Academic journal article Journal of Accountancy

Getting Started in Electronic Tax Research

Academic journal article Journal of Accountancy

Getting Started in Electronic Tax Research

Article excerpt

How to make the search faster and easier.

Technology is making tax research less taxing. Although many CPAs still work with paper subscription tax services thumbing through hundreds of bound pages increasingly accountants are harnessing their computers to get answers to tax questions. Those who have turned to computers find they can do the work faster, cheaper and easier. And even more important, the research often is far more thorough.

Only a few years ago, the only option for accountants in all but the largest CPA firms was the paper path. Using high-tech tools for tax research was out of the question for many others because few resources were in place and much of the technology was beyond their reach. Today, the technology is not only within easy reach but the resources are abundant as well.

In addition to paper, CPAs today have three options for conducting research: They can access the most current data via CD-ROMs, from commercial online services and on the Internet. As a result, CPAs are turning in droves to the new technologies; their growing popularity is driving down prices of the products and making the resources available to an even wider audience.

The only significant obstacle to these new- high-tech tools is the anxiety often associated with trying new technology. While not limited to accountants, it effectively has kept many CPAs working with paper tax publications. The goal of this article---intended as a primer on how the new tax tools work and the services available--is to help persuade tax practitioners who have not yet ventured into electronic tax research that the new user-friendly technology is worth exploring.


The CD-ROM, which has become the ubiquitous medium for recorded music, is fast gaining the same stature for information--whether it's packaged as an encyclopedia, a dictionary or a tax research tool. Although tax CD-ROMs have been around since the mid-1980s, only in recent years have they made significant inroads among tax practitioners. Their popularity is fueled by several factors: their increasing user-friendliness, convenience and the accessibility of the technology. In fact, today's computers come equipped with CD-ROM drives, and installing such a drive on an old machine costs less than $150.

Adding to their appeal is how they search and manage the information. Each CD contains a search "engine"--a software application that conducts very sophisticated hunts for words and phrases associated with the target topic. Once the target document is found, it can be read by a word processor, copied, edited and pasted (electronically) into any document. A user then can conduct further searches within the document using the word processor's own search capability.

The storage capacity of CD-ROMs also is central to their growing popularity. Each 4.7-inch disk holds about 600 million bytes of data, the equivalent of about 300,000 pages of printed matter. The text of an entire basic tax library-the Internal Revenue Code and Regulations, revenue rulings and procedures, technical advice memoranda, letter rulings, court decisions, committee reports, publishers' commentary, textbooks and treatises--can be stored on as few as five disks. Replacing a paper library with an electronic system reduces the floor space needed to house the tax library, from about 500 square feet to a few inches.

As new vendors enter this market, and competition grows, prices trend downward, making the tools increasingly affordable. Exhibit 1, page 46, shows the costs of selected CD-ROM and print products offered by the major tax research publishers.

As part of an affinity program, members of the American Institute of CPAs are eligible for a 10% discount on new purchases of Research Institute of America (RIA) tax research material. Members also are eligible, until August 31, for a 30% discount on RIA's Federal Tax Handbook and may take advantage of a 5% discount on renewals of material purchased under this affinity program. …

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