NATP Releases 2019 Software Survey Results

NATP Releases 2019 Software Survey Results

NATP Releases 2019 Software Survey Results

Readers Give Drake Tax the Highest Rating in Six Categories

The National Association of Tax Professionals (NATP) this week announced the results of their 2019 Software Survey. The NATP asks respondents to rate their experience with the tax preparation software they used during the previous filing season, and the results can often inform readers’ purchasing decisions for the upcoming filing season.  

Drake Software customers gave Drake Tax the highest rating received by any tax preparation software in six categories: Software Reliability, Timely Software Updates after Federal Tax Law Changes/Updates, Timely Software Updates after State Tax Law Changes/Updates, Customer Service, Technical Support, and Overall Satisfaction. As the software receiving the highest number of individual respondents by a significant margin—generally fluctuating between 300 and 400—it indicates the results are likely representative of the average Drake Tax user experience.


Respondents from nine of the eleven featured tax packages said that reliability was their number one consideration when choosing software for filing season. In fact, 93% of Drake Tax respondents said it was their primary concern, which could explain why it had the highest rating in the Software Reliability with System Bugs, Errors, Crashes, Etc. category: 4.5. 


It goes without saying that tax professionals keep a break-neck pace during filing season. That’s why it’s imperative that their tax preparation software is always up to date—especially when tax law changes are implemented mid-season.

To measure how effective each company was at implementing these updates, the NATP broke it down into two categories: Timely Software Updates after Federal Tax Law Changes/Updates and Timely Software Updates after State Tax Law Changes/Updates, Customer Service. Respondents rated Drake Tax the highest in both categories.


Drake Software is known across the industry for its customer support. Whether answering the phones within minutes in the height of tax season or hosting in-depth classroom training sessions, Drake has made support a company-wide focus—and NATP survey respondents believe that work paid off. They gave Drake Software the highest rating for both Customer Service from Software Company (4.6) and Technical Support from Software Company (4.6).


Respondents were asked to rate their Overall Satisfaction with their tax prep package, and Drake Software customers once again gave Drake Tax the top rating. Interestingly, 93% of Drake Tax users said they would use the same tax preparation software next year.

Want to see for yourself why Drake Software customers prefer Drake Tax? Check out the free trial on

Have something to say about your experience with Drake Tax? Let us know in the comments below!

Check out the full survey at!

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Taxpayers with Significant Tax Debt Could Lose Passports

Taxpayers with Significant Tax Debt Could Lose Passports

Taxpayers with Significant Tax Debt Could Lose Passports

The Internal Revenue Service is warning taxpayers they risk losing their passports if “significant” tax debt is not paid. Those taxpayers are urged to contact the IRS immediately or have travel plans delayed later.

The passport action is mandated by the Fixing America’s Surface Transportation Act (also known as the FAST Act). The IRS is directed to notify the State Department which taxpayers owe a seriously delinquent tax debt of $52,000 or more. The law mandates that the State Department deny those taxpayers passport renewal or application for a new passport.

If a taxpayer currently has a valid passport, State may revoke the passport or limit a taxpayer’s ability to travel outside the United States.

Taxpayers who are certified as owing a seriously delinquent tax debt receive a Notice CP508C from the IRS that explains the steps needed to resolve the debt. IRS telephone assistors can help taxpayers with the options, such as setting up a payment plan or other measures.

The IRS says the important thing for taxpayers to remember is not to delay, since some resolutions take longer to set up than others.

No Time to Waste

Taxpayers with travel plans who have had their passport applications denied by the State Department need to call the IRS as soon as possible to resolve their tax issue and reverse the passport certification.

When expedited, the IRS can generally shorten processing time by 14 to 21 days from the normal 30 days. To qualify for expedited processing, taxpayers must inform the IRS they have travel scheduled within 45 days, or that they live abroad.

For expedited treatment, taxpayers must provide the following documents to the IRS: 

  • Proof of travel. This can be a flight itinerary, hotel reservation, cruise ticket, international car insurance or other document showing location and approximate date of travel or time-sensitive need for a passport.
  • Copy of letter from State denying their passport application or revoking their passport. State has sole authority to issue, limit, deny or revoke a passport.

The FAST Act also allows the State Department to revoke a taxpayer’s passport at the request of the IRS. For example, the IRS may recommend revocation if the IRS had reversed a taxpayer’s certification because of their promise to pay, and they failed to pay. The IRS may also ask State to revoke a passport if the taxpayer could use offshore activities or interests to resolve their debt but chooses not to.

In cases of revocation, the IRS will send Letter 6152, Notice of Intent to Request U.S. Department of State Revoke Your Passport, to the taxpayer to let them know what the IRS intends to do and to give them another opportunity to resolve their debts.

Options for Resolution

There are several ways taxpayers can avoid having the IRS notify State of their seriously delinquent tax debt. They include:

  • Paying the tax debt in full,
  • Paying the tax debt timely under an approved installment agreement,
  • Paying the tax debt timely under an accepted offer in compromise,
  • Paying the tax debt timely under the terms of a settlement agreement with the Department of Justice,
  • Having a pending collection due process appeal with a levy, or
  • Having collection suspended because a taxpayer has made an innocent spouse election or requested innocent spouse relief.

Many times, taxpayers qualify for one of several relief programs to settle tax debts. One option is a payment plan, which can be requested by filing Form 9465. Taxpayers can download this form from and mail it along with a tax return, bill or notice. Taxpayers who are eligible can use the Online Payment Agreement system to set up a monthly payment agreement. Using the Online Payment Agreement system is cheaper and can save time.

In some cases, an offer in compromise can set up an agreement between the taxpayer and the IRS that settles the tax liability for less than the full amount owed. The IRS looks at the taxpayer’s income and assets to determine the taxpayer’s ability to pay. Taxpayers can use the Offer in Compromise Pre-Qualifier tool to help them determine whether they’re eligible for an offer in compromise.

Who Gets a Pass?

The IRS also will not certify a taxpayer as owing a seriously delinquent tax debt or will reverse the certification for a taxpayer:

  • Who’s in bankruptcy,
  • Who’s identified by the IRS as a victim of tax-related identity theft,
  • Whose account the IRS has determined is currently not collectible due to hardship,
  • Who’s located within a federally declared disaster area,
  • Who has a request pending with the IRS for an installment agreement,
  • Who has a pending offer in compromise with the IRS, or
  • Who has an IRS accepted adjustment that will satisfy the debt in full.

It should be noted that the IRS cautions the above list is “subject to change.”

For taxpayers serving in a combat zone who owe a seriously delinquent tax debt, the IRS postpones notifying the State Department of the delinquency and the taxpayer’s passport is not subject to denial during the time of service in a combat zone.

For more on denying, revoking passports because of tax debt visit

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Know the Warning Signs of Client Data Theft

Know the Warning Signs of Client Data Theft

Know the Warning Signs of Client Data Theft

Ever had one of those days at work where things just didn’t seem quite right? Did you ever wonder if those little nagging problems might point to something larger – something like client data theft?

Since we’re between tax seasons, maybe now is a good time to brush up on the telltale signs that the office may have experienced a data theft that led to bogus tax returns being filed in your clients’ names.

The Internal Revenue Service and its Security Summit partners are taking this time to urge the tax community to review their data security protection. They’ve offered a “Taxes – Security – Together” checklist as a starting point. And knowing the warning signs of client data theft is Number 4 on the list.

Previous checklist items include: deploying the “Security Six” basic steps, creating a written data security plan and educating yourself on email phishing scams.

“Learning the signs of identity theft is critical for anyone handling taxpayer data,” said IRS Commissioner Chuck Rettig. “It can be as subtle as an unusually slow computer system or as obvious as multiple clients unexpectedly receiving the same IRS notice. Paying attention to these details is critical, and fast action alerting the IRS and calling in a security expert can help protect taxpayers and your business.”

No doubt about it, the Security Summit – made up of IRS and state taxing agency officials and tax industry partners – is making big progress against tax-related identity theft. But the fight is far from won. Cybercriminals are an agile lot and have learned to quickly evolve. So data thefts at tax professionals’ offices remain a major attack strategy. The stolen data is then used to create fraudulent returns that are harder for the IRS and its Summit partners to detect.

Signs of Client Data Theft

The IRS and Summit partners have created a list of warning signs that a tax professional or their office may have experienced a data theft:

  • Client e-filed returns begin to be rejected by the IRS or state tax agencies because returns with their Social Security numbers were already filed;
  • Clients who haven’t filed tax returns begin to receive taxpayer authentication letters (5071C, 4883C, 5747C) from the IRS to confirm their identity for a submitted tax return.
  • Clients who haven’t filed tax returns receive refunds;
  • Clients receive tax transcripts that they did not request;
  • Clients who created an IRS Online Services account receive an IRS notice that their account was accessed or IRS emails stating their account has been disabled. Another variation: Clients unexpectedly receive an IRS notice that an IRS online account was created in their names;
  • The number of returns filed with the tax professional’s Electronic Filing Identification Number (EFIN) exceeds the number of clients;
  • Tax professionals or clients responding to emails that the firm did not send;
  • Network computers running slower than normal;
  • Computer cursors moving or changing numbers without touching the keyboard;
  • Network computers locking out employees.

“Tax professionals should be on the lookout for these scary scenarios that have hit firms across the country, jeopardizing data of the company and their clients,” Commissioner Rettig said.

Because federal and state tax systems only accept one unique Social Security number, taxpayers often discover they are a victim when they attempt to e-file and their tax return is rejected because a return with their SSN already is in the system. More commonly, the IRS identifies a return that could be an identity theft return and sends a letter to the taxpayer asking them to contact the agency to let the IRS know if they filed the return.

Sometimes, the identity thief will attempt to leverage his stolen data by using the taxpayer’s information to access the IRS’ Get Transcript system. Such an attempt to create a fraudulent account will generate another warning sign: the two-factor authentication system used by Get Transcript will disable the account and send the taxpayer a letter to confirm their identity.

Taxpayers who get a transcript in the mail but did not order one are another warning sign that client data may be misused.

Check Your EFIN

One easy way to see if your client data may be compromised is to make a weekly check of returns filed under your office’s Electronic Filing Identification Number (EFIN). Tax pros can access their e-File applications and select “Check EFIN Status,” to see a count. The report is updated weekly. If the numbers are inflated, contact the IRS e-Help Desk at (866) 255-0654.

Another way to check is to log in to our Drake Support web site, select My Account, and go to the online E-File Database.

Check for acknowledgements for returns you didn’t e-file. Acks are usually sent soon after a return is transmitted.

Evidence Something’s Phishy

Tax pros who fall victim to “spear phishing” email scams may suddenly see responses to emails they never sent. If a practitioner is duped into providing username and password information to the thief, the cybercriminal often harvests the tax pro’s contact list, stealing names and email addresses of colleagues and clients. This further enables the crooks to use the tax firm to expand their scam.

Always be alert to phishing scams, even if the emails appear to come from a colleague or client. If the language sounds a bit off or if the request seems unusual, contact the “sender” by phone to verify rather than opening a link or attachment.

Finally, there are several signs that office computer systems may be under attack or may be under remote control, such as the cursor moving with no one at the keyboard. The IRS is aware of many examples where cybercriminals gained access to practitioners’ office computers, completed pending Form 1040s, changed electronic deposit information to their own accounts and then e-filed the returns – all performed remotely.

Tax professionals who notice any signs of identity theft should contact their state’s IRS Stakeholder Liaison immediately. The process for reporting data theft to the IRS is outlined in Data Theft Information for Tax Professionals.

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TIGTA Finds IRS Needs More Work on Amended Returns

TIGTA Finds IRS Needs More Work on Amended Returns

TIGTA Finds IRS Needs More Work on Amended Returns

The office tasked with overseeing the Internal Revenue Service says the agency hasn’t improved procedures enough when it comes to reviewing amended tax returns.

The Treasury Inspector General for Tax Administration carried out its audit to follow up on earlier TIGTA examinations that found risks of fraudulent or erroneous tax refunds from amended tax returns.

This latest audit used a sample of some 230 amended tax returns, taken from the total of more than 1 million amended returns the IRS processed in 2017. Auditors found 33 returns they labeled “questionable” with more than $74,900 claimed in refunds.

TIGTA estimates, based on the sample results, the IRS issued almost $360 million in potentially erroneous tax refunds that was claimed on over 158,000 amended tax returns in 2017.Using those figures as a guide, the audit forecasts the IRS could conceivably pay out almost $2 billion in erroneous refunds over the next five years.

The Breakdown

TIGTA’s audit found that of the 33 flagged returns, 23 came from employee processing errors that led to $58,204 in potentially erroneous tax refunds. The audit uses those 23 returns to extrapolate that similar employee processing errors cost the IRS some $279 million in refunds in 2017.

The audit report says the errors included:

  • Tax examiners or the CSRs (Customer Service Representatives) erroneously allowed adjustments when the taxpayer did not include the required form with the amended return. These included returns in which tax examiners or the CSRs processed claims to change the taxpayer’s standard deduction to itemized deductions. However, the taxpayer failed to attach the required Schedule A, Itemized Deductions, to the amended return. Internal guidelines require that Schedule A be attached to the amended tax return to allow a change from standard to itemized deduction.
  • Tax examiners or the CSRs erroneously allowed deductions to which taxpayers were not entitled. These included returns in which tax examiners or the CSRs allowed deductions for student loan interest when taxpayers claimed the deduction for a nondependent student. Student loan interest deductions are only available for individuals legally obligated to pay the loan, i.e., parents or other relatives cannot claim a student loan interest deduction if they are not legally obligated to make loan payments.
  • The CSRs did not forward amended returns to the Examination function when required. These included returns with claims for a reduction in Net Investment Income Tax that was over the specified threshold. Internal guidelines state that when claims meet specific criteria, they must be routed to the Examination function for review.
  • Tax examiners or the CSRs erroneously adjusted credits on associated taxpayer tax accounts. These included returns in which the tax examiner or the CSR incorrectly adjusted a refundable tax credit that the taxpayer neither requested nor was entitled.

TIGTA found that the 10 remaining questionable returns that did not involve employee error would have been caught and rejected by existing e-file software if amended returns were filed electronically.

Accounting Today reports that the Inspector General has recommended in years past (previous audits went as far back as 2012) that the IRS change Form 1040, allowing taxpayers to amend their original tax returns using the same form. TIGTA also has recommended that electronic filing be enabled for amended returns, saving over $17 million in processing costs.

While disagreeing with the recommendation at the time, the IRS said it would consider changing the Form 1040X to include data related to income changes along with moving toward e-filing of amended returns.


The Inspector General makes a number of recommendations to the IRS, including:

  • Review the 23 questionable amended tax returns identified and take the actions needed to ensure taxpayers receive only the benefits to which they are entitled.
  • Implement adequate processes and procedures to identify and correct employee errors to reduce erroneous refunds issued.
  • Complete a business case and request funding for expansion of e-filing to amended returns in the 2020 Filing Season in an effort to reduce unnecessary processing costs and erroneous refunds resulting from amended returns.
  • Update processing procedures to hold the amended tax return from further processing when the taxpayer’s tax account.

The IRS agreed with most of TIGTA’s new recommendations, but disagreed on the need to hold amended returns until the taxpayer’s identity could be confirmed in cases of identity theft. Agency management claimed that existing controls already provide adequate protection.

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IRS Covers Phishing Scams in “Taxes-Security-Together” Campaign

IRS Covers Phishing Scams in “Taxes-Security-Together” Campaign

IRS Covers Phishing Scams in "Taxes-Security-Together" Campaign

The IRS is joining with its Security Summit task force to warn tax professionals about the continuing threat posed by phishing emails to their data security efforts. Despite best efforts, phishing remains the most common tactic used by cybercriminals to steal sensitive data.

IRS Commissioner Chuck Rettig urges tax pros to take time during the summer months to review their data security measures.

“You can take all the cybersecurity steps in the world, but tax professionals and others in the business world should remember you are only as safe as your least educated employee,” said Rettig. “Cybercriminals use phishing emails and malware to gain control of computer systems or to steal usernames and passwords. These can provide a treasure trove of information that can lead to tax-related identity theft.”

A Common Start to a Shared Problem

More than 90 percent of all data thefts begin with a phishing email. Many times an employee opens a link that takes them to a fake web site or opens an attachment embedded with malware that secretly downloads onto their computer.

A variation on this theme termed “spear phishing,” uses bogus email messages posing as trusted source, meant to bait the recipient into opening an embedded link or an attachment. The email may make an urgent plea to the tax practitioner to update an account immediately. A link may appear to go to another trusted site – a cloud storage site or a tax software provider login page, for example – but it’s just another web page controlled by the thief.

Attachments may contain malicious software. One variety is called keyloggers; these small and nearly invisible programs secretly infect computers and provide the thief with the ability to see every keystroke. Thieves can then steal passwords to various accounts or even take remote control of computers, enabling them to steal taxpayer data.

The overarching characteristic of any phishing attack is deception. Some of the most common spear phishing scams seen by the IRS include thieves posing as prospective clients, sending unsolicited emails to the tax pro. After an exchange of emails, the thief sends a message with an attachment, claiming it contains tax information needed to prepare a return.

Instead, it actually contains spyware that allows the thief to track every keystroke.

More Than One Way to Steal

There are other scenarios, however, that could ensue from a phishing attack. The IRS also sees thieves posing as tax software providers or data storage providers with emails containing links that go to web pages that mirror real sites. The thieves’ goal is to trick tax professionals into entering their usernames and passwords into these fake sites, which the crooks then steal.

Sometimes the cybercriminal will encrypt the data rather than steal it. This is known as a ransomware attack.

Once they encrypt the victim’s data, thieves demand a ransom in return for the code to unencrypt the data. It should be noted that just because the cybercriminal is paid a ransom does NOT mean he’ll actually give the code to unencrypt your data. Many times the thief just takes the ransom and disappears.

Because of this, the Federal Bureau of Investigation warns users not to pay a ransom. The FBI says ransomware attacks are a growing threat to businesses and others. 

How to Foil Phishing

Educated employees are the key to avoiding phishing scams, and office systems are only as safe as the least informed employee. These simple steps also can help protect against stolen data: 

  • Use separate personal and business email accounts; protect email accounts with strong passwords and two-factor authentication if available.
  • Install an anti-phishing tool bar to help identify known phishing sites. Anti-phishing tools may be included in security software products.
  • Use security software to help protect systems from malware and scan emails for viruses.
  • Never open or download attachments from unknown senders, including potential clients; make contact first by phone, for example.
  • Send only password-protected and encrypted documents if files must be shared with clients via email.
  • Do not respond to suspicious or unknown emails; if IRS-related, forward to [email protected].

The IRS and its Security Summit partners of federal and state tax officials and tax industry leaders, have issued a “Taxes – Security – Together” checklist to help remind tax professionals of the basic steps that can protect their data – and the data of their clients:

Publication 5293, Data Security Resource Guide for Tax Professionals, provides a compilation of data theft information available on

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