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Discussion:Shared tax software

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Ramcfo (talk|edits) said:

20 May 2013
I share an office with another CPA who suggested we share the cost of the tax software under one firm name thus saving a few thousand dollars in software costs. Not sure from a legal aspect if that would work unless we actually created a separate legal entity. Anyone ever thought of or did this? Not sure if I'm ready to actually merge companies yet, if that's the only option.

Hgco (talk|edits) said:

20 May 2013
Creating a separate legal entity with the other CPA is likely the only way that this scenario would work. Otherwise, I see significant problems with both the software provider and IRS in terms of e-filing returns. Short of combining as one firm for tax prep, one of you would have to be the ERO (Electronic Return Originator) with the other person working as an employee/contractor of the ERO. I would think that returns would have to be signed and e-filed by the ERO using his/her EFIN number and PTIN. I don't see how the non ERO's name could even be on a return that he/she prepared if a separate entity for tax prep was not established. Of course a clear establishment of which clients belonged to which preparer goes without saying.

AgwmTax (talk|edits) said:

21 May 2013
I am not a lawyer so I don't know if there are any other legal ramifications.

If each CPA has their own PTIN then they could possibly use one EFIN for efiling purpose only. You can have multiple PTINs but use the EFIN of the transmitter. Each CPA will have to drawup some agreement on which EFIN to use and compensation for using that EFIN.

Some software companies may also allow you to use 2 separate EFINs.

Hgco (talk|edits) said:

21 May 2013
Which means that one of the two would be identified as the transmitter whose name would appear as preparer/signer on the tax return. Which goes back to necessitating a new entity being formed to avoid that occurrence.

Otherwise, "Joe Preparer" would be the name at the bottom of returns prepared by colleague "Bill Accountant". Bill's clients would likely be wary of the fact that his name doesn't appear as preparer of their tax return. Joe would be assuming responsibility for Bill's work. Further, the business name identified on the PTIN would differ. I would imagine that the software company would likely sniff out what is really going on and say no or charge a hefty additional licensing fee.

Tax Writer (talk|edits) said:

21 May 2013
I know LOTS of preparers that do this, and there are software suites that facilitate this. The EFIN is tied to the location. The PTIN is tied to the preparer. So if you transmit with the EFIN of the location, and the PTIN and signature of the correct preparer, what is the problem? You are sharing a software license at the same location, just make sure the software license allows for additional users. I will also state that I am not a lawyer, but I can't imagine how this would create a legal issue, unless, by chance, the wrong PTIN was transmitted with a return. Then that would be preparer error.

Hgco (talk|edits) said:

21 May 2013
Tax Writer,

So say I have a friend who is also a preparer and wants to share my office (which covers the location aspect which you refer to) and split the cost of my software. I have a specific company name and so does my friend. My EFIN number is associated with my personal and company NAME and location, and my friend's EFIN number is likewise associated with his personal and company NAME and location.

When I set up my records for e-filing with the software company before the season starts my name, company name, location, and EFIN are provided to the software vendor for registration.

My software company is not going to allow my friend to prepare and e-file returns with his company name, using software that is registered to my company name. He wouldn't even be allowed to obtain program updates! Therefore it goes back to forming some type of NAMED entity for which both parties are the principals of, and establishing an EFIN in that name and location.

I don't disagree that software companies will issue a license to additional users once the set number of (with my vendor, computers) has been exceeded. However, the software company will require that all users prepare and e-file returns under the same firm name. At least that how it works with my software company.

Don't get me wrong, I am eager to split the cost of the over-priced software with a colleague, but I don't see that happening without both of us being part of a consolidated company.

I will also state that I am not a lawyer either.

AgwmTax (talk|edits) said:

21 May 2013
Hgco, which tax prep software are you using?

i believe Drake will allow multi location with two different EFIN. Please check with your software vendor.

The issue is of software license. I believe none will allow a software license to be split between unrelated entities. So when you register the software only one entity will be recognized.

Ramcfo (talk|edits) said:

21 May 2013
It sounds like most of us are on the same page. The software we use is Lacerte, and you can't have multiple firm names. You can however have multiple preparers using their own unique PTINs. It seems the cleanest approach would be to create a cost sharing partnership with each of our own corporations as partners. Professional liability of the other preparer's crossing over is my only other concern.

EatonCPA (talk|edits) said:

21 May 2013
Isn't this essentially the same thing that any accounting firm with more than one CPA deals with?

Tax Writer (talk|edits) said:

21 May 2013
However, the software company will require that all users prepare and e-file returns under the same firm name. At least that how it works with my software company.

If it's Lacerte, they only allow one firm name. I just never thought it was that big of a deal-- it seems like a simple contract could cover this issue, like, stating the obvious-- that if the return has your PTIN on it, then you are the paid preparer on the return? But I understand your concerns. Lacerte is very pricey and getting pricier ever year, so creating an cost-sharing partnership or paying a lawyer to draft a liability contract would almost certainly be cheaper than paying for two programs. In the end, you have to do what feels comfortable to you. If any potential liability issue is going to keep you awake at night, then don't do it.

Taxaway (talk|edits) said:

21 May 2013
However, the software company will require that all users prepare and e-file returns under the same firm name. At least that how it works with my software company.

As with ProSeries, though I am the one who was the ERO for all returns, so not all users need a separate EFIN. (Had an arrangement for one tax season.)

Which means that one of the two would be identified as the transmitter whose name would appear as preparer/signer on the tax return.

No, at least with ProSeries, you can indicate which preparer on the info worksheet, ie Preparer#2, whose name will appear, and I would be the ERO. Further, nothing says this Preparer#2 has to be an employee of the firm, you can arrange whatever contract between ERO and preparer. There might be additional license fees if this other preparer was operating at a second location, but this didn't apply in my case.

Hgco (talk|edits) said:

21 May 2013
AgwmTax,

I have been an unfortunate user of the ATX brand which until this year was a pretty decent product (and now shopping for new tax software). The bottom line, which I think that we have all agreed on is that the software must be purchased under a single firm/user name regardless of the mutiple location aspect. That was my point.

ZL28 (talk|edits) said:

23 May 2013
I too would be concerned about litigation.

What if your partner gets sued, now you are on the lawsuit also since you are a partnership.

Would wonder about a lawyer's comments on that.

Also, what if you are not at the same location...i guess any two proprietors could go get a mutual po box and now you share an address.

though some softwares charge an addl fee i think after you hit a certain # of returns, but i imagine it's still cheaper than each getting the software separately.

it's a tough balance.


if atx had upped their fees $100 - $200 per customer, i think they wouldn't have had to cut corners and use that raven database and cause such detriment to their users. Now our detriment is their detriment and thousands of us are out there looking for new software.

AgwmTax (talk|edits) said:

23 May 2013
If the software allow two separate EFIN's which some do then they could try it that way. As far as liability etc. that is a different issue and they need to get legal advice. I am not a lawyer but i don't think using a shared tool is going to attribute direct liability. I think it will depend on the nature of the wrongdoing and what the other partner did or had involvement with respect to that.

Now if the reason for the lawsuit is that the tool was defective, then that is a different issue.

Hgco (talk|edits) said:

23 May 2013
ZL28,

if atx had upped their fees $100 - $200 per customer, i think they wouldn't have had to cut corners and use that raven database and cause such detriment to their users. Now our detriment is their detriment and thousands of us are out there looking for new software.

They (ATX) have raised their rates $100-200 each year and we still ended up with this junk software. Before CCH got their hands on ATX the well functioning Max package sold for $775.00. I think it is more a matter of raising prices and cutting corners.

ZL28 (talk|edits) said:

23 May 2013
maybe you are gith hgco.

couple of thoughts though.

part of reason atx has to charge more is b/c they bought atx.

maybe they paid 50million or i don't know how much...but that purchase price has to be covered, and accordingly they charged more.

my thinking re the extra 100-200 per customer is that they then could have used SQL instead of Raven and avoided much of the

problems they have produced.

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