I do a radio show during tax season. Believe it or not, we have callers that actually remember the shows from the previous years and look forward to the show. When we do this show we take questions over the air and do our best to answer them. I learned over the years that listeners enjoyed hearing war stories as opposed to being read the Internal Revenue Code in a response to a question. Here is a partial list of my war stories. These stories tell how I have helped people in the past and are probably more important in judging how I can help you than reading my resume. I hope you enjoy, and maybe even pick something up from them.
1. The first year I opened my office a new client came in that was an attorney. As I was reviewing his prior return I noticed that he distributed his retirement account to himself and did not take advantage of forward averaging which was available in 1983. When I mentioned this to him, he told me he did not want to burden his wife with future tax liability. When I tried to explain to him that this wouldn’t happen he snapped at me and said he had an IRS card and knew what he was doing, and for me to stay out of it. I waited a few minutes and mentioned it again, and again he yelled at me. A few minutes later I told him he was going to at least listen to me and if after hearing me out he wanted to fire me that was fine, but asked him not to leave the office until I had my say. The bottom line was that forward averaging would not have resulted in a future tax liability and by amending his return, I was able to get him a $7,000 refund. His wife told him, “Don’t you ever question Phil again!”. They both remained clients until their respective deaths.
2. I hired a CPA, I’ll call him Allen, to help me during tax season prepare individual tax returns. Unfortunately, he made mistakes on almost every return he prepared. In comes a client with only three documents: A W-2, a 1099 showing some interest income, and a 1098 that shows Mortgage interest and taxes. This is about as simple as it gets and I figured there is no way he could screw this up. When I reviewed the return, I discovered the client had no business mileage like he had in previous years. I asked the preparer if he noticed the client had thousands of business miles on the previous year’s return. He said he did. I then asked him if he thought the client might have business miles this year. He said he didn’t know, and that the client didn’t tell him he did. After a phone call, it was determined that the client did have enough miles to increase his refund several thousand dollars. I then pointed out to the preparer that the best CPAs are the ones that ask the best questions. I told this story to a friend of mine who owns a firm with 18 professionals. His response was, “Imagine having 18 Allens”. Since that time I have avoided hiring people to prepare returns for me.
3. I have had several people come into me over the years who had not filed returns for several years. In some of these cases they were actually owed refunds. I wish I could say I helped them but I couldn’t. There is a statute of limitations that is a single edged sword wielded by the IRS. If you owe twenty years of back taxes they want it all, if they owe you twenty years of taxes, you can only get three.
4. This was funny. I had a guy come in that was in the construction business. He was a tough looking guy, the kind of guy you would expect to see in a redneck bar. He came in several times over a year and a half, and I explained to him all the back taxes he owed by not filing and he just stared at me. I was scared that at any minute he was going to jump over my desk and beat the crap out of me. Well the years went by and we started talking. During one conversation he explained why he sat there in silence all those months. It turns out he was scared to death of me and what I was telling him.
5. I defended a client in an audit of one of my clients. I found the auditor to be very courteous and professional, but she did challenge the position my client had taken in several areas. I explained our position and supplied documentation to prove our point. At the end of the audit she gave me one of two best compliments I ever received. She said, “You are the most convincing person in your arguments that I have ever worked with”. The second best compliment I received was also from her when several months later she was auditing a business in the same industry as my client, and called to ask my opinion if an item was taxable.
6. I have a client that collects sales tax and pays use tax on fabrication. The client had insisted on preparing their own returns for many years. There was a change in the law that I thought might affect them, so I called and got the copies of the returns. I discovered they had been preparing them wrong so I recalculated the liabilities and applied for a refund of over $40K from the state of Florida. Within six weeks, the state audited the client to make sure they were entitled to the refund. The auditor concluded they were entitled to almost the entire refund. He disallowed only about approximately $350, resulting in almost the entire $40K refund.
7. After preparing an estate income tax return described in the lawyers section (2nd story) I advised one on the beneficiaries to amend his return. After several weeks, I asked how big a refund he got. He told me he took the paperwork to his CPA and was told it was not worth fooling with. I asked him if I could file the amended return and have the refund. He took the paperwork back to his CPA, who filed for a refund close to $3K and apologized profusely.
8. One of my first clients came in and told me how the mother had recently passed away and their was an estate tax liability paid of several hundred thousand dollars. This was quite sad, because with even the most rudimentary planning that estate could have been passed to the beneficiaries with no estate tax liability.
9. I have testified several times in court. The first time I testified the opposing counsel objected to me testifying. The judge allowed me to testify, reserving judgment as to the weight that would be given to my testimony. Two years later I was at my son’s football game. A man came up to me during halftime and introduced himself as the judge from that trial. He proceeded to congratulate me on doing a great job. He also said the opposing attorney never thought I would be allowed to testify, and then added that I would never have a problem testifying in his courtroom again.
10. I was dealing with a very difficult corporate tax issue and called a tax attorney for some help. He said the issue was beyond him, and recommended a CPA that he considered the best person in the area of corporate taxation. I engaged this firm and dealt with the managing partner. After he reviewed my work, he and his partners disagreed with a position I had taken on this return. I came back a few days later and showed him a couple of court cases where the IRS had taken the same position I had (because it helped them generate more tax). In my case this position saved the corporation tax. The partner discussed it with his partners, and when I came back, he said they reversed their position and agreed with me. He also said that they had done many reviews in the past and that this was the first time they reversed their position. He then asked me if I would join their firm as a partner. I declined for two reasons. I am not a person who is comfortable with a large office, and I was told I would have to raise my billing rates to my clients by over 50%. I knew some of my clients would not be able to afford it, and I did not want to lose the relationship I had with them.
11. I have a surgeon as a client. When I first worked for him he had three corporations and two other accountants. His lawyer told him he needed to have just one CPA. I told him his lawyer was right and he needed to choose among us. I told him that he needs to think of a patient he would be operating on. The patient should be choosing a doctor that he thinks has as a priority of helping the patient as opposed to generating income. I told my client to determine which of the three of us are most concerned with helping him as opposed to generating a fee. He said without hesitation that I would be that person and he promptly had me take over the other two businesses.
12. I always strive to present any financial information in a manner that meets standards set by my profession. I have found in some cases I can provide additional information that helps the client achieve their goals. One of my clients is an exempt organization. Each year I present the audited financial statements to the board of directors. These statements include supplementary information that is unique to my statements. I have had many compliments on my presentations over the last twenty-five years, but the two I am most proud of I will mention now. At the conclusion of one presentation, a board member mentioned that he was or has been on many boards and has listened to many presentations such as mine. He then stated this was the best one he had ever heard. At another board meeting, a director, who was a bank officer, stated that I had provided information every loan officer would love to have, but never gets.
This client is a member of an organization that includes hundreds of similar organizations. One time I called the organization about a change I was making and in passing, I mentioned to this person he might remember the financial statements I prepared. He said he sees several hundred a year and there is no way he would remember this client’s statements. I told him mine was the one with the color photo on the front page and the color graphs. Without hesitation, he said, “I remember that one!”.
I hope these stories have been informative about not only what kind of CPA I am, but also what kind of person I am, and what you can expect of me if we get together.