Print
Solutions July 2005
Case
Study
Tax
form season peaks for manufacturers
in mid-winter, so why is Marilyn
Mraz sweating to get direct mail
pieces to her tax form clients
this summer? “I like to
torment them,” she says
with a laugh. “If they don’t
order by the second reminder,
I place toothpicks under their
fingers.”
The
toothpicks are a joke, but Mraz
makes a point: Distributors who
start early have a definite advantage
when selling tax forms. “Preparation
is a key when selling anything,
but it’s the factor with
tax forms,” says Mraz, sales
manager of TransForm Technologies,
a distributorship in Norcross,
Ga. “[Tax form] clients
typically wait until the last
minute. If you’re the first
[distributor] to the party, you’ll
be less likely to lose easy business.”
Mraz’s
direct mail packages include reorder
forms, plus updated catalogs from
her manufacturer that are imprinted
with TransForm’s logo. She
sells W-2s and other tax forms
to a variety of clients, targeting
personnel agencies and mortgage
companies that use software-compatible
forms.
TransForm
Technologies’ tax form business
primarily consists of repeat orders,
so Mraz uses direct mail packages
as potential door-openers to new
business. Tax forms help distributors
penetrate accounts, but it’s
up to distributors to ring the
doorbell, she says. “It’s
good to be able to say, ‘We’ve
already provided you with tax
forms, so don’t worry about
those anymore. Now we’d
love the opportunity to quote
on your other business.’”
When end users order before November,
the beginning of the 3-month tax
forms rush, distributors have
more time to demonstrate the rest
of their services, Mraz says.
Distributors
who assume tax forms are too complex
and old-fashioned are missing
sales opportunities, Mraz says.
Printing pros who are versed in
the constructions of laser forms,
continuous forms and mailers are
well-positioned to sell them.
Also, some printing manufacturers
help distributors track and understand
yearly tax forms specification
changes made by the IRS and Social
Security Administration. (See
“2005 Tax Form Changes “
on p. 86.) To further aid distributors,
some manufacturers offer catalogs,
instructional booklets for end
users, seminars, videos and marketing
materials. To encourage distributors
to order before tax season heats
up, some manufacturers offer to
store orders and delay billing
until they ship the forms.
Electronic
filing of tax forms has cut into
tax forms business, but a ripe
market remains, mainly because
tax forms have three characteristics
distributors wish were true of
all products: They’re in
demand every year, they offer
high profit potential and repeat
orders are likely. Because the
government mandates tax form use,
literally every business needs
them. Distributors say some of
the best prospects for tax form
sales are payroll firms, accounting
companies, software dealers, financial
institutions, temporary agencies,
school districts, unions and banks.
End
users in charge of buying tax
forms often don’t want to
deal with ordering them until
absolutely necessary. Because
these buyers seldom attain multiple
quotes and their tax forms stay
on shelves only for a short time,
many end users pay a premium for
them. “There’s still
a wealth of opportunity for distributors
who want to sell tax forms,”
Mraz says.
For
aggressive distributors, tax forms
can lead to new clients. When
a furniture manufacturer called
Geo-Graphics and Forms, Beaverton,
Ore., and wanted to buy 100 1099
forms, one of the distributorship’s
sales reps drove a free box of
forms to the end user. As a result,
the distributorship landed the
manufacturer’s tax forms
business and also provided business
forms, commercial printing and
advertising work, which amounted
to annual sales of approximately
$80,000.
Geo-Graphics
and Forms, which sells W-2s and
other tax forms to a variety of
small- to medium-sized businesses
such as manufacturing firms and
distribution companies, sends
customers direct mail packages
that include reorder forms and
updated tax forms catalogs from
his manufacturer. The reorder
forms include lists of products
and quantities customers ordered
the previous year, plus updated
pricing information, and the catalogs
are imprinted with Geo-Graphics
and Forms’ logo.
—Darin
Painter
1.
Align with software firms.
Some distributors support several
software companies, tying marketing
approaches for tax forms (and
other products) to software houses.
With laser printers’ popularity,
distributors need to find out
which software packages clients
have and which IRS tax forms are
recommended for those packages.
2.
Make marketing a priority.
It’s smart for distributors
to send out catalogs, then follow
up with telemarketing. Because
tax forms offer a high percentage
of repeat business, Houston-based
manufacturer Apex Business Systems
sends distributors reorder forms
to pass along to their customers.
3.
Know the tax forms trail.
Before making a tax forms pitch,
spend some time pre-qualifying
prospects. If you know they use
an accountant or payroll service
for tax forms processing, don’t
waste your time. If customers
use an outside service, ask where
they have tax forms processed
and request a referral to that
source.
4.
Sell related products. To
maximize sales opportunities,
tax forms distributors can offer
envelopes, toner, ribbons, file
folders, software and more.
2005
Tax Form Changes
The
Internal Revenue Service made
the following tax form changes
for 2005:
1042-S:
No reprogramming necessary. Minor
backer changes.
1096:
Minor reprogramming may be necessary.
Checkboxes have been rearranged.
Backer changes, Box 5 now listing
which items need to be completed
for each form type.
1098:
No reprogramming necessary. Minor
backer changes. Box 3 includes
instructions for deduction amounts.
1098
E: No reprogramming necessary.
Minor backer changes.
1098
T: No reprogramming necessary.
Minor backer changes.
1099
A: No reprogramming necessary.
Minor backer changes.
1099
B: No reprogramming necessary.
Minor backer changes.
1099
C: No reprogramming necessary.
Minor backer changes.
1099
CAP: 2005 details not released
at this time.
1099
DIV: No reprogramming necessary.
Minor backer changes. Box 3 heading
changed to “Nondividend
distributions.”
1099
G: Reprogramming may be necessary.
Box 5 is labeled “AATA payments.”
Minor backer changes.
1099
H: No reprogramming necessary.
No changes to backer.
1099
INT: No reprogramming necessary.
Minor backer changes.
1099
LTC: No reprogramming necessary.
Minor backer changes.
1099
MISC: Reprogramming may be necessary.
Box 15A is now “Section
409A deferral” and Box 15B
is “Section 409A income.”
Minor backer changes.
1099
OID: No reprogramming necessary.
Minor backer changes.
1099
PATR: 2005 details not released
at this time.
1099
Q: No reprogramming necessary.
Minor backer changes.
1099
R: 2005 details not released at
this time.
1099
S: No reprogramming necessary.
Minor backer changes.
1099-SA:
Reprogramming may be necessary.
Heights of Boxes 1, 2, 3 and 4
have changed. Box 5 bottom checkbox
heading changed from “M+C
MSA” to “MS MSA.”
Minor backer changes.
5498:
2005 details not released at this
time.
5498
ESA: Reprogramming may be necessary.
Height of “Trustee’s
or Issuer’s FIN,”
“Beneficiary’s SSN”
and “Beneficiary’s
Name” boxes have changed.
5498-SA:
No reprogramming necessary. Box
6 heading changed from “M+C
MS” to “MS MSA.”
Minor backer changes.
940:
2005 details not released at this
time.
940EZ:
2005 details not released at this
time.
941:
Reprogramming required. Current
revision is Jan. ’05 redesigned
layout.
941
Sch. B: Reprogramming required.
Current revision is Jan. ’05
redesigned layout.
W-2:
Reprogramming may be necessary.
Minor backer changes. Additional
codes added for Box 12.
W-2C:
Current revision is Dec. ’02
W-2G:
No reprogramming necessary. No
changes to backer.
W-3:
No reprogramming necessary. No
changes to backer.
W-3C:
Current revision is Dec. ’02
W-4:
No reprogramming necessary. No
changes to backer.
W-9:
Current revision is Jan. ’05.
Changes to clarify reporting instruction
and new legislation for Homeland
Security.
Source:
TFP Data Systems, Oxnard, Calif.
