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2008 Review of Tax Research Systems

Comprehensive Content Only a Click Away

From the January 2008 Issue

At the dozens of tradeshows, conferences and other meetings that our esteemed
executive editor, Gregory L. LaFollette, CPA.CITP, speaks at each year, he often
shares a PowerPoint slide of the “Conscious Competence” model, which
demonstrates various stages of learning. In short, there are four general stages
of learning that apply to all of us in varying degrees for different subject
matter:

  • Unconscious Incompetence — Where a person doesn’t
    know how to do something, but they also don’t know that they lack this
    knowledge.
  • Conscious Incompetence — An individual does not
    have the knowledge/skill set to do something, but knows that they are lacking
    in this area and may or may not attempt to gain the knowledge.
  • Conscious Competence — This is where a person understands
    a subject/activity but still must focus on the processes involved in order
    to perform the task successfully.
  • Unconscious Competence — This is where an individual
    not only knows and is proficient at a task, but the knowledge is so comprehensive
    and the person has done it so often that it is essentially ingrained into
    the person’s psyche. “Driving a car” is Greg’s example
    … it’s just automatic after a few years. See Greg’s August
    2004 column at www.CPATechAdvisor.com/go/215
    for a more in-depth look at the “Concious Competence” model.

Now, when it comes to tax preparation, there are probably only three and a
half stages, since tax law is constantly in a state of flux. That is, although
a professional might be nearing the height of “unconscious competence”
(basically running on auto-pilot through most simple returns), there is always
the challenge of new deductions, credits, depreciation methods and other issues
with which to deal. When encountering one of these situations, the tax or accounting
professional knows how to process the information and can complete the return,
but he or she must do so more consciously.

Of course, most of your clients and, by far, most individual self-filers out
there fall into the Conscious Incompetence category, which is why the IRS and
tax compliance are such mysterious headaches to them. But as a seasoned tax
professional, you not only have the knowledge and understanding of the subject
matter, you also generally know what you don’t know, but you have resources
at your disposal to find out — tax research resources.

Back in the old days (about five to 10 years ago), large tax firms (or those
with complex clients) would maintain libraries of books and resource materials
on tax information for federal, state and local compliance for all entities.
Shelves filled with tome after tome of cures for insomnia. While the Internet
hasn’t totally rid professional practices of its printed materials, most
tax research has migrated to online sources, or at least programs that frequently
go online to check for updates. Considering the volatility of tax law, this
certainly makes more sense than issuing new publications every month.

But the tax research systems on the market today also offer greatly simplified
and automated search functions along with notation and review capabilities and
analysis of tax law. For practices with fairly simple needs, free online resources
offer the basics, like several IR Code, agency regulations and publications,
revenue rulings, penalties and other government source documents. For further
insight into these areas, several inexpensive systems offer additional resources,
including state taxing authorities, as well as providing forms and contact data
for those jurisdictions.

Firms that serve clients with more complex returns can get research systems
that integrate with the firm’s tax package and automatically update them
to new laws or other issues that may affect specific clients. Many of the tax
research systems also provide customization options for saving routine searches,
tracking news and e-mailing key tax staff. Some also provide tools for integration
with Microsoft Word and search functions that can be easily accessed from within
any program. Options for tax planning and case studies are also available.

Tax compliance can be a complex process, which is why tax professionals continue
to offer a service that is valued by many Americans. Nobody knows everything,
but the value of the tax professional is in being aware of the knowledge he
or she needs, and having the tools to find it.

The products in this review section were reviewed in the following categories:

    • Ease-of-Use/Search Routine looks at navigation features,
      including the accessibility of search tools and functions, and how research
      tasks are generally performed. It also considers how results of searches
      are presented to the user.
    • Content notes the research libraries available within
      a program, including primary federal and state sources, analysis and news
      content.
    • Customization identifies the modification options available
      for users to tailor the program to their needs. This can include the saving
      of search parameters, interface modification, sorting and filtering of search
      results, and other options.
    • Integration/Output looks at how the program interacts
      with other systems, primarily tax compliance programs. Additionally, the
      output capabilities are addressed, including reporting and export tools.
    • Support & Updates address the training aids and assistance
      features in the program, including the Help utility and other functions
      that aid in learning and using the system.

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BNA Tax Management – BNA Tax and
Accounting Center
BNA has completely redesigned its online research
offerings, rebranding the new package as the BNA Tax and Accounting Center.
This new tax and accounting search portal provides a centralized point of
access to all primary source materials; BNA tax and accounting content,
expert analysis and guidance; and additional productivity tools.
CCH, a Wolters Kluwer business – Tax Research NetWork
The Tax Research NetWork (TRN) from CCH is a comprehensive
research and tax information suite that includes federal, state, local
and international primary source materials and guidance, along with current
tax news and analysis.
LexisNexis – Tax Center
The LexisNexis Tax Center is geared to provide tax,
accounting and legal professionals with access to a comprehensive collection
of research materials from a wide range of tax information publishers.

Thomson Tax & Accounting – Checkpoint
The Checkpoint system is one of the most comprehensive
online research programs on the market, providing access to virtually all
of the tomes of tax and legal research materials produced by the Thomson
Corporation’s various entities, including RIA, PPC and WG&L; third-party
content from providers such as BNA, AICPA, GASB, FASB, PCAOB, IBFD; as well
as libraries of source documents from the IRS, SSA, court rulings and international
treaties.
Thomson Tax & Accounting – Quickfinder
Tax Manager
Thomson, which offers high-end comprehensive research
systems like Checkpoint and is a premier developer of tax and financial
analysis, recently announced the release of a new online tax research
system geared toward small and single-person tax and accounting practices.
The Quickfinder name has been around for about 35 years, providing tax
quick reference handbooks and finding aids in print, CD-ROM and online
formats.
Intuit – www.TaxAlmanac.org
Related Article: Over the course of just a little
more than two years, TaxAlmanac.org has greatly reshaped how many tax
and accounting professionals get their tax information, interact with
peers, and provide their own contributions to the professional community.The
free online tax research website was created as a “user content-contributed”
site in 2005 by a cadre of Intuit’s tax and technical staff.