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Product & Service Guide

Jan. 2009 Review of Tax Research Systems

Do You Know What You Don’t Know?


From the January 2009 Issue

If the old saying, “Only two things in life are certain: Death and Taxes,” is true, then equally so is the comment that at least one of these is easier to understand, while the other is in a constant state of flux. In the world of tax law, change has become the status quo, with major legislation coming virtually every year. Unfortunately, it is your responsibility as a tax professional to keep up with these myriad changes so that you can most effectively service your clients. Try as you may, you do not, and cannot, know everything.

Add to this the often subjective nature of tax law. While claiming it as an art form may be a stretch, there is often need for analysis by those with an ear to the thoughts of the taxation entities charged with enforcing them. In my opinion, the lack of objective, specific understanding of new legislation is the result of poorly and sometimes intentionally confusing language used by the drafters whose bills are often further muddied in committee processes that can strip out or water down the original intent and meaning. What comes out of these legislative committees is then added to the already befuddling mountain (or is it a vast abyss?) that is the Internal Revenue Code, the Treasury’s Regulations and other primary source materials.

To be certain, one of the byproducts of the confusing U.S. Tax Code is that there is a tax profession. Don’t get me wrong; I’m no supporter of a flat tax. But were our tax laws simple, there would be much less demand for the services of tax and accounting professionals. And while this may be something to be thankful for (after all, tax prep is still the major revenue stream in most small and mid-sized practices), the constant change often becomes a significant challenge to many professionals.

Fortunately, several information sources are available for professionals needing in-depth understanding of tax law. Of course, the vendors who offer these information sources also owe their existence to the complexities of our tax system. But their services are often invaluable, especially to practices with more complex client bases. Only a few years ago, these companies were mostly publishers of print materials, dutifully helping tax and accounting firms fill themselves with libraries of texts.

As these research providers have adopted web-based delivery methods for their materials, many have also added various practice tools, calculators, integration with tax prep programs and other features. Their core value is in two areas: primary source documents and analysis. The first gives users instant access to the code and statutes for various taxing entities across federal, state and even international levels, in addition to court rulings and other government-produced materials. The analysis gets to the crux of what the code and statutes mean in practice, with guidance and opinion from legal and accounting experts.

My father once told me that one of the best measures of intelligence is knowing how to find the answers to what you don’t know. With regard to the appropriate application of tax law, the key to this is having access to the research systems likely to provide you with clarification or guidance for tax treatments for the potential issues your clients are likely to face. You may not know what these issues are, but you can prepare for the unknown. And that’s the point. You don’t need to know everything; you just have to know how to learn it if and when the need arises.

The products in this review of tax research systems were reviewed based on the following characteristics:

  • 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 addresses the training aids and assistance features in the program, including the Help utility and other functions that aid in learning and using the system. The method and frequency of program updates were previously reviewed in this area, but now that all of the systems in this review are offered in web-based models, this factor has been dropped. All are updated by the vendor as conditions warrant.

There are several vendors in the tax research market, and the comprehensiveness of their offerings vary. The determining factor, once again, is understanding the issues your clients are most likely to face. For the smallest practices handling primarily simple 1040s, all that may be needed is access to the primary source materials. But with escalating client complexity comes more intricate and complex treatments that require a higher degree of due diligence on the part of the preparer.

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BNA Tax & Accounting – BNA Tax & Accounting Center
The BNA Tax and Accounting Center is a hub for all of BNA’s online research products, which include a wide range of materials covering federal, state and international taxation of all entity types, along with analysis and guidance on other business issues.
CCH, a Wolters Kluwer business – Tax Research Network
CCH is one of the most widely known providers of tax and accounting research products, as well as compliance and practice management technologies. The company’s web-based Tax Research NetWork (TRN) is the cornerstone of its research offerings.
CCH Small Firm Services – Total Kleinrock Office
Total Kleinrock Office (TKO) provides strong research and guidance functionality for smaller and mid-sized tax-focused practices. The system was initially independent, and then offered as a bundle with the ATX line of compliance software, which was acquired by CCH a couple of years ago.
LexisNexis – Tax Center
LexisNexis is one of the world’s largest electronic content providers to accounting, legal and government professionals, offering more than five billion searchable documents from more than 40,000 legal, news and business sources.

Thomson Reuters – Checkpoint
Checkpoint continues as the standard bearer for high-end tax research, providing an online system that offers extensive primary resource collections, highly respected expert guidance from Thomson Reuter’s RIA, WG&L and PPC brands.

Related Articles:

Thomson Reuters – Small Firm Research Tools
In addition to the Checkpoint tax research platform from Thomson Reuters (reviewed above), the company’s Tax and Accounting arm also offers a variety of tools and utilities geared toward providing research assistance to small and mid-sized practices that might not need the overwhelmingly comprehensive capabilities of Checkpoint.
Free Tax Research Sites Fill Gap
Technology, the Internet in particular, has proven to be a wonderfully torturous phenomenon. On the one side, technology has enabled virtually all of our society to be much more productive, performing much more work in the same amount of time. It’s also given us the ability to instantly access a wealth of content, knowledge and tools larger than humans have ever been able to.

Januart 2009 Review of Client Write-Up Systems — Comparison Chart