E-Mail, the tax research was completed on CD-ROM and a pro forma tax return done with planning software. Both the research and planning were then attached to the E-Mail message, and sent to the assigning partner whose E-Mail reply now included the original assignment, the staff's response and attached documents. The staff's reply was cut and pasted into the client letter reporting on the research, while all supporting work was archived under the client's ID on the network server.

Windows

The demonstration illustrated the ease of use among the varied types of software products when operated under the common interface of Microsoft's Windows for Work Groups, a specialized network version of Windows. Windows is a launching pad for software programs. It provides built-in tools (such as data edit) that application developers can use (rather than having to create from scratch). By using the standard tools of Windows, most programs written for Windows will have a common look and feel.

Windows was designed to use a graphic, as opposed to text-based, interface. Instead of typing archaic commands on a blank screen, the user makes choices by pointing and selecting from available options in a menu format. While entries may be typed in, most Windows programs rely on a pointing device (such as a mouse, track ball or pen). The user selects from icons or small pictures representing the concept on the screen.

Windows also maintains backward compatibility, allowing the use of older DOS/text-based programs. These programs are started from the Windows desktop but run in a special DOS window. (DOS programs generally do not have access to all of the Windows features.) This arrangement allows the user to mix both Windows and DOS programs on a single system. In this configuration, Windows acts as a menu system. When the Windows version of an older program is released, the user can upgrade the program files without reconfiguring the entire system. Often data files will work equally well with both the DOS and Windows versions or the conversion will be transparent to the user.

Windows, however, has significant requirements in terms of computing resources. Microsoft's minimum hardware configuration for Windows 3.1 is an 80286 processor, two megabytes (MB) of random access memory (RAM) and at least 10 MB of disk space for the Windows operating system. Beyond the minimum Microsoft requirements, most Windows programs require two additional MB of RAM and 10 to 20 additional MB of disk space each. (Windows programs generally use more disk space than their DOS counterparts.) Because Windows is a graphical presentation, the user's monitor must have at least one-half to one MB of video RAM to handle the increased data flow. Without additional video RAM, most users will be forced to wait while Windows repaints the screen after each selection.

As a result of many implementations, the Tax Computer Applications Committee recommends an 80486 class microcoputer with four MB of RAM and an 80 MB hard disk as the minimum hardware to support a Windows workstation on a network. A stand-alone workstation will require at least 200 MB of hard disk to contain programs and data.

Even though just about every DOS microcomputer shipped in the last four years has arrived with Windows already installed, tax preparation vendors have been slow to rewrite their software to use the graphical interface. Part of this resistance is due to the fiercely proprietary nature of tax software and its data structure. When programming for a Windows environment, most vendors will need to use the standard tools, making their data appear generic, thus allowing customers to switch easily among packages.

Also, customers have been reluctant to upgrade existing computer systems to the new hardware requirements of the Windows operating system, or, in some cases, must use slower machines that will not support Windows as part of a network environment.

1995 outlook

Based on an industry survey in the July 25, 1994 issue of Accounting Today, vendors will be attempting a variety of strategies for the 1995 season. Some vendors will market a full Windows version, some a DOS version with the look and feel of Windows, and still others will include Windows-like features such as full screen review, cut and paste, and graphical file management (drag and drop instead of copy and delete).

Pencil Pushers, CLR/Fast Tax and Arthur Andersen have announced that they will have a full-blown Windows versions for the 1995 season, although Arthur Andersen will be limiting its distribution.

Cold River Software (formerly Digitax) will market a Windows version called Veritax, while retaining Digitax as a DOS program. CCH, which has marketed a Windows version of Prosystem FX for three seasons, estimates that only 10% of its 16,000 users have adopted the Windows environment. Tax Accounting Software (TASC) has not announced Windows plans for the 1995 season. Lacerte announced a Windows product in time for the 1996 season.

Vendors and practitioners alike are faced with the same concerns about Windows. Will it be a better program? Are there future benefits for the investment in hardware and training? And do practitioners really need Windows? Some users are also waiting on the sidelines for the next upgrade to Windows, code named Chicago. Microsoft has hinted (but not confirmed) the exact release date of Chicago to be the first quarter of 1995. If true, the newest release of Windows will reach the market in time for the first Windows tax season of 1996.