To the amazement of the numeriphobic and the lazy, millions of taxpayers slogged—or are still slogging—through their 2004 tax returns without an accountant’s help. Many of these brave souls consulted J.K. Lasser’s Your Income Tax 2005, the only tax-prep guide currently on the New York Times’list of business best sellers. Credited not to a single author but to the sage-sounding J.K. Lasser Institute, the book has outsold competitors with more famous brand names such as The Ernst & Young Tax Guide and Taxes for Dummies. How did the Lasser guide become the go-to source for self-sufficient taxpayers?
For starters, it was the first one on the market. The original Lasser guide made its debut in 1939. It was the brainchild of Simon & Schuster publisher Leon Shimkin, who didn’t waste too much time looking for an author: Jacob Kay Lasser was a field accountant who had done some work for Simon & Schuster. Lasser was crafty with numbers, but he was a dull and confusing writer—he modeled his Your Income Tax guides after college textbooks, and his index listed paragraph numbers from the tax code, rather than plain-English keywords. But there were no other income-tax guides at the time, and thus nowhere else for Americans to turn when Congress passed a daunting withholding-tax law in 1940. As a result, Life magazine recommended the Lasser book as a must read in 1941, and countless Americans shelled out $1 for the cryptic tome, hoping not to pay Uncle Sam a penny more than he deserved.
Congress kept tinkering with the tax code, so Simon & Schuster kept releasing updated versions of Your Income Tax each year. These sold well; no one wanted to reuse last year’s guide and miss a critical revision. And once taxpayers became accustomed to using the Lasser guides, they tended to stick around. A few competitors eventually emerged—one was written by an accountant named S. Jay Lasser who claimed to be Jacob’s distant cousin—but the original remained the most popular. Americans had come to trust J.K.’s advice.
It presented something of a problem, then, when Lasser died in 1954. After some deliberation, the publisher changed the guide’s byline to “the J.K. Lasser Institute.” The phrase conjured up the image of a hive of busy accountants in green eyeshades, scouring the tax code for hidden exemptions. In fact, the “Institute” was basically a one-man operation—for years, the guides were written by a Lasser protégé named Bernard Greisman, who had a helping hand from a small coterie of lawyers and accountants. But consumers embraced the myth that their tax advice was coming from a faculty of learned scholars, rather than a lone man in Larchmont, N.Y. Over the years, the Lasser guides regularly bested offerings from H&R Block and Consumer Reports.
In 1984, though, the Lasser Institute hit a snag: the launch of The Arthur Young Tax Guide, which bore the name of a Big Eight accounting firm and instantly outsold the Lasser book. Branding a tax guide with the name of a major accounting concern led consumers to believe they were privy to the same fiscal advice given to Fortune 500 companies. In fact, Arthur Young (later Ernst & Young) bragged that it committed 50 employees and 10,000 man-hours to compiling its book, which was essentially an annotation of the IRS’s official guide (tax junkies call it by its given name, Publication 17). Annual user-friendly books from Arthur Andersen, Price Waterhouse (later PriceWaterhouseCoopers), and Touche Ross (later Deloitte Touche Tohmatsu) soon followed.
These Johnny-come-latelies ate away at Lasser’s market share. Simon & Schuster printed 1.6 million copies in 1982 and fewer than a million in 1986, with further drop-offs over the ensuing decade. The competition also forced the publisher to spiff up Lasser’s presentation: The Institute tried to make the guide more appealing and readable, reorganizing the different sections to include such colloquial headings as “Planning Tips” and “Pitfalls.” In 1998, when the British media company Pearson acquired the Lasser guides from Simon & Schuster, the new owner even asked Arthur Andersen to provide “technical support” and contribute a chapter on tax planning, hoping to capture some of the corporate branding magic.
But John Wiley & Sons, which bought the Lasser brand in 1999, ditched the Andersen contribution, a move that qualifies as either brilliant or fortuitous. (It may have simply been a matter of corporate conflict; Wiley also published the Ernst & Young guide at the time.) When Enron imploded shortly thereafter, Arthur Andersen was implicated, and other accounting scandals soon followed. Consumer trust in corporate accountants withered.
Thankfully, Lasser had remained independent, despite that brief flirtation with Andersen. Suddenly, stodginess was cool again. The big firms were perceived as either corrupt or incompetent—and certainly not interested in helping the common man save a few bucks. Wiley sold off the Ernst & Young guide in late 2003, and has since marketed the Lasser books as reliable, honest, and untainted by the stink of scandal. The Lasser Institute, as Wiley publisher Joan O’Neil puts it, “doesn’t do anyone’s corporate taxes.”
The Lasser guides may have recaptured their No. 1 status, but the present day is nothing like the salad days. Sales are still way off their 1980s peaks—this year’s print run is less than a fifth of what it was 20 years ago. Software like TurboTax and TaxCut is automating the preparation process, and using the programs is often easier than skimming through 800 pages of arcane examples on fishing-boat deductions. J.K Lasser and his institute have fended off challenges from shady cousins and corporate monoliths alike, but in the computer, they may have finally met their match.