Where to store TaxCycle files in relationship to the server
We recommend putting the server on the same computer as the tax return files it will index and search.
The reason for this is permissions. The Client Manager runs as a service on the computer where the server is installed.
By default, service runs under the SYSTEM Windows® user account (to allow all users of that computer to use the Client Manager). If it were to try to watch folders that were on a different machine on the network, the SYSTEM user would need permission to access those folders, which are not the default Windows® network permissions.
If this isn't possible, you can work around this by assigning the correct permissions to the Client Manager. To learn how, the Run as a network user help topic.