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Nov 1993

Tax services and tax forms on CD-ROM. (Software Review) (Evaluation)

by Warner, Paul D.

    Abstract- CD-ROM technology has considerably eased the burden of tax preparers by eliminating the vast amount of paper work inherent in traditional tax planning. CCH Access CD-ROM and E-Mail are two software packages that use this technology. CCH Access offers a more convenient and less time-consuming way of conducting tax research. It includes CD-ROMs on Standard Federal Income, Estate and Gift Tax Reporter, Excise Tax Reporter, Federal Tax Guide, Selected IRS Publications, Federal and State Forms and Instructions, US Tax Cases 1913-1992 and Tax Court Cases Jan to Jun 1993. It allows the user to save and retrace the research already done. On the other hand, CLR/Fast-Tax's E-Mail prints out over 15,000 Federal and state tax forms. The remarkable feature of the program is its ability to allow the user to fill out the form on-screen with tax information and to print the resulting product. The form can also be saved and retrieved later.

CD-ROM has expanded areas in which computers can be used. The author reviews two software packages that utilize this technology. One includes an entire tax service used for research and the other generates tax forms that can be filled out on screen.

We are all familiar with the various handbooks and tax guides designed to shortcut tax research problems. They are generally not adequate since in-depth analysis requires having bookshelves filled with law books, texts, court cases, etc. Add to this, specialized research tools such as Shepard's, and you have a mountain of paper to go through before you can adequately resolve a tax problem.


The computer revolution has gone a long way toward reducing the chore of doing tax research properly. With that in mind, I decided to take a look at the CCH Access CD-ROM system. This system provides two major computerized methodologies: the use of--

* in-house CD-ROMs updated monthly

* on-line databases updated daily and weekly.

The only equipment needed beyond the basic computer is a CD-ROM drive and a modem. With these, shelves of books and the need to constantly update loose-leaf services can be eliminated.

System Evaluated

The version of the CCH Access CD-ROM system received for testing contained the following CD-ROMs:

* Standard Federal Income, Estate & Gift Tax, and Excise Tax Reporters containing material from the 19-volume loose leaf reporter, including sections of the IRC dealing with income tax together with related regulations, committee reports, explanations, annotations, current developments (including full-text cases), plus the official text of the current IRC, CCH IRC history, CCH Citator, and Topical Indexes.

* Federal Tax Guide containing material from the eight-volume print reference. CCH's Federal Tax Guide which provides comprehensive explanations to business and personal income tax questions and includes references to the IRS Code, regulations, rulings and court decisions. In addition, the income, estate, gift, and generation-skipping transfer tax and the excise tax provisions of the IRC are provided in full text, along with corresponding final, temporary and proposed regulations. A topical index and new developments section are also included, as well as tax planning tips and tax-saving strategies.

* Selected IRS Publications

* Federal & State Forms and Instructions

* US Tax Cases 1913 -- 1992 (Note: these are archive files and are not replaced monthly.)

* Tax Court Cases January to June 1993

Additional services available from the on-line system are indicated in the accompanying sidebar. These are available on a use cost basis even when they are not subscribed to.

How Did The System Perform?

Test Environment. All testing was performed on a 12 MB Gateway 2000 4DX2-66V computer system using a single SONY CD-ROM drive and a 9600 baud modem.

Set-up Procedures. All software came compressed on one 3 1/2 diskette. The installation was accomplished without major problems and was all menu controlled. The only minor difficulty was my failure to specify whether the installation was for CCH or BNA. The system immediately told me what to do. The setup software included menus for controlling the selection of the CD-ROM drive(s), (the system can use multiple CD-ROM drives simultaneously), on-line communications, and authorization codes required for accessing the online system.

The online communication menu contains standard setups for over 40 different modems which can operate at 1200, 2400, or 9600 baud. Four access networks are provided: AT&T, Telenet, Tymnet, and GENet. The menu also includes two sets of communication parameters: customized and advanced Customization is for the advanced user. It should not be needed. If it is, help for its use is available from CCH on an 800 number.

The last menu was the printer menu. It only had four options: DOS printer, HP Laserjet portrait, HP Laserjet landscape, and Postscript. These were adequate; at least I did not encounter any printing problems on either my Panasonic KX-P 1124 or on my Postscript printer when it was operating in HP mode. The installation required approximately 1.3 MB of free disk space and an additional 1.6 MB was required for the program to operate. Context-sensitive help was available throughout the installation process and is also available during the normal use of the system.

Performing Research. Research can be accomplished in a number of different ways. But they all start the same way, by setting up a project or using an existing one. One of the nice features of the system is its ability to save and allow you to retrace research already performed. Once selected, you are presented with a screen that shows all the publications available on the mounted CD-ROM.

If you have a multiple CD-ROM player attached, the publications on all the CD-ROMs will appear on the screen. Even though I only had a single CD-ROM drive on my system, I was able to swap CD-ROMs without incidence.

As a starter, I used the tried and true tax research method of using the IRC section. Pull-down menus provided alternative approaches. These menus can be accessed at any time by pressing the F10 key.

The system presents detailed listings of the subjects contained in each publication. These allow the user to walk through the relevant materials. Each item on the listing can, in turn, present a series of subtopic listings; each successive listing further narrowing the topic. Each of the subtopics shows the number of items included in that subtopic in parenthesis. Once you select an item, you can narrow the search by using the package's "search" capability by pressing F4. A "search" screen appears and you enter the keyword on which you wish to search, as, for example, unmarried. The higher up the hierarchy the subtopic is, the greater the number of items selected. Multiple subtopics can be searched simultaneously. As an additional aid, every occurrence of the search criteria is highlighted in the extracted material. All items selected can be pasted into a notepad, printed, or saved to a file.

When you already have a specific reference (e.g., a regulation), you can obtain the complete document by using the Link option (F5) which brings up the Link menu into which the reference can be entered or pasted. Court and similar citations can be accessed by using the Citator (F7) menu.

Testing the system. I tested the CCH system by researching how unrelated business income arising from the sale of advertising in an organization's periodicals could affect the entities non-taxable status under IRC Sec. 501(c)(7). By using the search option (F4) and entering "unrelated business income," the system came up with 42 items. I scrolled down the list until I found Regulation 1.512(a)-1. I then used the link option (F5) to access related documents. First I entered 512 on the IRC line which resulted in one item. Entering 1.512 on the regulations line resulted in three items. (The system can only "link" one type of document at a time--a limitation.) Finally, I "linked" to the "IRC Code & History" section and obtained 19 documents ranging from definitions (8), modifications (10), and a special rule for partnerships (1). I then scanned the selected items for applicability.

I then switched to the selected IRS publications CD-ROM and came up with IRS Publication No. 598. The complete document was not on the CD-ROM, but was available through the online system.

So far, the research wasn't meeting my needs. By this time, however, I had only spent ten minutes rather than the hours it would have taken using printed materials. I decided to change my search criteria to "tax exempt" and immediately came up with 250 documents, many of which related to tax-exempt income. I narrowed my search to "tax-exempt organizations" and obtained 44 items, all related to tax-sheltered annuities. When I changed the criteria to "unrelated business income," I again obtained IRC Sec. 512. However, this time I got lucky and following the right path and using the link capability I quickly obtained the regulations, court cases, and other related materials. I was able to reduce the amount of text to review by using the KWIC (CTRL- F5) option. This highlighted each occurrence of "unrelated business income" with only the lines preceding and following it. This enabled me to determine the applicability of the document and if applicable to copy it into the notepad (F2) for future reference or to print it. In addition, I was able to paste phrases from the documents into the search template and to find additional items.

The notepad has word processing capabilities that allowed me to incorporate portions of the documents found into my notes. The notepad function splits the screen horizontally so the original document can be scrolled through and portions pasted into the notepad, as needed. The system saves a notepad for each project until the project is deleted. The system also saves a complete trail of all documents referenced so you can retrace your research.

Extended Research. The CD-ROM Extended option allows on-line access to the CCH Tax Library during a CD-ROM research session. This access is to the most current versions of publications for the CD-ROMs I received. In addition, the CCH Online system provided access to the full array of on- line tax publications including those not subscribed to on CD-ROM. Similar menus and options used when working with CD-ROM were available while I was working with on-line documents. From the CD-ROM research session, I was able to move directly to documents in the Online database, to print or download any documents found, and then return to the CD-ROM research session without any problems.

The system includes an extensive easy to use manual. The CCH Access CD- ROM can also be used in a LAN environment thereby making it accessible to multiple users.

Evaluation of System

I must admit I enjoyed working with the CCH system. It was certainly more convenient and less exasperating than riffling through hardbound books and loose-leaf services. The ability to save and retrace research combined with the availability of a notepad feature further enhanced my desire to use the system.

What Does the System Cost?

CCH's Standard Federal Tax Reporter on CD-ROM which contains principal material from the 19-volume loose leaf reporter, updated monthly, is $1290 per year. If you already subscribe to the loose leaf service the additional cost for the CD-ROM is $380 per year.

CCH's Federal Tax Guide on CD-ROM contains principal material from the eight-volume print reference on one compact disc, includes monthly updates, and is $664 per year.

System Requirements

* IBM or compatible with at least an 80286 processor

* 640 KB of memory

* Hard disk with 2 MB of free space

* 1 CD-ROM player compatible with Microsoft Extensions

* MS-DOS 3.1 or higher

Note: Both RIA and P-H have similar systems. Neither was reviewed.


Have your ever been faced with having to find some obscure tax form or even a copy of a regularly used form? The CCH Access CD-ROM system contains copies of Federal and State tax returns that can be printed out, if required. E-Form from CLR/Fast-Tax goes one step further. It can not only print out the forms, but you can enter a client's tax information into the form that appears on the screen and print out a finished product. The system allows you to save the completed form and retrieve it later. I should point out this is not a tax preparation system, rather it merely allows you to enter the data. It can also provide forms (e.g., Form 1024--Exemption Application for a Non-profit Organization) not available from computer-based tax return preparation systems. It contains over 15,000 pages of Federal and state forms and instructions, and the state forms are from all 50 states and the District of Columbia.

E-Form provides two ways to access Federal forms: by form number (the same applies to state forms) and, for Federal forms only, via a topical index. For example, if you enter "accounting period" (or click on the item in a scrolling index), both request for change Form 1128 and notice of denial Form 8683 are listed. If you click on either selection, the referenced form is displayed.

The Federal form number index lists all the forms in numerical sequence. The state forms are listed within state and are grouped by individual, corporate, partnership, and fiduciary. All form's indices contain complete forms titles.

The package contains on-line help, a tutorial and the 800 number for telephone assistance.

This system is clearly superior to a paper-based one. You never run out of forms and it certainly provides a far more convenient way to enter data into forms that are not available on computer-based tax preparation packages.

E-Form operates under Windows and uses Windows printer drivers. The printed results are excellent. E-Form is also available in a DOS version. I did not test it: Use the Windows version if you can.

System Requirements

* IBM or compatible with at least an 80386 processor

* 4 MB of memory

* Hard disk with 7 MB of free space

* For 1993 less than 1 MB of free space required

* 1 CD-ROM player

* Microsoft Windows 3.1 Price: $965 per year CLR/Fast-Tax 2395 Midway Road Carrollton, TX 75006 800/FORMS21

Services Available on CCH Access CD-ROM On-line System

Federal Taxes Library

* IRS Letter Rulings (including Technical Advice Memoranda)

* General Counsel's Memoranda, Technical Memoranda, and Actions on Decisions

* Proposed legislation, Public Laws, and committee reports

* Revenue rulings and revenue procedures

* Advance release documents

* Internal Revenue Manual

* Current IRC

* Tax transactions library

* U.S. Master Guide

Federal Taxes Archives Libraries

* Standard Federal Tax Reporter (1986-1992)

* IRC (1978-1992)

* IRS publications (1989-1992)

* IRS form instructions (1989-1992)

* 1954 Code

* U.S. Master Tax Guide (1986-1992)

* Tax Day, Federal (1988-1992)

State Taxes Libraries

* Tax-related laws and legislative summaries for all 50 states, plus the District of Columbia and New York City

* Cases and Rulings available for 8 states (IL, NY, TX, CA, MI, NJ, PA, OH) (all 50 states and the District of Columbia by November 1993)

* Tax regulations

* Guidebook to California taxes (1992-1993)

* Guidebook to New York taxes (1992-1993)

* Advance release legislative summaries

* State Tax Day (1990-1992)

News Library

* Daily Federal and state tax news

* Current U. S. Supreme Court opinions, orders, and docket

* Significant 1993 tax legislation

Paul D. Warner, PhD, LLM, CPA, is a professor of accounting at Hofstra University. He is a member of the AICPA and NYSSCPA and editor of The CPA & the Computer column of The CPA Journal. He is a frequent contributor to professional journals.

The CPA Journal is broadly recognized as an outstanding, technical-refereed publication aimed at public practitioners, management, educators, and other accounting professionals. It is edited by CPAs for CPAs. Our goal is to provide CPAs and other accounting professionals with the information and news to enable them to be successful accountants, managers, and executives in today's practice environments.

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