The Taoist service for the dead is easiest to understand if the governing metaphor is taken literally, because the tradition takes it literally. The other world is an administration. It keeps records, it has jurisdictions and ranks, it holds people pending the resolution of their files, and it responds to correctly drafted documents submitted by someone with standing to submit them. The Taoist priest has that standing by ordination, which registers him with the same bureaucracy, and the liturgy he performs is in large part the drafting, reading and burning of memorials addressed upward.
What the family is buying is therefore a legal service as much as a religious one. The documents name the dead person, state their case, ask for the cancellation of the debts and offences recorded against them, and request their release and advancement. Burning is the transmission method: paper goes up as smoke and arrives as a filed document, and the same logic covers the money, houses, clothing and servants sent in paper form for the dead person's use.
This is a different transaction from the Buddhist one, and Chinese families frequently commission both. The Buddhist funeral generates merit by chanting and by giving to the sangha, and dedicates it to the dead. The Taoist service petitions an authority to act. The two coexist without much friction, priests of both are engaged for the same funeral in many regions, and no one involved regards this as inconsistent.