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Scott Fleszar, Thomson ReutersWhile the average professional tax preparer is not using a cloud-based system this season, the Internet is still having a major impact on tax preparation. And that is because web-based tools, particularly portals, are pushing much of the rest of the process online.

"We see a dramatic increase in the usage of portals of every type," says Scott Fleszar, VP of strategic marketing, for Thomson Reuters. Fleszar says portals usually get heavy usage during tax season and that is true for tax season 2012 with about 750,000 of all types up. Those are client, staff and employee portals with about 5,000 portals a day are being added. That breaks down into about 438,500 NetClient, 287,000 WebEmployee and 29,000 NetStaff portals.In a week, 40,000 new NetClient and new 10,000 WebEmployee portals have been added.

Robert Dias, VP of product management of for CCH's tax business unit sees the same strong trend. "Our adoption rate for portals is similar to other folks - it's exploding," says Dias. He notes that secure transfer of documents is driving the adoption and that "once you starting using the portal for secure transfer, you can't go back."

Tax preparation software vendors are also seeing strong growth in the use of electronic filing. The TaxWorks' webpage notes that the mandate by the Internal Revenue service for those to efile if they handle 11 or more returns is driving volume. Fleszar says the year-to-year comparisons are also being driven by the fact that there was a delay in efiling last year because of late legislation which is not a factor this year.

Both Fleszar and Dias say that their businesses did not see a strong surge of web-based tax preparation this year. And both find the fact that switching tax software has many ramifications for firms.

"It seems for us that generally firms make decision to switch to a cloud-based offering earlier in the year," says Fleszar. He says most firms do not want to switch their operating environment close to tax season. Dias notes that firms that have not fully depreciated their equipment do not want to move to the cloud quickly, while adopting a new tax software system can also have a significant impact on processes.

On the other hand, moving to cloud-based tools is much simpler and CCH is seeing strong adoption of web-based versions of its scanning software and Workstream workflow application, along with the move to portals. And Dias indicates CCH is studying how to provide more capabilities for mobile and cloud-based systems.

After tax system, CCH expects to provide the ability to track the status of electronically filed returns via mobile devices. It also is looking at different ways to streamline getting source documents from clients to preparers. Methods under consideration include giving users the ability to photograph document via phone to the use of scanners.

However, while there is increased use of the SaaS version of ProSystem fx "I don't think there's a firestorm," Dias says.

Bob Scott
Bob Scott has provided information to the tax and accounting community since 1991, first as technology editor of Accounting Today, and from 1997 through 2009 as editor of its sister publication, Accounting Technology. He is known throughout the industry for his depth of knowledge and for his high journalistic standards.  Scott has made frequent appearances as a speaker, moderator and panelist and events serving tax and accounting professionals. He  has a strong background in computer journalism as an editor with two former trade publications, Computer+Software News and MIS Week and spent several years with weekly and daily newspapers in Morris County New Jersey prior to that.  A graduate of Indiana University with a degree in journalism, Bob is a native of Madison, Ind
Last modified on Sunday, 02 June 2013
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