CPA Expects IRS to Play a Role in Income Tax Software

PRESS RELEASE: For immediate release
                            
CPA Firm Expects the IRS to Play a Role in Income Tax Software

(Dallas, TX) Robert W. Scroggins, a Dallas CPA firm, announced that it expects the IRS to partner with income tax preparation software firms to provide free IRS income tax preparation within five years. We expect the IRS to offer a carrot and stick" strategy to convince one or more tax software firms to become partners," says Robert W. Scroggins, principal in the firm.

At a recent conference, the IRS offered a carrot" by proposing to identify organizations that would be willing to offer free income tax preparation and electronic filing over the Internet in exchange for certain consideration—such as access to taxpayer data to target them for financial services. The proposal noted that many taxpayers already have a preference to file directly with the IRS, and it inquired as to what measures would be most effective in safeguarding privacy online. Scroggins notes that many tax software firms, such as Intuit through its Turbo Tax program, would like to use their software as a source for commissions from selling mutual funds, loans, and other financial services. The IRS would like to get a more efficient tax processing system at a low cost. This would make for a perfect partnership, and free income tax preparation would certainly help the IRS image," says Scroggins.

The IRS is already making tax forms available online, which can be filled out using Adobe Acrobat Reader, a freely available software-viewing program. Scroggins notes that it wouldnt take too great an effort to include the mathematical capability that would enable these forms to compete with full-blown tax preparation software". This could be the stick" for making the IRS a direct competitor with tax software companies, unless they enter into a partnership.

There are other reasons making such a partnership more likely. Profit margins for tax software companies are under pressure, with some form 1040 tax preparation software now selling for about $10. The companies also have a labor-intensive requirement to produce yearly software updates. Lower margins have caused some firms to leave the field, and others have been bought out by competitors. Scroggins expects this to continue until there are only one or two big players. There might be some privacy concerns, but we believe that all these factors make such a partnership very likely within five years," Scroggins concludes.
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Robert W. Scroggins, CPA, was founded in 1984 and is located in Dallas, TX.
For further information contact Robert W. Scroggins, CPA
E-mail: rscrogg@atexascpa.com / Web: http://www.atexascpa.com
Tel. 972/354-6480 Ext. 1040 / Fax 360/838-0943