More rel­e­vant than ever

Tax re­search soft­ware is crit­i­cally im­por­tant in the wake of the TCJA and other leg­isla­tive un­cer­tainty

Accounting Today - - Technology - By Ted Needleman See RE­SEARCH on 30

It’s been an in­ter­est­ing year. Pres­i­dent Trump promised ma­jor re­vi­sions to the Tax Code, and the Supreme Court was de­cid­ing whether or not to over­turn the Quill de­ci­sion in the South Dakota v. Way­fair case. In both cases, events un­folded to pro­duce a lot more ques­tions than an­swers.

And that makes the process of ob­tain­ing an­swers with tax re­search op­tions more im­por­tant this year than it has been in a long time.

With the Tax Cuts and Jobs Act one of the most sig­nif­i­cant changes to tax law in three decades, how are tax re­search ven­dors han­dling the huge job of pro­vid­ing an­swers to prac­ti­tion­ers who are some­what puz­zled by ex­actly how to ap­ply these changes with their clients? In our an­nual sur­vey of tax re­search soft­ware, this was one of the pri­mary ques­tions we posed to our ven­dor panel of four of the pri­mary sup­pli­ers of re­search soft­ware and ma­te­ri­als.

So, what’s new?

Ob­vi­ously of ma­jor in­ter­est is how the ven­dors are ad­dress­ing the new as­pects that the TCJA brings to the ta­ble. And in these re­ac­tions, we no­ticed two ma­jor cour­ses of ac­tion — re­port­ing and anal­y­sis.

“Im­me­di­ately upon en­act­ment, we added vis­i­ble alerts to all code sec­tions and anal­y­sis that was im­pacted by tax re­form,” ex­plained Ge­orge Far­rah, ed­i­to­rial di­rec­tor for Bloomberg Tax. “Within days, we had up­dated the In­ter­nal Rev­enue Code and had added Leg­isla­tive Change Notes to all anal­y­sis im­pacted by tax re­form. We ex­panded our Tax Re­form Roadmap to in­clude linked ref­er­ences to anal­y­sis.”

Re­port­ing was also a key pri­or­ity for Thom­son Reuters and Wolters Kluwer.

Thom­son Reuters’ Adam Gretz, se­nior man­ager of the tax prac­ti­tion­ers seg- ment, said, “The com­plete anal­y­sis of the Tax Cuts and Jobs Act was re­leased to Check­point cus­tomers within 24 hours of the bill’s pas­sage; the In­ter­nal Rev­enue Code was also im­me­di­ately up­dated on Check­point to re­flect TCJA changes. Prior to and af­ter en­act­ment of TCJA, de­vel­op­ments were re­ported and pushed to cus­tomers through daily news up­dates.”

‘For a pro­fes­sional to be able to send key in­for­ma­tion di­rectly to a client — as it is hap­pen­ing — is para­mount.’

And Wolters Kluwer’s Bas Kniphorst, vice pres­i­dent of prod­uct man­age­ment, re­search and learn­ing, added, “Our first pri­or­ity is to re­port and pro­vide guid­ance on the changes as timely and as ac­cu­rately as pos­si­ble. Although the Tax Cuts and Jobs Act is the most sig­nif­i­cant change to the Tax Code in 30 years, our ap­proach has not changed. We con­sis­tently pro­vide commentary and us­able in­sights within hours of leg­is­la­tion sign­ing.”

And for prac­tices with more lim­ited bud­gets and needs, Tax Ma­te­ri­als up­dated its line of re­search prod­ucts as well, ac­cord­ing to Ja­cob Meyer, who is in charge of busi­ness de­vel­op­ment for the re­search provider.

The ven­dor brought out a new Tax Law Pack­age, which in­cludes three books, start­ing with the “TCJA Sum­mer Edi­tion,” which was re­leased on June 15 to ex­plain where ev­ery­thing re­lated to the law was at that point of time.

“We have a ‘TCJA Win­ter Edi­tion’ which will be re­leased Dec. 15 to pro­vide an up­date pre-tax sea­son,” Meyer said, “and our ‘What’s New In-depth Edi­tion,’ which re­leases on Feb. 1, 2019, to cover any late-break­ing tax laws, reg­u­la­tions and ex­ten­ders, along with all the ma­jor changes over the past year. We pro­vide an up­date ser­vice with new ar­ti­cles to keep our cus­tomers in the know on tax up­dates through­out the year that is free and in­cluded with pur­chase, and of course all of our publi­ca­tions will be up­dated for 2018 and the fed­eral edi­tions, which will be re­leased on Dec. 15.”

Re­port, then ex­plain

But re­port­ing is just part of the process of pro­vid­ing an­swers. Just as im­por­tant, or pos­si­bly even more im­por­tant, is the ex­pert anal­y­sis that the ven­dors bring in un­der­stand­ing what these changes mean, and how and where they need to be ap­plied.

Some of this anal­y­sis is pro­vided in up­dated prod­ucts that re­flect changes in code and pro­ce­dures.

For ex­am­ple, Bloomberg Tax ap­proached the process by pri­or­i­tiz­ing anal­y­sis that was sig­nif­i­cantly im­pacted to be up­dated first. “As we amended con­tent, we in­di­cated that the dis­cus­sion had been up­dated, mak­ing it easy for cus­tomers to know if a sec­tion had been im­pacted, and up­dated,” Far­rah said. “Tak­ing a staged ap­proach based on level of im­pact, we were able to com­plete up­dates quickly to meet our cus­tomers’ ex­pec­ta­tions. We felt it was im­per­a­tive to make our up­dates, not only quickly, but with trans­parency to give our cus­tomers con­fi­dence that the in­for­ma­tion they were re­ly­ing upon was ac­cu­rate and com­pre­hen­sive.”

And the ven­dors were quick to point out that the large num­ber and im­pact of changes re­sulted in the in­tro­duc­tion of new prod­ucts to help prac­ti­tion­ers cope with them.

One of the ways that Wolters Kluwer re­acted was by ex­pand­ing their An­swer­Con­nect prod­uct in­tro­duced in 2017.

Ac­cord­ing to Kniphorst, “We have added tools to CCH An­swer­con­nect to as­sist with an­swer­ing ques­tions on items like 199A qual­i­fi­ca­tion, as well as en­hanced ex­ist­ing tools to re­flect leg­is­la­tion and other changes, such as up­dat­ing our nexus in­for­ma­tion to re­flect the im­pli­ca­tions of U.S. Supreme Court de­ci­sions such as the def­i­ni­tion of sales nexus re­sult­ing in

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