Acct/Tax TechTips – Page 9

#TechTips: The Most Overlooked Issue With the IRS’ eServices App

Posted on October 19, 2018March 12, 2024 by Navaal Mahdi

By Jonathan Rivlin, CPA

It’s been said that there’s a pathway to a particular place that is paved with good intentions.

This opening line is a portent of frustrations and difficulties that I know you, my fellow practitioners, have experienced. Whenever I must give a critical review or pass a negative judgement, I always try to temper it with something positive. When dealing with the IRS, that can be challenging — but not impossible!

Unless you’ve spent the past 20 years under a rock in a desert, surviving off the grid as it were, you must be aware that our industry has changed due to technological innovations.

The IRS, that Love to Hate/Hate to Love agency that is both the reason for our profession’s existence and the bane of it, has vacillated from vilifying us preparers as a part of the problem to realizing we are partners that must work together to improve security for the taxpaying public.

To that end, the IRS recently revamped its eServices applications available on the TaxPro section of their website.

The eServices app is a suite of tools offered by the IRS to preparers for the purpose of minimizing the time needed on the phone with an agent, among other things. Personally, I use the eServices app for retrieving transcripts when working tax controversy cases. I also use it to administer the ERO account for our firm.

It’s a great idea. There’s certainly a need, and we can (most of the time) get what we need from it.

However, there have been some glitches to deal with, especially with the release of the newest (and more secure version) of the site and related apps.

All practitioners were required to update their security credentials as of 12/10/17. As part of the new process, tax preparers were required to provide a list of personal and professional info including license numbers, PTIN’s, SSN’s, tax filing status, credit card number or mortgage number, and blood type.
(That last one was not an official item; just trying to keep some levity here.)

You will then be prompted to select a PIN, an image, and a new password. (The idea is that if you don’t see the correct image in a future session, you’re not on the official IRS website and are potentially being “phished” – in which case you should NOT enter your password.)

After selecting your PIN, image, and password, in theory, upon subsequent visits to the eServices site, you can simply enter your updated login, password, PIN, and verify all against the image you selected earlier.

That’s the theory. In practice, at least in my experience, the reality was more time consuming and aggravating.

The system was not able to verify my credit card number, my mortgage number, or any other piece of info from the list of available choices. I know it wasn’t from mistyping because I went very slowly – didn’t want to mess this up. The IRS system was not able to connect my professional identity (via my PTIN) to my personal identity (via my SSN) to my financial identity (via any number of loans and accounts in my name).

However, I was able to get the system to work — sort of. After a quixotic trip into internet purgatory, I realized why I couldn’t get the system to recognize and link the various facets of my digital identity — and it was a shockingly simple issue.

The most overlooked detail in all this? The browser you use to access the internet.

In all its attempts to improve security, the IRS requires tax preparers to use Internet Explorer (IE) with a version no later than 11.0. Once you switch to this browser for the eServices app, you should be able to go through the motions to get your clients’ transcripts.

Now for the maddening part: Even though I was eventually able to get a new login and password credential for eServices, using IE 11.0, the system wouldn’t save my information. That is to say that I would need to go through the little ritual of verifying my complete identity, selecting a new image, PIN, and password EACH time!

Now for the part of about how the IRS shouldn’t be the default punching bag that society expects it to be: The IRS is made up of thousands of employees who for the most part, just want to do their job and actually help the people they deal with. In twenty years of practice, I can count on one hand the number of horrible encounters I’ve had with IRS agents (three), but I’ve had many more pleasant encounters with agents that really did go above and beyond to help me resolve my clients’ issues. The fact is that they are as frustrated with the computers and regulatory complexity as we are.

To resolve my issues getting our firm’s ERO setup, we needed to get passed up to a “Level II” technician. That is to say that the person you’d reach on the 1-800 number wasn’t trained enough to get our account straightened out. The Level II tech was highly competent and courteous. The only problem was that logistically, we had to flex our schedules to her availability. And we needed to block out no less than 2 hours of time for each call.

And that is the rub in all this. While the agents that work on the eServices side really do seem to care and want to help us out, there just aren’t enough of them to accommodate the demand for their time that we have.

If you’ve experienced issues with the IRS eServices app, first make sure you’re using IE 11, which you’ll probably need to download (using your main browser of course). Don’t be surprised if Chrome asks if you’re really sure that you want to download IE 11…

If you’ve tried this browser switch and still have trouble, then reach out to us at the MSATP. Through the Society, we have contacts at the IRS that can help us resolve issues quicker than if you call the main 1-800 number.

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We’d like to hear from you! Please submit your own tech tips to us at techtips@msatp.org! We will award a free subscription to The Tax Book to the person who submits the best tip.

Thanks, and catch you next time!

#TechTips: Doing Well While Doing Good: MVLS and Tax Controversy

Posted on September 20, 2018March 12, 2024 by Navaal Mahdi

By Jonathan Rivlin for MSATP

In a recent edition of our Society’s journal, The Free State Accountant, there was a column that talked about volunteering for the Maryland Volunteer Lawyer’s Service’s (MVLS) Low Income Tax Clinic.

Tech Tips will affirm the benefits of serving the public by taking on pro bono cases into your practice. But the focus of this post, being tech oriented, is on a secure portal app called Canopy Tax.

This is the portal service that we use in our practice. Prior to that, we used SecureDrawer. Before that, we used morse code and carrier pigeons.

CanopyTax — Canopy for short — is an app that is native to the cloud. This feature is critical; this isn’t some antiquated desktop device “reskinned” for a webpage (looking at you QBO!) – this portal’s very design is couched in the cloud.

Canopy was created by CPA’s for CPA’s. It functions as a secure portal, a CRM, a workflow app that syncs with your Outlook for email and calendars, and apropos to today’s post, it has features designed to make tax controversy work more efficiently.

Canopy can link into IRS eServices to download taxpayer transcripts. Think about how efficient this can be! Sensitive docs can be accessed without emailing, stored in the correct client profile without scanning, and the notations can be updated on the fly.

Furthermore, there are templates for common notice replies.

The biggest win for us has been the ability for any staff member to track the status of a particular matter.

Canopy also helps with engagement letters and file storage/organization.

When our clients get new documents, receipts for charitable donations, paystubs they want us to analyze for withholdings, etc – they know by now to automatically upload the document to Canopy.

Canopy sends us an email whenever a client makes an upload. We couch this as a service to our clients and encourage them to use the portal and make it their habit.

Canopy restricts deleting and organizing files to us alone. Under our old portal, clients could make multiple folders, move files around, and delete files — that’s a problem. Canopy puts us in control of the docs.

Canopy is user friendly and intuitive; it’s interface is clean and easy on the eyes. Since we’ve adopted this app, it has become indispensable to us and is the first thing we access after turning our computers on (after turning on the coffee machine of course!)

Between Canopy, SurePrep/TaxCaddy, Xero, Expensify, Bill.com, Gusto, and Futrli, the only reason we still have a server is for Lacerte. Though, the way things are going, we anticipate being able to ditch the server at some point in the next 3 years.

So there you have it, a tour through the Cloud! We’ve covered a lot during this cycle of posts. Future posts will include new apps, as well as deeper dives into these previously covered apps (which are always being updated and improved), as well as other tech related issues facing our industry.

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We’d like to hear from you! Please submit your own tech tips to us at techtips@msatp.org! We will award a free subscription to The Tax Book to the person who submits the best tip.

Thanks, and catch you next time!

#TechTips: Getting Into the Nitty Gritty with Sales Tax Apps

Posted on September 7, 2018March 12, 2024 by Navaal Mahdi

By Jonathan Rivlin for MSATP

This post will focus on the exciting world of sales taxes — we’ll leave their oft-forgotten friend use tax for another post.

NOTE: This post was written before the US Supreme Court’s Wayfair decision; as of now, Quill is still the law of the land. And that land includes some 10,000 taxing jurisdictions!

It’s not that we don’t want to comply, it’s just that with the lack of uniformity in what is taxable, what the rate is, what the frequency of measurement is, whether it’s cash or accrual, what type of registration is required, and how payment is to be made (electronic or paper), AND whatever you think you know today will be obsolete tomorrow, compliance is, in a word, difficult.

When your humble Tech Tips was entering the profession in the 90’s, this was not an issue. Our retail clients didn’t have to worry about nexus with other states. Nexus back then was a hair product. (Yes, I know that product is spelled “Nexxus,” but you get the point.)

So, sales tax: don’t worry, there’s an app for that.

Both QBO and Xero (See prior post on Xero) have sales tax modules built into them, but that’s not enough. These ledger based modules will help you calculate which sales are sales taxable, what rates apply (provided you know what rates to use), and what jurisdictions to remit to, provided that you know this and manually update it yourself.

As limited as this is, it is a mandatory first step.

Now, having gotten that groundwork set out, we can look at some purpose built sales tax apps that can snap into your cloud based ledger.

We’ll look at two: Avalara and TaxJar.

Avalara and Intuit seem to be kindred spirits. Avalara does not publish rates on its website — instead, would-be clients are instructed to contact them for a quote. In this modern age, this is where the decision should stop. This tactic may have worked prior to the Cloud, but in today’s environment it has the veneer of something less than trustworthy.

TaxJar and Xero also seem to be kindred spirits. TaxJar and Xero are native to the Cloud — they were built for the modern way of transacting and computing. Both TaxJar and Xero publish their rates on their website: you know what you’re getting when you pay. You can sign up yourself, on your time, without hassle or the pleasant experience of being upsold.

Both TaxJar and Avalara will calculate your sales tax and assist with filings and registrations. Both sites offer state registration services for varying price levels. Both sites offer a resource library that appears to be available to the public without charge, which is very helpful! There’s a certain commoditization at work here.

Our decision was to use TaxJar, and here’s why:

1) Pricing was transparent (See above and also the previous article on Xero)
2) The “partner agreement” didn’t require us to violate the AICPA’s code of professional ethics. Let’s elaborate on this:

The new way of doing business involves the accounting firm establishing a relationship with a given app provider, be it Xero or Intuit, TaxJar or Avalara, or what have you. These companies offer (often require) some level of training to ensure that each accounting partner knows how to use their system. This is a little patronizing, but it is important.

These apps also have different partner levels (bronze, silver, gold, platinum, etc) based on the number of clients a given firm puts on a specific app. Discounts on per client monthly fees can be had once certain benchmarks are hit. These apps also have agreements that firms need to adhere to.

And then we come to Avalara’s partner agreement.

Avalara’s partner agreement required us to create and submit a marketing plan to Avalara for review, and they would punish us if we failed to meet the benchmarks set out in our plan. Avalara in a sense was inserting themselves into our business and making us responsible for growing their business. No other app does this! When I took issue with this to the sales rep that we contacted, I was told that it wasn’t really enforced and no other accounting firms had ever questioned it; they just sign up, and couldn’t I just sign up already? Why was I bothering her with my questions? (Us CPAs and our questions…)

I realize that not all readers of this column are CPAs, but for those readers that are CPAs, and for any other practitioner that is governed by some regulatory body (attorneys, EA’s, licensed tax preparers, etc), we are governed by a code of professional conduct that requires us to remain in compliance and good stead with any contracts we enter into.

In the 90’s and Aught’s, this meant that we had to be honest about how many user licenses we needed to disclose to Intuit; that we couldn’t use the same copy of Office for all of our work stations. Not that anyone has ever done that — by the way, doing something like this is a felony, and it’s also grounds for being thrown out of the profession.

So, back to Avalara and their partner agreement: If you want to keep your license to practice (and I know that’s a tough call after the new tax law), I would strongly suggest not obligating yourself to an overly invasive, difficult-to-comply-with software license agreement.

I can’t tell you what to do. What I can provide are some alternative perspectives for a given situation, or as Obi Wan Kenobi would say, “…a certain point of view.”

There are surprisingly few absolute right or wrong, yes or no decisions. For us, it comes down to who we want to spend our time with. What do we value as a firm? How would we want to be treated? How do our clients want to be treated? Our firm’s answers to these questions may differ from yours and that’s okay — just be clear about what your answers are and how you arrived at them.

For us, we value transparency, low-pressure sales, well-designed U/X (user interface), passion for their specialty bordering on geekiness, fantastic tech support, and an open attitude where we are treated like partners and not as marks to be milked for add on sales and hidden fees.

That’s why we chose TaxJar over Avalara, Xero over QBO, Gusto over ADP/Paychex, and more apps that we’ll detail in subsequent posts.

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We’d like to hear from you! Please submit your own tech tips to us at techtips@msatp.org! We will award a free subscription to The Tax Book to the person who submits the best tip.

Thanks, and catch you next time!

#TechTips: My Hero, Xero

Posted on August 23, 2018March 12, 2024 by Navaal Mahdi

By Jonathan Rivlin for MSATP

In November of 2016, with the launch of my new practice, we made the decision to support a new accounting platform, Xero. I’ve been a CPA for 20 years and I’ve worked in the industry since I was 16. For me to say that I don’t support or use QuickBooks is not a small thing.

Loosely quoting Brad Pitt’s character from the movie, “Mr. & Mrs. Smith”, “I suppose at the end, you remember the beginning.” Welp; let’s take a look back in the day!

Remember when Intuit launched QuickBooks with that campaign that encouraged clients to “fire their accountants”? And many of them actually did. And then they came back — with IRS and Comptroller’s notices aplenty.

We took (some of) them back, with a charge for cleaning up their self inflicted messes.

Really — whose genius idea was it to come up with “Opening Balance Equity”? I don’t recall seeing that on the CPA exam or in any text book.

I remember getting into QuickBooks desktop with their 1998 version. Coming off paper and DOS based systems, this was a step…sideways. There wasn’t anything intuitive about QuickBooks. All pith aside, by the time the mid aughts came around, I was rocking through QuickBooks desktop and able to button up even a messy year end in short order. I was a happy accountant.

I would recommend QuickBooks to my clients and was shocked – SHOCKED – when they told me how much they hated it.

And life continued until we got to the mid-teens and suddenly the rumors of these new fangled cloud apps became such that I could no longer ignore them. In fact, it cost me a client for trying to keep my head out of the clouds.

I can’t state this strongly enough – if we are going to survive, we have to get into the cloud.

I have yet to meet an accountant that likes QuickBooks Online (a/k/a QBO). So if you’re thinking cloud accounting = QBO, think again!

I was taught that you can’t raise yourself up by putting someone down, and I don’t mean to make this post about all the ways Intuit and QBO have treated us practitioners poorly; but I wanted to make sure that you, my esteemed colleagues, know how and why we decided to become a Xero firm.

Xero is a cloud based general ledger program from an upstart scrappy company based out of New Zealand. One might question how it’s possible for a non-US company to have any relevance to our systems – but think about it; we were (at different points in history) colonies of the UK; we have the same legal framework and language.

Xero presents a clean interface that is refreshing in its ease of use and merciful on your eyes. Don’t dismiss this; whatever system you’re using, you’re going to be staring at a screen, might as well choose the one that doesn’t cause unnecessary fatigue.

Xero truly is intuitive. Most tasks can be figured out on the fly, though there is a wealth of support articles and videos – both company produced and from fellow users around the globe. They even have training courses so one can be come certified in Xero. And unlike Intuit, they don’t charge for the privilege of getting this certification.

Xero’s pricing structure is as clean as it’s interface. There are a few different levels — you pick the one that’s right for you. Everything is clear up front.

As an aside, I’ve had clients tell me that they changed to QBO and were all proud of how they did it themselves. (Groan.) They mentioned that they signed up for the cheapest version. In looking into their books and fixing their inevitable messes, I found that at some point they had up-sold themselves to a higher subscription level. When I took this to them, they were incredulous until I showed them, in their own general ledger, the charges from Intuit that were well in excess of what they thought they were paying. (QBO’s interface is a mine field for the hidden upsell.)

This prompted a trip into call center hell – press 666 to speak to a concerned customer care demon – I mean person. If only we could bill these large corporations for the time spent on hold…

The point of that aside was to illustrate the difference between Intuit and Xero’s business model. Intuit is always looking for the upsell and is aggressive about selling us more and more – whether we need it or not. Xero provides a service, is damn good at it, and is up front about the cost.

Xero’s tech support is amazing! They are fast, friendly, not trying to sell you something, and they work with you to resolve whatever issue you have. Most support tickets are resolved via email – even on weekends!

Xero offers a mobile app where you can take pictures of your receipts and enter transactions on the fly. QBO offers something similar, but with Xero, it’s just easier.

Xero works with many, many apps that enhance different parts of the accounting system. QBO does this too, but with Xero, it’s just easier.

Xero links with your bank and credit card accounts to pull data into the system. The idea of performing a monthly bank reconciliation is a thing of the past. Now we reconcile daily, and it’s easy. There’s no messes to clean up because we catch issues before they get out of hand. It’s true that QBO and QB also work with bank feeds. But with Xero, it’s just easier.

At our practice, we have a “Tech Stack” (how’s that for a new bit of jargon?) that includes Xero as the center. From there we use Gusto for payroll (ADP and Paychex’ treatment of us has been similar to Intuit, but that’s for another column), Bill.com for payables, Hubdoc for document management, and Expensify for managing corporate credit cards and employee expenses. We can also plug custom apps into this cloud based environment to suit each client.

Got a client that is an auto mechanic and needs a way of matching their customer invoices with their parts and supplies bills? There’s an app for that and it plugs into Xero and takes the pain out of bookkeeping.

Now, let’s take the rose colored glasses off.

Very few things in life are purely perfect. Except for bubbles. My 4 year old loses her mind whenever she sees bubbles. Cloud based accounting apps are not bubbles.

There is a learning curve. Yes, Xero is intuitive and easy to learn, but you still have to commit to learning it. For those of us who have been doing things the Intuit way for so long, you will need to accept that there are other (and better) ways about plying our trade.

When learning something new, you – and your staff and your clients – will inevitably hit a wall. Our first instinct in these situations is to blame the software. Don’t. It’s all user error. Meaning, it’s on us. In the beginning, if something “wouldn’t work,” I would rant and rave and my brother (it’s a family practice) would roll his eyes at me.

I had to learn that if, after a minute or two, something didn’t work the way I was expecting, to either search for a help article or submit a ticket – to trust the system as it were. I can’t tell you what a relief that is! How many times have you had issues with QB or QBO and had to go through all sorts of hoops, spending untold hours on hold, (and pay) for tech support? With Xero, I know that whatever issues will arise, I’ve got a team of people that can help me – without trying to sell me something.

We’re almost through our second full year on Xero. I can’t believe I resisted changing for so long; I wish I did it sooner.

Now if Xero could come up with a cloud based tax prep app…

The MSATP is committed to leadership in the cloud technology arena. To that end, we’re working with Xero, Futrli, and other app providers to give our members specialized training and opportunities to learn more about these apps. Check out our upcoming Facebook Live chat with our Xero hero Syed Haque on 9/6/18 @ 09:00.

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We’d like to hear from you! Please submit your own tech tips to us at techtips@msatp.org! We will award a free subscription to The Tax Book to the person who submits the best tip.

Thanks, and catch you next time!

#TechTips: A Walk Through the Cloud

Posted on August 10, 2018March 12, 2024 by Navaal Mahdi

By Jonathan Rivlin for MSATP

I’ve written a cycle of posts that will take you through the entire cloud, at least as it exists today.

Here are a couple of guiding principles to help you understand the cloud better:

The new tax law is both an opportunity and a threat. For those firms with clients that can avail themselves of the new QBID, it’s an opportunity. For those firms with an abundance of Schedule A filers, it’s a tremendous threat.
Whether the new tax law is a threat or an opportunity, or some combination thereof, it’s important to keep innovating and updating our service offerings and practices if we want to stay relevant.
I’m speaking from hard won experience – I had to be dragged kicking and screaming into the cloud. I lost a client because I resisted going into the cloud. I’m actually not that tech savvy. If I can do this, so can you!
You’re not alone! Your society – the Maryland Society of Accounting and Tax Professionals is here to help you! The MSATP has multiple programs – beyond seminars and webinars – that will be rolling out over the next 12-18 months specifically geared to helping its members adapt. That’s why the MSATP is here – to help you!
If you’re facing pricing pressures in a “race to the bottom”, there are a few strategies to consider, and offering cloud based accounting services is a corner stone of these enhanced service offerings.
The days of selecting a software platform (Lacerte, Drake, UltraTax) and “setting it and forgetting it” are over. The apps you adopt today may or may not necessarily be the apps you’re using 5 years from now. This is both good and annoying. Good in that (in theory) we’ll be using apps that deliver value and make our lives easier. Annoying in that we have to always be on the look out for these new apps.
The ideas, opinions, and suggestions expressed in these Tech Tips posts are not necessarily the opinions of the MSATP or it’s Board of Directors – they are mine alone. I offer these posts for educational purposes.
I recommend reading “The Radical CPA” by Jody Padar, CPA and her sequel, “From Success to Significance: The Radical CPA Guide”. While I don’t agree with everything she says, she has done what we’re doing at our firm, and what the rest of us need to start doing.
One of Jody’s recommendations in her books is to dedicate someone in your firm to do the R&D (finding/testing/vetting/implementing) new apps; that change should be our constant. I realize that many MSATP members may not have the resources to appoint someone in their firm to this task. That is why I wrote the cycle of 12 posts to follow.
The posts to follow will detail the apps we use in our firm, how we found them, why we selected them, what their features and costs are, and ways to implement them into your practice.

Expanding on #5 above; ways to manage the downward pressure on pricing brought about by the combination of TurboTax and the new tax law, here are a few ideas:

Focus on U/X (user experience). Yes, a client can do their own return, but what do they really get out of this? When you prepare their return, you’re not selling the return, you’re selling the warm and fuzzy feeling they get when you sign their return.
Your commitment to CPE and professional ethics, your fiduciary responsibility to the client is the most valuable part of what you do – but only if you tell your clients you do this.
We are our client’s personal “Google Search”. clients have questions, being able to answer those questions takes time and costs us money. True, the client can go to Google for free; but we’re not taking their data, we’re not trying to sell them everything under the sun, and we are legally and ethically bound to give them the most accurate information. No free service can do this!
Expand your service offerings to include wealth management services. After 18 years of practice, I sat for the Series 7 exam. The following year I sat for the Series 66 and insurance exams. True, it was intimidating sitting for a professional exam after so much time since the exam to end all exams, but it was worth it. The rigor of studying for these exams helped in my tax practice, and the wealth management services provides a different source of revenue. True, there are regulatory annoyances with FINRA and the SEC, but there are no collections issues. The Broker/Dealer takes care of that for us. If you’re concerned about your age, I would point you towards my own father who’s commitment to education, certification, and technology has been an inspiration and motivation for me. At the big convention in Ocean City, everyone was asked to state how long they’d been in practice. My father was the second most veteran member there; only being beaten by one year. He’s living proof that it can be done, and if we’re to survive, it needs to be done. Think about all the changes he’s seen in the past 46 years. When viewed in that context, the new tax law is just another one of those things to manage.
Consider novel ways of getting clients. For example, you can form alliances with attorneys to provide tax advice for divorce and bankruptcy settlements.
Expanding on novel ways and using the cloud – you are no longer limited to a pool of clients in one geographic location. Your clients can literally be anywhere in the world – all you and they need are decent internet connections (and secure passwords).
Consider remote work for other accounting firms. Firms of all sizes are having trouble retaining talent. There are sites like https://accountingfly.com/ that help accountants with extra time capacity match up with firms who have projects.

For those of us in areas where you can’t just jettison the type of demographic that is price conscious, the only way through this is to adapt. You can try some of the methods above, or create your own. Whatever you do, if you want to stay in this industry, you can’t stand still.

You will always have my compassion and concern. But you have to meet me half way. Reach out to the MSATP and get involved with our programs. We’ll get through this together!

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We’d like to hear from you! Please submit your own tech tips to us at techtips@msatp.org! We will award a free subscription to The Tax Book to the person who submits the best tip.

Thanks, and catch you next time!