Another tax software company bites the dust

[Bees Knees]

The new Emergency Economic Stabilization Act of 2008 also lowered that Section 162(m) limit to $500,000 for executives participating in the government bailout.

http://www.thetaxbook.com/view_update.asp?1=116

Once Congress starts down this path, it will only continue. Get ready to see $1 million and $500,000 pay limits for other stuff as well.

[David1980]

I wonder if they plan to eventally axe the X (AT)? It's great software but the management's nuts (i.e., elimination timing of ATX Forum and Maine support staff).

The impression I got reading ATX forums was that it seems like ATX people were treated like second class citizens if they called in for support last season. My guess is ATX will eventually be phased out. It's just cheaper to program and support 1 program than 2 when they basically serve the same purpose. Just like when all the DOS based programs ceased to exist and companies pushed those customers into windows programs.

Another hint at that outcome is that IntelliTax customers are being given TaxWise. They could be given the choice between TaxWise and ATX, or they could have chosen to give them ATX which is closer to IntelliTax than TaxWise. Seems as if CCH doesn't want to expand ATX users if they have a choice.

This kind of thing makes me glad I'm at least a little familiar with several different tax programs. That way if any given one is bought out I can switch to another one I know a little about without being forced to learn a brand new program at the last minute.

[JohnH]

Yes, it's always wise to keep one's powder dry. For my part, I could always go back to Creative Solutions if I want to spend the bucks, but moving back to that type of input system would be just as easy with TaxSlayer Pro or Drake, at a fraction of the cost. I know a great many ATX users who hold the same view as I on this subject. The biggest benefit ATX offers is the intuitive input and range of forms available at the price, but they are closing the price gap even if they keep offering the program in its present form.

I've come to the conclusion that there will probably always be alternatives out there, even if one has to give up a few favorite features in the changeover. I can say that if CCH ever squeezes me out of ATX, I'd be very unlikely to switch to another one of their products. And if consolidation continues to take away choices which are popular with enough people or price them out of the market, there's always the possibility of new entrants into the market who recognize an opportunity to fill a need.

[Snaggletooth]

Private Buyouts

IRC Section 162(m): No deduction is allowed for employee compensation in excess of $1 million for any covered employee of a publicly held corporation. A publicly held corporation is one whose stock is subject to the Securities and Exchange Commission rules.

Just one in a long list of reasons the top brass in companies are resorting to private leveraged buyouts and removing the company from the stock exchange. From my own portfolio, I have lost stock in five such companies which used to be covered by the SEC. They did pay handsomely, but I'm sure the overwhelming part came from borrowed money.

Incidentally, what you're not hearing on TV about the credit crisis: Leveraged private buyouts have consumed enormous amounts of credit. I don't have the statistics, but a typical private buyout consumes hundreds of millions in order to pay off existing shareholders. The news tells you the credit crisis is caused by people who can't pay their mortgages, or greedy lenders who thought sub-prime loans was going to reap huge profits. But we're also told that "sub-prime" loans were less than 2% of all mortgages.

Like Mark Twain said, If you don't read the paper, you are uninformed -- if you do read the paper, you are MISinformed.

[veritas]

Thank Sarbanes-Oxley

With depressed prices for stock it will be happening even faster. Somewhere I heard Exxon Mobil was buying up it's stock at a rate that could take it private in a dozen years or so.

[Snaggletooth]

Pre-emptive Factor

Veritas, whatever happened to the pre-emptive right of common stock as it was taught to us in school?

Guess the small shareholders have had their pre-emptive rights sold out by the various state security commissions and SEC.

[erchess]

I have mulled this a while

It has been my experience that regulation does the opposite for small business growth. How many of your Schedule C filers never expanded because of all the hoops they have to jump through just to hire help?

If you want to help small businesses stay in business, patronize them.

I certainly agree with the idea of patronizing small businesses even though it happens that none of the ones I patronize are my clients and none of the ones that are my clients sell anything I buy. I am sure that will eventually change.

However I wasn't necessarily talking about encouraging the formation of new small businesses. I don't know whether that is a good idea. One reason is that in NC a small enough business does not have to provide workman's comp insurance for the workers and can't be sued for injuries sustained on the job. It has also been my observation that larger firms are more likely to pay benefits to employees and to have unionized work forces, both of which I regard as good. On the other hand, I think there is such a thing as too big and that brings me to the point I originally tried to make.

What I was talking up was regulations designed to keep businesses from growing beyond a certain size in terms of the number of market niches it occupies and the percentage of each it takes. For example, Ford makes cars trucks and suvs so perhaps it should not be allowed to make say trains or ice cream or even car parts for other manufacturers, and perhaps it should be allowed only a certain percent of the car sales in the US. Naturally it may sell all it is able abroad.. Perhaps the sale of Intellitax should be reversed and perhaps the conglomerate companies that now dominate us tax professionals should be required to break up the way MA Bell was broken up. Perhaps Microsoft should be broken up into a company that makes Operating Systems a company that operates an ISP and a company that makes Application Software. Perhaps there should even be an overarching rule that businesses especially their names and customer bases may never be exchanged.

[Chief]

ATX Users

You ATX users READ the handwriting on the wall. You are within a year or two being forced to go with TAXWISE. Get ready for it while there is time for you to make the change; don't wait until you are forced into making the change.
Personally I don't see all that wrong with a menu driven program. My elder son disagrees with me however.
Change is the name of the game.

[joanmcq]

I, as an ATX user, am worried also that the Orrtax users weren't given a choice between Taxwise & ATX, although most of the people I know using Orrtax were getting it for about $300 bucks, so I wonder what the price was going to be next year? You can guess most of them would jump ship to TaxSlayer or another lower priced program than pony up over a grand for Max or more than that for Taxwise.

[Black Bart]

...I wasn't necessarily talking about encouraging the formation of new small businesses. I don't know whether that is a good idea.

Now that's a strange idea to think about -- we shouldn't have the freedom to start a small business in this country which is based on freedom? Without the permission of who?

One reason is that in NC a small enough business does not have to provide W/C insurance for the workers and can't be sued for injuries sustained on the job.

Look; we start business to make money providing good services to willing buyers at attractive prices, not to provide benefits (a desirable secondary effect) or to invite lawsuits. Consumer interest is served because of business' self-interest; if "benefits" cost too much workers are laid off, small businesses close, and we're then frequently ill-served by large corporations or maybe not served at all. People who may be unemployable at large companies are frequently hired by small business on the spot without a five-page job app to fill an immediate need. "Rules are rules" bureaucrats who know what's best for us are a big problem now -- smothering creative new small business operations.

...unionized work forces...which I regard as good...

Exxon's robbing us, but so did Hoffa. Power corrupts, be it completely unbridled corporations or unions.

What I was talking up was regulations designed to keep businesses from growing beyond a certain size...number of market niches it occupies and the percentage of each it takes...perhaps the conglomerate companies that now dominate us tax professionals should be required to break up...Perhaps there should even be an overarching rule that businesses especially their names and customer bases may never be exchanged.

But this cure is worse than the disease -- complete regulation creates uinimaginative and uniform ineffficiency of an incentive-less organization (think FEMA, U. S. Post Office, Amtrack). The Russians tried this system previously.

________________________________
"The Ministry of Plenty's certainly done a good job
this year," Parsons said. "By the way, Smith old boy,
I suppose you haven't got any razor blades you can
let me have?"
"Not one," said Winston. "I've been using the same
blade for six weeks myself."
---- 1984, GEORGE ORWELL

[Black Bart]

TaxWise

...over a grand for Max or more than that for Taxwise.

Taxwise is more than ATX? I used this a few years ago and was thinking it was around $350 at the time. Is it supposed to be better or have more features than ATX now?

I'm using ATX Office Package -- this year's invoice is for $704.00, but it's 1040 only plus all states. Our EF module gives us 100 returns at N/C but over that it's $3 per fed and $2 per state. Does your Max package (if that's what you have) charge extra for over 100 EFs?

[David1980]

I, as an ATX user, am worried also that the Orrtax users weren't given a choice between Taxwise & ATX, although most of the people I know using Orrtax were getting it for about $300 bucks, so I wonder what the price was going to be next year? You can guess most of them would jump ship to TaxSlayer or another lower priced program than pony up over a grand for Max or more than that for Taxwise.

Well IntelliTax sold their software at a pretty high rate actually. They primarily priced it through the EF and bank fees. So someone might have only paid $500 for the software but if they efiled 500 returns maybe another $2500 in transmission fees. This year I think the official price was $995 but again, they had more in transmission fees.

The deal with most service bureaus was done through bank fees. I don't know the numbers, but say TRX was given the software for free and had no EF fees, but was charged $10 for a bank transmission. The $10 becomes totally hidden to the user, they just show the bank fee as $10 more than it actually is and it doesn't get questioned because well, it's a "bank" fee.

So in a nutshell the price IntelliTax charged versus what TRX charges is pretty significant. I wouldn't be surprised at all if TW did or did not continue a gimped version of TW for TRX $300 package.

[erchess]

Black Bart

1. There is a continuum of possible situations running from forbidding something through discouraging it then not encouraging it and finally encouraging it. I do not mean to suggest that we make it a crime to start a business that you are qualified to start. However I would put in place regulations designed to make sure that a business is in a position to make whole anyone it hurts and on the other hand to keep any given business from getting too big. I am not a socialist because I do believe in private ownership of the means of production. However I believe in a heavily but sensibly regulated market. And I will concede that not all regulations in place now really make sense.

2. I personally think that if a worker gets hurt on the job the employer or insurance should do everything money can do to make the worker whole and if that puts the employer out of business so be it. I feel the same way about companies that get sued because their product or service hurts people and I feel that way even if at the time the company caused the harm no one knew that what the firm did created a risk. The bottom line should be that if a profit seeking operation causes a problem for someone else the operation should be forced out of business if it cannot fix the problem and stay in business.

3. If you truly believe that my cure is worse than the disease then I would like to know at what point you would favor regulations to bust up the conglomerates in our industry. The last survey I saw said that 50% of the users of commercial tax prep software use one of three companies and 50% of the rest use company number four. I claim that if nothing is done one day there will be only one company owning all of the software products marketed to tax professionals.

[Burke]

I wonder if they plan to eventally axe the X (AT)? It's great software but the management's nuts (i.e., elimination timing of ATX Forum and Maine support staff)..

You know they did put the forum back up this summer? I have not yet tried to access it.

[Black Bart]

Actually,

You know they did put the forum back up this summer? I have not yet tried to access it.

I never used it. I only heard the complaints from other ATXers about the forum's being cancelled a few days before the deadline. While it highlighted the incompetence of management, it didn't really affect me -- I just call about problems (4-5 times a season).

I've used ATX about four years and never have really received quality support except an occasional (by sheer luck or just persistence) contact with a senior support person. I've heard others here praise their support, so quality apparently varies widely, but I can't recall any hold time under 20-30 minutes (sometimes an hour) and reps ranged from the pitiful (and discontinued) Indian crew to semi-competent geekers. It was just astonishing to me that a poster here said Drake answers in three rings.

Thing is, it's really good software (I think) and it's very reasonable. It was cheaper pre-CCH but not enough to gripe about. My old Lacerte's viritually foolproof Cadillac treatment is absent and with ATX you have to know taxes, search around, and do stuff on your own, but it's got good diagnostics to tip you off if you do omit a credit or whatever.

Anyway I'll just wait and hope for the best -- nothing else to do.