Smart small businesses and households have a secret weapon on their side to simplify compiling, organizing and managing tax receipts and documents - PaperPort® Deluxe® from ScanSoft®, Inc. (NASDAQ: SSFT), a leader in paper-to-digital solutions. The best-selling paper management software*, PaperPort saves these people valuable time, money and headaches during tax season.

Compile, Organize and Manage Tax Documents

It seems most people's idea of saving receipts and tax documents is to stash them in assorted files, drawers, cabinets, shoeboxes and jacket or pants pockets - if they are kept at all. But with PaperPort, businesses and households save and organize these documents using something many of them already have, a computer and a scanner.

Tax Accountant and Paralegal Kenneth L. Smith uses PaperPort to clear his desk of piles of paper, while his old filing cabinet sits unused, gathering dust. He finds the ability to store receipts, important documents, and bank statements for himself and clients using PaperPort's visual filing system invaluable.

PaperPort is a complete solution for turning paper into digital information on the computer. PaperPort facilitates the scanning, filing, finding and sending of scanned items. Scanning with PaperPort is like photocopying a document onto a computer. Using PaperPort's award-winning optical character recognition (OCR) software, tax documents like receipts, W-2s, 1099s can be accurately scanned and converted into simple-to-use electronic formats like Microsoft Word, a variety of spreadsheets and TIFF - in black and white, and 256 color, or better.

Once scanned, these electronic documents are now easy to organize and file on a computer. PaperPort has a Visual Thumbnails feature that creates convenient visual representations of each file on the desktop. This feature lets users organize files any way they want - such as business expenses, mortgage receipts, medical claim forms and gifts to charity. When retrieving a document, this feature helps users to quickly browse through the thumbnails and double-click to launch the originating application for full-page viewing.

With documents organized, they are easy to manage and access. PaperPort's intelligent search feature makes it simple to find any document. PaperPort files are incredibly easy to share (i.e. corresponding with one's tax preparer or accountant) - via e-mail, fax, printer, and copier. PaperPort Deluxe also works seamlessly with other popular applications like Microsoft Word 2000, Excel 2000, Outlook 2000 and Intuit Quicken 2000 - allowing users to drag and drop scanned images directly into these programs and documents. In the unfortunate event of an audit, there is no need to worry with PaperPort, because the pertinent documents used to prepare past filings are neatly organized electronically and easy to retrieve.

The Gray household in Douglas, Mass., turned to PaperPort after becoming completely frustrated with keeping track of tax documents every year. "I used to have tax receipts piled and filed all over my house, and I'd spend frantic hours trying to assemble them every spring," says Judy Gray. "PaperPort has been a lifesaver by finally organizing our family tax records and making it incredibly easy to locate any receipt or form electronically. Tax season is now a snap."

ScanSoft technology used by the IRS

ScanSoft is no stranger to tax forms. The Internal Revenue Service uses ScanSoft's OmniForm® product as an essential part of the agency's strategy to streamline internal business operations. The IRS is converting and updating half of all IRS forms used each day by its 95,000 plus employees including the over 4,500 internal forms, official documents and auditing letters. This conversion is expected to save the IRS millions of dollars over the next few years, reduce the use of paper, and make agents' jobs simpler and more efficient.

Not Just for Taxes

PaperPort's uses are not limited to tax preparation. Businesses all over the world count on PaperPort to streamline operations and make their companies run more efficiently - from law firms and medical offices, to contractors and realtors. Any process that involves paper can be made more efficient with PaperPort. Administrative tasks such as searching through filing cabinets and photocopying are a thing of the past with PaperPort.

For more information about PaperPort and ScanSoft's products, visit their website at www.scansoft.com.

About ScanSoft, Inc.

Headquartered in Peabody, Mass., with European headquarters in the Netherlands, ScanSoft, Inc. (NASDAQ: SSFT) is the leading developer of paper-to-digital solutions that enable users to leverage the power of their scanners, digital cameras and other electronic devices. ScanSoft's award-winning product line - PaperPort Deluxe, Pagis Pro, TextBridge Pro, OmniPage Pro, OmniPage Pro Scan Suite Plus, OmniForm, eOmniForm, Paper Converter, Kai's PhotoSoap2, Kai's SuperGoo, Kai's PowerShow, PhotoFactory, and numerous software developer's kits - enables users to capture, recognize, edit, manage and share documents and photos electronically by taking advantage of ScanSoft's cutting-edge technology.

ScanSoft has established numerous strategic partnerships with the industry's leading scanner and multifunction vendors to deliver the most comprehensive and cost-effective solutions for its customers. Vendors who have chosen ScanSoft's cutting-edge technologies include Brother, Canon, Epson, Fujitsu, Hewlett-Packard, IBM/Lotus, Mustek, Primax, Sharp, Symantec Corporation, Visioneer, Xerox and others. ScanSoft's leading technologies have been licensed by Microsoft for use in Office 10 and other future products. ScanSoft continues to cultivate and develop strategic partnerships to deliver the most comprehensive and cost-effective solutions for its customers.

ScanSoft software is sold, marketed and supported worldwide through retail, dealer and OEM channels and the Internet, capturing the small to medium size business and corporate markets. There are more than 8 million registered users of ScanSoft products. ScanSoft can be found on the Web at www.scansoft.com.

Trademark reference: ScanSoft, PaperPort, PaperPort Deluxe, Pagis, TextBridge, OmniPage, OmniPage Pro Scan Suite Plus, OmniForm, eOmniForm, Paper Converter, Developer's Kit 2000, PhotoFactory, Kai's PhotoSoap2, Kai's SuperGoo, and Kai's PowerShow are registered trademarks or trademarks of ScanSoft, Inc., in the United States and/or other countries. All other trademarks and trade names are hereby recognized and may be registered to their respective holders.

Except for the historical information contained herein, the matters set forth in this press release, including, but not limited to, statements as to the features, perceived benefits and availability of PaperPort Deluxe, are forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including the market acceptance of PaperPort Deluxe, the impact of competitive products, and other risks detailed from time to time in ScanSoft's SEC reports. ScanSoft disclaims any intent or obligation to update these forward-looking statements.

*According to PC Data Retail Software Report (1998-1999)

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