2013 tax software survey.

• Author: Bonner, Paul

CPA tax return preparers in 2013 contended with a compressed filing season and widespread reports of software performance problems. Software producers, the IRS, and tax preparers alike had to scramble to revamp their systems to reflect the retroactive enactment of many key extended tax provisions and some new ones by the American Taxpayer Relief Act of 2012, PL. 112-240. The IRS was unable to accept any 2012 individual returns until Jan. 30 and not until March 4 for individual and business returns involving a number of items, including some common ones such as education credits, general business credits, and depreciation. In an informal poll during a May 10 AlCPA Tax Section tax season debriefing webinar, 36% of participants called this tax season worse than last year's, and 24% said it was the "worst tax season in history." Sixty-one percent said they filed more extensions this year than last.

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Major Findings

The most marked difference in software survey results this year from previously, however, was reported dissatisfaction with the performance of a new version of ATX's software, which is geared toward small-to-midsize CPA practices (nearly all survey respondents using it were in practices of five or fewer preparers) and that in previous years had rated high in affordability, ease of use, and suitability for a new practice. In 2013, however, the average overall rating by the survey's 555 respondents who primarily used ATX was 2.1 out of 5. (Last year, it was 4.3.) ATX users, less than one-fifth of whom said they planned to use the software again in 2014, reported persistent problems with slow performance and crashes.

CCH Small Firm Services, a subsidiary of Wolters Kluwer that produces ATX software, said the problems stemmed from a new technological platform for the software that had not been sufficiently tested for the tens of thousands of different hardware types and hundreds of system configurations its customers use. Fifteen releases of the new version later, the problems were fixed, but not until near the April 15 filing deadline. The new platform was deployed to support new features such as mobile applications that are becoming more common in the market and that ATX's customers had said they wanted, said Jason Marx, president of CCH Small Firm Services. However, it caused problems in the software's networking, performance, and stability, Marx said.

"ATX did not perform in a way that meets our expectations or that of our customers," he said.

Customer support for ATX was in turn overwhelmed, said Marx, who took over in a leadership role for the company in mid-February. The company brought in more staff to handle support calls, but "frankly, we couldn't answer all of them in the time frame customers were used to," he said. Customers now will find ATX "greatly improved" for use on returns currently on extension and next year, he said.

A compressed filing season caused by late passage of extender legislation was a contributing factor, in that it added complexity in programming changes to the software, but "that doesn't excuse our delivery issues," Marx said.

Other major tax preparation software products experienced some problems as well. Although it did not clearly affect any survey respondents and was mentioned by only one, Lacerte and ProSeries, both of which are Intuit products, reportedly had temporary problems correctly filing Minnesota state income tax returns.

Aside from ATX, the survey's overall rating of major products was the same or nearly the same as in 2012 (see Exhibit 1). For all major products, the overall rating this year averaged 4.1; excluding ATX, it was 4.3, the same as for 2012.

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