Buying a tax guidebook used to be as simple as filing a short form. You had two choices, three at most. They all seemed about the same. Easy as flipping a coin.
Not any more.
Despite talk these days of tax simplification, choosing a tax guide -- the first step in preparing federal tax returns for millions of Americans -- has become as complicated as a Form 1040 Schedule A.
In a nation that seems to have become obsessed with personal finances, there never have been more tax workbooks, tip books and guides. And never has there been more innovation -- and sour grapes -- in a traditionally staid and boring publishing sector.
A visit to Washington-area bookstores turned up 14 tax-preparation guides, at least a half-dozen tax-planning titles and about as many texts on after-tax problems, such as IRS audits and going to court.
"There's a proliferation because of market conditions," says Michael Whiteman, professor of taxation at the University of Massachusetts, Amherst, and a former IRS agent. "They're all trying to exploit the taxpayer phobia that heightens this time of year."
Says Mary Traina, vice president of Hilltop Publications Inc., publisher of Everyone's 1985 Income Tax Guide, "A lot of publishers feel that with the increase in the yuppie market you have an increase in people who are getting much more sophisticated about their personal finances. So why not take advantage of it?"
Publishers, says Whiteman, are doing exactly that with "mostly well written," but hyped guidebooks to attract taxpayers who no longer want just to survive tax time. The target group is the 74 percent of taxpayers who, according to a Money magazine survey last year, believe they are paying too much taxes, and the 46 percent who file their returns without professional assistance. Those taxpayers, say industry experts, are looking more for schemes than hand-holding.
"The marketing device is how much you can promise," says Whiteman. "The more promised, the more salable. It is commercialism to the ultimate."
Covers of current tax guides are jammed with promises: "Conquer Your Fear of Filing!" "What the IRS Doesn't Tell You!" "400 Foolproof Methods for Paying Less Taxes!"
The boasts, however, outnumber the guarantees. H&R Block does say that if its workbook doesn't help you at tax time, "one of H&R Block's trained tax preparers will" (meaning Block will subtract the $6.95 price of the book from its fee: average, $40). Tax Hotline, a monthly newsletter, guarantees to "make money for you or your money back." But that's about it.
How different can each guide be?
"In the final analysis, they're all dealing with cold, hard statutory law," says Whiteman. "You really can't be too free-spirited when it comes to the law. If you look through the pages you find striking similarities."
Publishers and the public see it differently.
Two perennial favorites -- J.K. Lasser's Your Income Tax and H&R Block's Income Tax Workbook -- were holding their own on the best seller lists until recently, when a newcomer, The Arthur Young Tax Guide 1985, unexpectedly skyrocketed ahead.
The book is listed in this week's Publisher's Weekly as the number-one trade publication. "The biggest surprise in tax publishing in 50 years," is how one industry insider describes the coup.
"The success of the book is far greater than anyone ever guessed," says Mort Meyerson, in New York, director of communications for the Arthur Young Co., one of the venerable "Big Eight" accounting firms. "We'll probably run out of copies before we run out of demand."
How an upstart -- essentially a coffeetable tax guide -- outdistanced a crowded field of experienced competitors is a lesson in smart and confident marketing of something a little different, at the right time.
"I had the idea to take the IRS Publication 17 a free Treasury Department tax guide and annotate it," says Peter Bernstein, the Washington editor of Fortune magazine who proposed the idea to Arthur Young.
"None of the other guidebooks do that. With the exception of the J.K. Lasser book, none are really that comprehensive."
Publishing the book was a calculated risk: Because it essentially is an interpretation of IRS Publication 17, its print date depended on how soon the U.S. government released its guide. Bernstein, who edited the book, estimates 50 Arthur Young partners and associates spent more than 10,000 hours annotating the basic IRS guide with explanations, examples and warnings. It came out about six weeks later than most of its competition.
Now in its fifth printing with 300,000 copies on the shelves, its slick packaging and hefty size are designed to intimidate serious do-it-yourselfers to wonder, "Will anything less do?" and then stagger away with the 3-pound, 645-page volume.
"I noticed they made sure to touch base on all the tax-savings features that we have," grouses Bernard Greisman, for 25 years the editor of the bestselling J.K. Lasser's Your Income Tax.
The oldest and most widely imitated of the tax guides, the J.K. Lasser book, which this year has printed about 1 million copies, got its start in 1938 when Leon Shimkin, publisher of Simon and Schuster, hired a publishing field accountant named J.K. Lasser to write a tax guide. For two years, it had little impact. When Congress passed a withholding tax law in 1940, it became "an overnight success." Lasser died in 1954, but the book held on to the name, which had become almost synonymous with April 15.
Greisman, 59, who now is the J.K. Lasser Tax Institute, takes an I've-seen-it-all attitude toward the Arthur Young book and other challengers. "To me, it's a deadly boring subject. Some of these books are heading toward a market which isn't our market. H&R Block is simplified, a very light book. Ours looks very heavy. I've got to get in a lot of detail. The Arthur Young book looks sophisticated."
The J.K. Lasser Tax Institute, says Greisman, is "a figure of speech. I just sit down and sweat it out. I've been at this a long time. Sometimes you come in with completely new material and you don't know from nothing. It just doesn't make sense. I survived this year's changes, but it was the roughest in 30 years."
The J.K. Lasser book has shown comparable resilience in surviving its competition. Within a year of the original Lasser's death, a "distant cousin" and tax accountant, S. Jay Lasser, decided to put out his own tax guide. A brief publishing scuffle led to a contractual agreement that, among other provisions, required that the two books never appear similar in design.
It was also agreed that S. Jay Lasser's name would always appear on the bottom third of his book's cover and J. K. Lasser's name on the upper third of its cover. Although he has since joined his late cousin, the S. Jay Lasser byline remains on the Everyone's 1985 Income Tax Guide, including the 200,000 copies printed this year.
"Our book falls somewhere in between Block, which is very simplified, and the Simon and Schuster book, which is confusing to many people and gives you more information than you need," claims Traina, who publishes the S. Jay Lasser guide for Hilltop Publications. "We try to get to the point directly without too much explanation, yet we do get into the nitty gritty."
The Arthur Young book? "It's a big hunk of a book . . . but they got their foot into the market."
H&R Block has gained a reputation in 15 years for providing the simplest of the tax guides. "We don't want to get too long-winded. We want white space and large print," says Al James Galato, corporate director of Public Affairs for H&R Block. "Our demographics are lower-middle to upper-middle class taxpayers, average Americans with families."
The book, marketed as "the best known, prepackaged tax helper in the business," is what the industry calls "a hand-holder," guiding readers step-by-step, line-by-line through their tax forms.
Despite its simple approach, the publication is backed by perhaps the most extensive tax-preparation operation of any of the guides. "We have people who are on top of new regulations from the day they are conceived," says Galato, describing a nationwide organization of more than 300 district managers who constantly feed information and signal problem areas to Block's editorial staff in Kansas City.
"We literally write the book twice a year," says Charles Levine, Block's editor for five years. "Beginning in June, we go through the whole book and make changes based on tax laws passed during the first six months of the year. Then, by the end of the summer, the IRS releases their forms and we go through the book again and make sure everything is correct."
Ironically, should Congress simplify tax laws, the only tax guide guaranteed not to suffer is Your Federal Income Taxes. The free, 184-page Treasury Department book, also known as Publication 17, is used by approximately 3 million taxpayers.
A flat-tax system as proposed by some legislators could eliminate the tax advice and guidebook industry. Industry experts, however, tend to laugh at the idea of tax simplification.
"Regardless of what the federal government does, we'll always be in business," says H&R Block's Galato. "Tax simplification is really a euphemism for tax reform. And any tax reform will ultimately make it all the more complex.
"Even if the laws were simplified, the transitional rules would be so complex that people would need more help. By the time we got to a simplified tax return, Congress would probably change it back to the way it was."
Greisman agrees: "Flat tax can't be done. Too many special interests. There's always going to be exceptions upon exceptions. We have a legislative industry in Washington. Congress is constantly manufacturing tax laws.
"Congress is like Mickey Mouse in Fantasia when the wizard's apprentice gets a hold of the magic wand and can't stop things from happening. The tax-guide industry is stronger than ever."