Decisions 2024: A Modern Experience

Taxpayers in most of these areas now have until May 1, 2025. Maybe tax season isn’t quite over after all. However, for most of you, the flurry of activity for tax extensions is past. It’s time to turn to the projects needed to prepare for the new year.

Major publishers, public companies, and private equity owners have been active during your busy season. For example, Progress Software acquired ShareFile. AI has been added to traditional products. Those projects you have put off until after the busy season need attention.

It’s Time To Retire The Traditional Tax Organizer

The problem

• The tax organizer hasn’t changed in 30 years (!!)
• 2/3 of tax firms get fewer than 50% of their tax organizers back.
• Half of the firms get 0% to 25% of organizers back.
• Not receiving organizers creates significant problems for the profession (liability, efficiency, client satisfaction)
• Organizer completion rates will continue to get worse (demographic changes, widening gap vs. good consumer software)

The opportunity

• Firms can address the biggest pain point in the individual tax return process -gathering client data.
• Firms that make clients happy stand to gain in many ways: market share, staff/team, client satisfaction, online reviews, etc.
• Clients are ready. If your client has an email address, they can be an online client (remember COVID?)

How do we move forward? Integrate a new generation organizer with a portal. I’m currently tracking 48 portals in the US professional market. What are my recommendations?

• TaxCaddy pioneered the space of a modern organizer. As Dave Wyle and his team developed the approach of a personal portal, several ideas were valuable. For example, signing engagement letters and retrieving necessary documents, including brokerage statements, W2s, 1099s, and 1098s, was a significant step forward. A notable workflow improvement was delivering the final work product for eSignature on the back end and making the final tax return available to the client in a portal. SurePrep integration into Thomson Reuters products and those of competitors is a crucial advantage of SurePrep/TaxCaddy.
• SafeSend has been a popular delivery tool gaining widespread adoption during COVID. It is logical, easy to use, and manages payment vouchers and extensions logically and efficiently. The company’s early attempts at electronic organizers were reasonable, too. SafeSend One is a complete end-to-end experience. They are making progress on their SafeSend Exchange file-sharing feature.
• Corvee implemented organizers as Smart Questionnaires to support their tax planning software and over 1,500 Federal and state tax strategies.
• StanfordTax generates a personalized questionnaire for each client, which includes prior year numbers, detailed document checklists, etc.
• Truss has remarkably simple, AI-powered request lists. AI creates client-specific checklists. Each of your clients gets their own checklist. Truss AI uses data from your Tax Prep software to ask for the specific documents each client needs to provide. Truss has automated reminders, which we prefer to call auto nag. Client follow-up is minimized. Truss also uses AI for smart file renaming. If a client sends you img_812739.jpg, Truss gives you Smith, John W-2 – 2024.
• Liscio perfected organizers at the right price point for firms of every size. The electronic organizers can be simple or comprehensive. Organizers generated by tax software using a simple print (one at a time or as a batch) are parsed for critical client information, and the user experience is guided step by step. Liscio creates bespoke checklists for each client based on items they had in the prior year. The preparer can easily see that the documentation seems correct or can be rejected and requested again. The taxpayer gets a sense of what was provided in prior years or confirms that a document from the past is no longer needed. Personalized touch, easy-to-use request lists, and mobile apps offer a modern experience for your clients.

In addition, remember productivity gains in tax are also AI-powered.

• Black Ore Tax Autopilot: Known for creating a reviewable 1040 from 1040 workpapers without using outsourced labor or preparation effort.
  • Additive.ai: Gathers and understands K1 to extract the information meaningfully.
  • Blue J: Provides verifiable answers to your tax questions.
  • Tax GPT: Cuts down tax research time by 90% and generates replies to client emails and IRS CP2000 notices.
  • Batch Extensions from HubSync: Helps CPA firms prepare extensions in bulk.

Many of the new or updated products solve traditional problems in new ways using AI. We track the top products in every category and discuss them in our weekly podcasts in The Accounting Technology Lab. We have a podcast covering all the products listed above.

So, What Are We To Do?

Consider what you want your client’s experience to be. A modern interaction through an easy-to-use portal is table stakes. We prefer portals that support all your service lines. If you provide tax, audit, and Client Accounting Services (CAS), your portal should support all these areas. Note that while we like Suralink (audit, now has eSignature), SmartVault, or ShareFile very much for what they do, they are not providing tax organizers. What can work for your single portal? Do you have a document management system (DMS) or practice management (PM) system with a portal? Can it do everything you need?

The other item to keep in mind is your team’s productivity. Can a collaborative portal and an automated organizer lighten the workload? As I said in prior columns 2-3 years ago, how can you get the work done without going crazy? What would benefit all employees of the firm? What would benefit all clients of the firm? How can you optimize your processes and provide outstanding client experience? It’s time to retire the traditional tax organizer for a modern client experience.