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E-BusinessIf you are an employee or a franchisee of a national tax firm, you will probably enjoy the advantage of state-of-the-art e-business systems and best practices. E-services – such as e-mail, list-serves, chat boards, e-news, and web casts – network people in their individual offices with the global community. If you are an independent tax business owner or employee, you will need to tap into all of these resources to prosper in the new world of e-business. Fortunately, e-business systems and support will be available to you from several sources. Tax Software Developers Some tax software vendors are already providing e-business capabilities. For example, users have been enabled to offer online tax preparation and bank product services on their websites. Many tax preparation software firms are developing Internet-based services to meet the future e-business needs of their independent tax professional customers. If you want to offer visitors to your website the option of self-preparing and e-filing their tax returns through you instead of the powerful national firms, your tax preparation software vendor may soon provide that capability. Or, you can sign up with an online tax software vendor like FileYourTaxes.com that enables tax professionals to offer online tax preparation and fast refund services. If you would like to serve taxpayers living in other cities, states, or countries, your tax software vendor may provide you with systems to do so in the future via the Internet. Such online tax preparation services might be facilitated by interactive online tax organizer forms, downloadable to the tax software you are using in your tax office. In the future, audio and video Internet capabilities may be routinely used to conduct live, face-to-face tax preparation client interviews from anywhere in the world, with the capability to include as many parties as necessary. Your tax software provider may become an Application Software Provider (ASP), which you and your staff will dial into from “dumb terminals.” Web-based ASP service would eliminate the need to buy high-powered PCs, as well as the hassle of installing software and frequent updates. The need for local IT support may also be largely eliminated. Future Internet-based tax software will provide the capability for independent tax practitioners to serve their clients more efficiently and to compete more effectively with the national firms. Tax Industry Vendors Many providers of products and services used by tax professionals will increasingly deliver their wares through the Internet. For example, Versicom Communications, provider of ABCvoice Tax Infoline, the service that allows tax refund bank product clients to call and check on the status of their refund loan and electronic refund checks, is also available online. The ABCvoice Tax Infonet provides “status look-up online,” and e-mails status changes to your clients. Information is available at www.abcvoice.com. Tax software vendors also provide updates and training by e-mail or as downloads from their websites. The Income Tax School from Peoples Income Tax is now available online, both for individuals to learn taxes or to get CPE, and for tax practitioners who want to teach their tax preparers through the Internet instead of in a classroom. You can find information at www.theincometaxschool.com. Tax office supplies and tax reference books may be ordered online from an increasing number of sources, including NATP’s the Tax Store catalog with an online catalog and order form at www.natptax.com. Web-based innovations developed by the national tax firms will be replicated in short-order by enterprising tax industry vendors and made available to independent tax businesses. Vendors will continue to play a key role in providing e-business capabilities for independent tax businesses. Tax Professional and Business Associations Various national and state tax professional associations exist to provide services, support, and representation for thousands of independent tax professionals. Organizations such as the National Association of Tax Professionals (NATP) help to bridge the competitive gap between independent tax professionals and employees of national tax firms. NATP and other tax professional associations help to educate and enable their members to utilize the Internet effectively and keep up with the latest technology. NATP enables its members to ask tax questions by e-mailing the NATP Tax Research Department. Association conventions and conferences also provide a forum for independent tax professionals to learn from one-another and share best practices to compete more effectively with the national firms. The recently organized National Alliance of Tax Business Owners (NATBO, www.natbo.net, 1-800-984-1040) will help its members to refine and transform their tax business models to ensure viability for the future, as the national tax firms are doing. Web-based services will continue to emerge, such as TaxTalkToday, a website (www.taxtalktoday.tv) that presents a series of live web casts for tax professionals on various topics and timely issues of concern to tax industry participants. E-newsletters already proliferate in the tax and accounting industry and will become an increasingly important source of timely news and information for tax professionals. IRS E- Services A key element of the IRS Business Systems Modernization Program is the IRS e-services being made available to tax professionals and taxpayers. The 2004 tax season opened with the debut by IRS of 1040 Central at irs.gov. 1040 Central is a “one-stop-shop” of the IRS website, where both taxpayers and tax practitioners can find the IRS information, resources, and services they need, including an interactive Where’s My Refund online refund status-check service. Taxpayers can also check on the amount of their Advanced Child Tax Credit. And this is just the beginning! IRS Commissioner Mark W. Everson said, “The 1040 Central section reflects our effort to make irs.gov the easiest, fastest, and best option for taxpayers. You don’t have to come to us; we are available to you electronically 24 hours a day, seven days a week.” 54 million taxpayers used IRS e-file last year. This number should reach 60 million this year and will continue to grow annually. In fiscal 2003, the Treasury collected more than $1.5 trillion in electronic tax payments through the Electronic Federal Tax Payment System (EFTPS), a service offered free by the U.S. Department of the Treasury, IRS, and the Financial Management Service (FMS). Taxpayers or their representatives can increasingly conduct more business with the IRS online. An Employer Identification Number (EIN) or a Taxpayer Identification Number (TIN) can be obtained online in just minutes. EFTPS Express Enrollment for New Businesses will automatically pre-enroll new business taxpayers in EFTPS when they apply for an EIN. IRS e-services also provide enhanced customer communications to reduce call-waiting time and abandoned calls and provide bilingual voice-recognition capabilities. IRS is now field testing special e-services Incentives that will be available soon, but only to tax practitioners who have participated as EROs (Electronic Return Originators) and e-filed at least 100 individual tax returns. Initially, the following three e-services incentive products will be made available to qualified EROs: Disclosure Authorization allows the practitioner to file, modify, or revoke a Form 2848, Power of Attorney (POA) that has been obtained in paper form from the taxpayer. Transcript Delivery System allows the practitioner to access IRS records for taxpayers, including the tax return transcript, taxpayer complete account record, verification of filing of a tax return, and W-2 documents filed with the IRS. Electronic Account Information allows the practitioner to communicate electronically with the IRS to deal with the following types of issues:
The IRS will reply to electronic account information requests by e-mail within three days. Before using IRS e-services, tax professionals must register online to create an electronic account through the Tax Professionals Page on irs.gov. You can also give online authorization for IRS e-services Incentives to be made available to “delegated users” within your firm. For complete information, including an online tutorial about e-services, visit irs.gov and enter “e-services” in the search box. Or call the IRS e-Help Desk Line at 866.255.0654. Summary and Conclusions E-business will become a way-of-life for tax professionals. Most independent tax business owners will need expert help to meet this challenge. Fortunately, tax software developers, tax industry vendors, and tax professional associations like NATP will continue to provide education, assistance, and support to independent tax professionals. Independent tax professionals will be challenged to remain competitive with the national tax firms and to keep in step with the rapidly changing tax industry environment. Independent tax business owners need to work cooperatively to meet this challenge. We need to combine our collective intellectual capital to develop best practices and a new tax business model that will be viable for the next decade and beyond. Charles E. McCabe, a 40-year veteran tax industry executive, has managed hundreds of tax preparation offices in the U.S. and Brazil. He earned his B.S. degree in management from Adelphi University and Executive M.B.A. degree from Pace University. He is founder and President of Peoples Income Tax, Inc., which operates multiple tax preparation offices in central-Virginia and licenses income tax school and tax practice management systems to independent tax firms nationwide. Chuck has presented seminars at national tax professional associations, including NATP, and has taught small business management as an adjunct faculty member of Virginia Commonwealth University. He is also the founding chairman of the National Alliance of Tax Business Owners (NATBO). This article is published in the NATP Journal with permission from Peoples Income Tax, Inc., which reserves all rights. For more information, contact the authors at 800.984.1040 or visit www.peoplestax.com. ©2004, Peoples Income Tax, Inc. |
   
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