2011 Tax Research Service Survey

CPAs preparing tax returns, providing tax advice, and working in corporate tax departments need a quick, dependable, and up-to-date source of information to answer the myriad questions that can arise in tax practice. As part of their 2011 annual tax software survey, The Tax Adviser and the Journal of Accountancy asked CPAs about what tax research service or other resource they primarily use and their thoughts on these products’ strengths and weaknesses. For the 2011 tax software survey results about tax preparation software, see The Tax Adviser, August 2011, and the Journal of Accountancy, September 2011.

More than 10,000 CPAs answered the survey, which asked about seven tax research providers. Of the more than 7,700 respondents who said they subscribed to a tax research service, over half said they used an RIA (Thomson Reuters) product (51%). Users of CCH (Wolters Kluwer) products accounted for another 33% of respondents, and BNA and Intuit represented 8% and 2%, respectively. Except for Intuit, these services were used consistently across firms of all sizes (see Exhibit 1). Respondents who said their primary tax research service provider was CFS, LexisNexis, or Tax Analysts together represented a little more than 1% of respondents, so those products are not tabulated separately in this analysis.

Overall Satisfaction, Likes, and Dislikes

Practitioners generally said they were well pleased with their tax research service overall, with RIA receiving an average rating of 4 out of 5, followed by BNA (3.9), CCH (3.7), and Intuit (3.4). When asked what they liked best about their tax research service, respondents said they most prized their service’s comprehensiveness and breadth of material (see Exhibit 2). Here, users of CCH were most likely to consider this the service’s top virtue (51%), followed closely by RIA and BNA at 48% and 47%, respectively (see Exhibit 3). A significant number of users of all products liked quality of content best.

Users of Intuit were far less likely to pick comprehensiveness as the chief attraction (15%), but they were much more likely than users of the other services to be drawn by its price. Thirty percent of Intuit users ranked that aspect highest, followed by 9% of CCH users, 7% of BNA users, and 5% of RIA users. Intuit users also were more likely than others to say its integration with other software was its strongest point (17%, versus between 2% and 3% for the other three). When we looked at what tax preparation software respondents to this question used, users of UltraTax CS (a Thomson Reuters product) were the ones most likely (4.7%) to say that integration with other software was what they liked best about their tax research service. Lacerte, an Intuit product, was second at 2.5%, and ProSystem fx (a CCH product) came in at 2%.

Users of Intuit’s research service were somewhat more likely to rank ease of finding answers as its top quality (19%). RIA was a close second in ease of finding answers, with 17% of users saying that was its best feature. Only relatively few users said having a variety of content delivery options and news coverage were what they liked best.

Lack of “ease of finding answers” was the greatest dislike for users of all platforms (see Exhibit 4). Well over half of CCH users named that attribute their least liked, with the other three vendors not far behind. This is somewhat paradoxical, since a significant percentage of users of all four services, including 19% of Intuit users and 17% of RIA users, also named this the attribute they liked best (compare Exhibit 3 and Exhibit 5). This split indicates that ease of finding answers may be the feature of tax research software that users care most about. Correspondingly, readers indicated they neither particularly liked nor disliked news coverage and content delivery options. Price of the service is the next most-disliked feature across the board.

Content Delivery Options

Since having a variety of content delivery options rated low in both likes and dislikes, users appear satisfied with the online access that is their predominant method of using the service. Most users (94%) said they receive their research service online, with only 7% saying they receive it in print and 5% on CD. When asked what format they would prefer to use if they had a choice, online still rated high at 89%, with print increasing to 13% and CD rising slightly to 7%. Thus, having materials in a printed version is important to some preparers.

Government or Free Services

Nearly all practitioners (97%) said they consult the IRS’s website, and a large majority (86%) said they refer to state revenue department websites. Sixty-five percent said they use Google or another internet search engine to perform tax research. We asked about one internet free site, TaxAlmanac, which 13% of respondents said they use, and allowed respondents to name others they use. One getting several mentions was Legalbitstream, which provides free searchable databases of federal tax statutes, regulations, case law, and IRS guidance partly on its own site and partly via links to government sites.

Regardless of how they receive tax research service, respondents indicated that ease of finding answers to their tax questions and breadth of material are most important to them, and news coverage, content delivery options, and integration with other software are secondarily important. As with other products they use, CPAs are mindful of product price, and a significant number supplement their paid tax research service with free online resources.

EditorNotes

Paul Bonner is a senior editor of the Journal of Accountancy. For more information about this article, contact Mr. Bonner at pbonner@aicpa.org or (919) 402-4434.