From tax preparers
to tax prognosticators
1. What are the top challenges
facing tax return preparers this
Economic conditions will continue
to pressure firms to achieve maximum
productivity. Staffing remains a challenge. Even in this
economy finding the right people is difficult. And as firms hire
seasonal help, finding people who can be up and running
as quickly as possible on processes and software is critical.
Client data security is also an important and continuing
challenge. With e-mail being the least secure delivery method
for returns or other sensitive client information, firms are
looking for secure alternatives.
tThe economic crisis and the downfall of the real estate market spurred a slew of tax law changes that will impact the upcoming ;ling season. While some of the new laws could mean more money in the pockets of some ;lers and more taxes for others, for tax advisors it will mean taking on a new profession — fortune-telling.
“The most important thing that we are going
to be faced with in the ;rst quarter of 2010 is dealing
with the increased pressure put on the tax advisory
community to be fortune-tellers,” said David Lifson,
a partner at New York City-based Crowe Horwath.
Lifson noted that for the past 20 years, most of
the changes in the tax system have been neutral or
favorable to taxpayers. Now, however, there is a stated
governmental policy of tax increase, and the question
for the crystal ball is who it will fall on, and how.
“We are going to be called upon to help our
clients support their educated guesses on the who and
how of tax change,” explained Lifson.
Staying abreast of the latest tax law changes is
always an imposing task for accounting professionals,
but one could argue that it will be even more important
this ;ling season.
In order to spur the economy, several initiatives
have been put in place that will impact taxpayers, but
industry sources agree that unearthing some of the
money-saving opportunities will require a bit more
legwork than in prior tax seasons.
relief provided under the Worker, Homeownership,
and Business Assistance Act of 2009 differs in that
the previous relief was limited to small businesses, the
Internal Revenue Service stated.
The current relief applies to any taxpayer with
business losses, except those that received payments
under the Troubled Asset Relief Program. The relief
also applies to a loss from operations of a life insurance
According to the IRS, eligible taxpayers may
elect to carry back NOLs for a period of three-to-;ve
years, or a loss from operations for four or ;ve years,
to offset taxable income in those preceding taxable
years. An NOL or loss from operations carried back
;ve years may offset no more than 50 percent of a
taxpayer’s taxable income in that ;fth preceding year,
a limitation that does not apply to the fourth or third
The procedure applies to taxpayers who incurred
an NOL or a loss from operations for a taxable year
ending after Dec. 31, 2007, and beginning before Jan.
What this means is that tax advisors preparing
taxes for businesses may have to take an even closer
look at the client’s history to determine how best to
take advantage of the expanded NOL carryback.
Karen Fickes, managing editor of the U.S. Income
Tax Group for BNA Tax & Accounting, considers the
expansion of the NOL provision to be signi;cant.
“This provision gives the taxpayer a choice of a
carryback period of three, four or ;ve years, and so the
2. What are you doing to help them prepare?
CCH has delivered more new products and
enhancements than ever to help professionals maximize
opportunities and minimize challenges. To drive greater
productivity, accessibility and ease
of use, we introduced our next
generation ProSystem fx Suite,
including Tax. New features,
including Return Manager,
Correspondence Manager and
integrated preparer notes with the
Dashboard, help firms increase
efficiency. Suite integration
streamlines workflow and its single
common client database reduces
duplicate entry and errors. CCH is
also providing portals for firms as
a highly secure way to exchange
information with clients. Integrated
with Tax, our new ProSystem fx
Portal provides a secure alternative
for firms this tax season.
NEW THIS YEAR
Vice President of
Product and Segment
CCH, a Wolters
One example is the expansion of the net operating
loss carryback option, which impacts businesses. The
ProSystem fx Tax, the tax compliance and preparation
software that’s trusted by leading CPA firms of all sizes,
is engineered to be a seamless part of a firm’s workflow.
ProSystem fx Tax:
• Lets users create customized views of the information
you want to see about your returns.
• Simplifies on-screen reviews, through helpful features
like tickmarks and diagnostic sign-offs.
less data entry,
• Lets users
create print sets, send to multiple destinations, insert objects
and add watermarks.
• Helps users communicate better with clients,
with templates that let you create and edit professional
correspondence in Microsoft® Word.
CCH, a Wolters Kluwer business ( CCHGroup.com) is
a leading provider of tax, accounting and audit information,
software and services.