Industry Expert Discusses Tax Preparation Services

• On 3:52 pm EDT, Thursday August 27, 2009

67 WALL STREET, New York - August 27, 2009 - The Wall Street Transcript has just published its Funeral services and Tax Preparation Report offering a timely review of the sector to serious investors and industry executives. This 57 page feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Estate Tax Planning - Death and Taxes - Tax Accounting Services - IRS Audit Targets - Cremation Market - Funeral Service Providers - Increasing Competition - Imported Chinese Caskets - Traditional Funeral Service - Membership Retention Rate - Funeral Trends - Potential of the Publicly Traded Companies - Public Funerals

Companies include: Intuit (INTU); Jackson Hewitt (JTX); H and R Block, Service (HRB); Gilman Ciocia (GTAX); Corporation International (SCI); Carriage Services (CSV); Keystone North America (KNA:TSX); Stewart Enterprises (STEI); Hillenbrand (HI); StoneMor (STON); Matthews International Corp. (MATW); Aurora Casket Company.

In the following brief excerpt from the 57 page report, Cindy Hockenberry, Tax Information Analyst of the National Association of Tax Professionals, discusses the tax preparations industry.

TWST: Would you tell us about your organization?

Ms. Hockenberry: We are the National Association of Tax Professionals; we currently have about 19,800 members who are tax professionals. They can be CPAs, attorneys, enrolled agents, unenrolled tax preparers, and we provide education and research, and other resources to them. We are basically a trade organization. We were founded in 1979, and we're located in Appleton, Wisconsin.

TWST: What should people consider when choosing a tax professional?

Ms. Hockenberry: That's the $64,000 question. We get asked that every tax season when somebody is doing an article on how to find a tax preparer. When you're completely starting from scratch, most people talk to friends and family, co-workers and say, "Who do you have do your tax return?" That's one place to start. Or you could look in the phone book and see who's out there. Once you start actually speaking to the tax professionals, you want to find somebody who keeps up with their education. Tax law constantly changes, so you want to make sure that the person that you're dealing with is familiar with all the current laws and the changes that have taken place because it's endless, it's non-stop. You're going to want to find somebody who is available all year. Taxes and tax problems don't end April 15. If something comes up during the year, your life situation changes, you have a death in the family, you have a marriage, you have children, a divorce, you're thinking about starting a business, you're going to want to talk to your tax preparer to find out the best strategy to take. You are going to want to find out what their background is, what kinds of returns do they prepare. Having credentials like a CPA or an enrolled agent is nice to have. There are a lot of unenrolled preparers out there that are extremely knowledgeable, that have been in business for a really long time, have never had problems with the IRS.

TWST: What are the advantages and disadvantages of selecting a large firm over a small firm, or using a software package?

Ms. Hockenberry: I guess it all depends on the complexity of the return and how much money you're willing to spend. For the most part, the free online tax preparation and e-filing that the IRS has is adequate. They have a portal on their site where you actually leave the IRS site and then you can choose from a list of vendors, those are typically out there for people that have lower income. A lot of them have income limits around $50,000 or less or $54,000 or less, or you have to be in the military, you have to be eligible for the earned income credit, those types of things. Typically those are simpler returns. I would say that the Gen Xers or even the Gen Y people are pretty technical anyway, and they can work their way around a software program or a Web site very easily, and I think that's kind of where those types of sites are geared towards. If you have something that's a little more complicated - maybe you have rental property, maybe you have a small side business or your income is too high for those free sites - then using off-the-shelf software is a pretty good alternative. It does the math check for you, it makes sure you pick up the right tax, it will alert you if you do something wrong like forget a social security number for a dependent or something like that, which is nice. The Treasury Inspector General did a study on common errors that occur on Form 1040, and one of them was math errors or picking up the wrong tax or forgetting social security numbers.

TWST: Would you give us an overview of the estate tax?

Ms. Hockenberry: When somebody passes away, all the assets that they own are valued at fair market value. If you die in 2009 and the value of your assets is $3.5 million or more, you have to file an estate tax return and pay estate tax. The estate tax return is Form 706, and the estate tax is quite steep, I mean it can be high. Now if you die in 2010, you're in luck because they repealed the estate tax. However, they only repealed it for 2010. If something isn't done to extend that repeal, then in 2011 we're going to go back in and you're going to be paying estate tax again.

TWST: You said it's steep - is it a percentage?

Ms. Hockenberry: It is a percentage, and it can be as high as 50% of your estate, and that's why people are all up in arms about the estate taxes because you work all your life to amass your fortune and then the government swoops in and takes half of it when you die. It is significant because on top of the federal estate tax, you might have state estate tax as well. Now the rules differ for every state, and I couldn't even begin to tell what they are.

TWST: Thank you. (LMR)

CINDY HOCKENBERRY Tax Information Analyst National Association of Tax Professionals P.O. Box 8002 Appleton, WI 54912-8002 (800) 747-3402 (800) 747-0001 - FAX www.natptax.com e-mail: natp@natptax.com

The Wall Street Transcript is a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs and research analysts. This 57 page special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online .

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