Tax preparers lost $ 468 mn. in revenues this year!
Tax Industry Loses Market Share as More Taxpayers e-File from Home in 2013 – reported CPATrendlines.[1]
Through May 10, the IRS received more than 43.6 million self-prepared e-file returns, up from 41.7 million a year earlier. Accounting Today reported that in 2013, tax prep fees averaged $ 246 for form 1040.[2] In other words, tax industry lost nearly $ 468 million. in revenues in 2013!
CPATrendlines report also states that more people are using IRS.gov to get answers, file their returns and resolve issues. By May 2013, the IRS web site has been accessed more than 300 million times, up almost 25 percent [3] compared to the same time last year.
What does all this mean for CPAs and Tax Preparers?
Newer technologies are making it possible and easier for people to file their own tax returns. Technology is reducing the information gap.
More people are aware of where to find the relevant information to be able to file their own tax returns.
Families have probably realized that they can save $ 1000 if they file their own tax return.
The trend is likely to continue as more people talk to each other about their experience of filing tax returns.
“Cookie Cutter” tax returns will likely be filed more by self-preparers.
A Challenge is also an Opportunity:
Through accounting shows, Pransform met nearly 400 firms over last few weeks. We found that firms are adding more services, focusing on getting more clients that need specialized tax preparation assistance, facing fee pressures but are trying to move onto value added work. Tax preparers are already seeing their business models changing quickly.
What are you doing?
Do you think you are seeing a need to change your own business model? If yes, what are you doing about it? If not, why do you think you will be okay? Please share your thoughts.