Users Rank Tax Software

his year practitioners generally were less happy with their tax-preparation-software products and services than last year. That’s the conclusion of an informal survey that the National Association of Tax Professionals (NATP) took this summer of its members.

More than 1,000 NATP members participated in the survey, reporting their experience with the products they had used to prepare more than 544,000 tax returns for the 2002 filing season. Respondents prepared an average of 510 returns each.

Although NATP members assessed 29 different software packages for the survey, originally only 13 were included in the final report (see exhibit 1 ). Products receiving less than 10 assessments were excluded because their results would not be statistically valid. One vendor, AccountantsWorld, which had been in the survey, has since ceased production of its Tax Relief tax software and is now offering its customers Creative Solutions’ UltraTax software. The ratings are adjusted for the elimination of Tax Relief.

Users ranked tax software products from 5 (very satisfied) to 1 (very dissatisfied). This year’s average satisfaction ratings fell to 3.32 from 4.04 a year earlier (see exhibit 2 ). The product with the highest score—3.92—was Dunphy System’s 1040 Professional Tax Prep. Dunphy scored highest last year, too, but its current score was off 0.58 from last year’s 4.50.

In the survey TaxWorks by Laser Systems registered the largest loss; it fell to 3.00 from 4.24.

DROP IN SUPPORT
Satisfaction with customer support also declined. The average score in this category for the 12 products was 3.29, down from 3.94 the year before. Dunphy scored highest in this category, too, with a rating of 3.92, but even its ranking was off from its 4.35 last year. Hot on Dunphy’s heels were Tax$imple with 3.58 and RCS TaxSlayer with 3.53.

Respondents also gave sharply lower marks to network support this year. The average rating fell to 2.92 from 3.70 last year, with Dunphy once again leading the pack with a high of 3.60; but its score dropped from the 4.75 it received last year. Intuit/Lacerte came in a close second with a score of 3.50, off from 4.17 last year.

The conversion programs of three tax software vendors—Drake Software, ATX and Intuit/ProSeries—were the most actively used by respondents—an indication those products had a surge of new customers who needed to convert data from their old software to their new package. Some 59 respondents reported using Drake’s conversion package, which received a 3.92 satisfaction rating. Thirty-six respondents reported using ATX’s program, rating it 3.33. And 31 practitioners used the ProSeries package, scoring it at 3.19. For those who used conversion packages, the average satisfaction score was 3.05; there was no comparable figure for a year ago.

For the states to which the 12 products provided tax support, see exhibit 3 . And to get additional product details for each of the 12 programs, see exhibit 4 .

ELECTRONIC FILING
In response to Congress’s directive to have 80% of all tax returns electronically filed (e-filed) by 2007, the number of e-filed returns by tax professionals for the 2002 filing season rose to 36.2 million from 32.7 million a year ago.

When asked whether they will offer e-filing for the 2003 tax season, 84.1% reported affirmatively, up from 79.8% this year. The e-filers transmitted 68.4% of their eligible federal and state returns. A separate e-filing fee was charged by 32.9%, and 38.8% said they plan to charge a fee this year.

Those who opted not to provide electronic filing service gave these reasons: It was too time-consuming and too expensive; they were concerned about privacy issues; and their clients did not ask for it.

STANLEY ZAROWIN is a JofA contributing editor. His e-mail address is zarowin@mindspring.com .