TOP TEN FUNKIEST ACCOUNTING MOMENTS By Peter G. Masullo, CPA December 16, 2000
Accountants have a reputation for being boring. I0080ve become accustomed to being the butt of everyone0080s jokes, such as:
What do accountants use for birth control? Answer: Their personalities!
Perhaps we deserve our reputation. I suppose you have to be a little weird to find the tax law interesting. But it0080s not all tedious number-crunching. Sometimes, we are overcome with excitement in our every day accounting practices, and some of us have even developed a keen sense of humor. To prove it, I have compiled the following list of 10 of the 0080funkiest0080 moments in my career as a tax accountant/attorney. I use the word 0080funk0080 because not all of the following are humorous. Some are embarrassing moments, and some are just plain weird. All are true stories, illustrating the old cliche about fact being stranger than fiction.
Scary Tax Moments
*The scariest tax moment of all time was when I was accused of harassing two IRS agents by use of what they called 0080abusive language.0080 In truth, I displayed the patience of a saint by exercising restraint. The real scary part was their abuse of power. I reiterate the fact that I said nothing abusive. I merely pointed to the door as I suggested their souls belonged in the company of Lucifer. The full story of this escapade appeared in the first issue of this newsletter. Let me know if you would like a copy.
*Many years ago, during the busiest part of tax season, I returned to my office in the early evening to find a stack of telephone messages. Three of them were from Mr. Robinson. It was late, and I was tired, so I put off the messages until the next day.
I don0080t remember exactly what I was working on, but I recall the next morning as being very hectic. By mid-morning, I had not yet returned Mr. Robinson0080s calls. My secretary at the time, Patty B. (one of the best and nicest people I have ever had the pleasure of working with) interrupted me in an abrupt manner, 0080Mr. Robinson is here to see you now.0080 I exclaimed, 0080I can0080t see Mr. Robinson now!0080 I started to complain and explain that I was under pressure and Mr. Robinson would just have to wait. In a voice unlike her usual soft-spoken tone, Patty again cut me off, 0080I think you better see Mr. Robinson right now!0080 I sensed trouble and immediately jumped away from my desk to greet Mr. Robinson.
I found him in the front office. He was thumbing through documents in his file with his left hand. In his right hand was a sawed-off shotgun. He greeted me with a smile and assured me the gun I was staring at was not meant to scare anyone. I couldn0080t imagine what else he could possibly be doing with this illegal weapon. Surely, he wasn0080t going hunting in the middle of NYC. So I wisely decided to show Mr. Robinson the utmost degree of respect.
Somehow, I managed to keep my cool on the outside, although I was trembling on the inside. I calmly explained the reason his tax returns were not completed was because he had not provided all of his W2 forms. With this understanding, Mr. Robinson left in peace. I also left because I had to change my underwear. Since then, I return all of my calls as promptly as I can.
Stupid Employee Moments
*In the old days, the most advanced piece of technology in my office was a color TV set. I liked to watch the news when working late, but I used it mainly to entertain my young daughters on their way to and from school. One morning, I returned to my office unexpectedly. There was my trusted assistant, Joe, lounging in my chair with his feet on my desk. He was so preoccupied with the TV that he didn0080t even notice my entry. I didn0080t know whether to laugh or cry when I heard him exclaim, 0080OOH! I love Fred duh Flintstone!0080
*After the incident with the 0080Flintstones, 0080 I decided I should be more selective in my hiring practices. Thus, I devised a form letter to test an applicant0080s dictation & typing skills. One applicant interpreted the heading, which was supposed to read 0080Mr./ Ms., 0080 as 0080Mr. Slashmiss.0080 To make matters worse, this applicant was angry with me because she thought this was a trick question.
*Jenise was my secretary for about a year and was thoroughly familiar with my clients and office procedures. To my knowledge, she had never worked in a doctor0080s office. One day, she must have been watching something on TV, or smoking something, or both. A young, attractive client came into the office to have her taxes done. Jenise told her, 0080Take your clothes off and have a seat in the waiting room. Mr. Masullo will be right with you.0080
Foot In Mouth Disease
*On March 7, 2000, I took a call from a gentleman in Springfield, MO who was very concerned because he hadn0080t filed his tax returns for the past 3 years. There is usually a reason why people fall behind in their taxes, so my first advice was to inform him about relief from penalties in the case of extreme hardship. He told me he suffered from clinical depression. In my exuberance I exclaimed, 0080That0080s great!0080
I immediately recognized my mistake. After a short pause, and a bit of stuttering I explained, 0080No, that0080s not really great that you suffer from depression. What I meant to say was that you have a great case for reduction of the penalties.0080 He understood and we both laughed.
*At the end of a lengthy session of setting up the books for a promising internet start-up company, I was dragged into a meeting with the company0080s management. They hit me with complicated legal and tax questions about agreements that would have taken me a day just to read. I was eager to impress my new clients but I didn0080t want to say anything stupid
TOP TEN FUNKIEST ACCOUNTING MOMENTS By Peter G. Masullo, CPA December 16, 2000 Page 2 of 2
about matters I was not prepared for. I explained, 0080I0080ll be glad to take a look at these agreements. However, right now, it0080s all Greek to me.0080 The young CFO pointed to the other officer sitting across the table and said, 0080He0080s Greek!0080 Again, I stuttered, 0080Oh! Ah! Um!... I meant Chinese!0080 They never called me back for my opinion on the contracts. In fact, I haven0080t heard from them since.
Dumb IRS Moments
*You might think there is nothing funny about falling behind on your taxes. That is usually true, for it can be a painful and nerve-racking experience. However, in order to maintain sanity (we can argue about my level of sanity at another time), it is helpful for me to find amusement in some of the daily situations that others might classify as tedium.
I once agreed to represent a small corporation that hadn0080t filed taxes in five or six years. IRS had just become aware of their existence and was pressing the owner for the back taxes. In those days, I was a bit more timid before IRS. As a newcomer to the field, I was inexperienced and gullible. When I first contacted the IRS agent I expected he would be sympathetic to my client0080s sad story. Instead, I was shocked when he showed no mercy and demanded that I complete all five years0080 returns by the end of the week. I tried to explain this would be an impossible feat. Even if I had all the required information I couldn0080t physically complete all five years within the next couple of days. The agent didn0080t want to hear it. 0080You0080ve had five years! I will not tolerate any further delay!0080 He further blasted, 0080You finish those returns by Friday or I0080ll hit you with a summons and make you finish them!0080 I was dumbfounded. Could he really do that?
For the next two days I labored tirelessly in an attempt to achieve the impossible. I didn0080t mind the work, but I resented not being able to sleep because of the unnecessary worry and pressure. It became clear that an army of accountants could not finish the project on time so I took a break. That0080s when it dawned on me. He can0080t subpoena me. What could I possibly have done to deserve a summons?
The next day, I got up the nerve to confront the agent with this question. I accidentally struck his nerve when I mentioned that I felt 0080harassed.0080 The agent immediately became my best friend. In a completely different tone he explained, 0080That was a misunderstanding. What I said was that you could save me the trouble of serving a subpoena upon the corporation for the production of records if you would be kind enough to give me a time frame for completion of the corporate tax returns...0080
*Another time, in the days before IRS was so organized (sarcasm), I had a client whose return was being audited by Mr. Green from the downtown NYC IRS office. I tried writing to Mr. Green to request a conference. A couple of letters and a couple of months went by but there was no response from IRS. I finally was able to contact Mr. Green by telephone. You0080d know what a difficult task this is if you ever tried to call IRS on the phone. This was especially difficult in the old days. Anyway, Mr. Green agreed to meet with me to discuss my case. Only problem was that his schedule was booked for the next month or so. After that was vacation. Then, after that he had to undergo a training program. I was certain I would forget most of what my case was about by the time our meeting arrived, but I was happy that justice would be served and my client would eventually get a fair hearing.
I had plenty of time to refresh my memory. On the date of our appointment I was sitting in the IRS waiting area for a period that felt like hours. Finally, Mr. Green came out to greet me. He immediately apologized and confessed that he had lost my client0080s case file. I experienced another one of those moments when I didn0080t know whether to laugh or cry. I think at that point I was probably closer to the latter, and with a tear in my eye, I begged him to continue the conference anyway. We could use copies of documents from my files.
He must have seen the tears and felt sorry for me, because he reluctantly agreed to hear me out. The reason for much of the mix-up became clear as soon as I took out the audit report. It was prepared by Charles D. Green. However, I was talking with Charles C. Green. After all these months I was dealing with the wrong Mr. Green. Apparently, the real Mr. Green was transferred to another district.
We never were able to track down the case file, but this story had a happy ending. IRS was even more concerned with this botched up job than I was for my part in it. For whatever reason, we reached an amicable compromise that was very favorable for my client.
*I hope that by now, I0080ve become a little 0080jaded, 0080 but in those early days you could tell me anything and I0080d believe it. Remember the disco scene? I don0080t! I was too busy working, and besides, I don0080t dance. But I had a client who was a waiter in a very upscale Manhattan disco, akin to the infamous 0080Studio 54.0080 He boasted to me about the 0080Rolex0080 watch he was wearing. He claimed that a patron/friend had given it to him the night before as a tip. 0080Wow!0080 I thought to myself. The tips most waiters make in a year are less than the value of that watch. My immediate recommendation was to increase the amount of tip income being reported. Unbeknownst to me, my waiter friend was pushing something other than food, drink, and good times at the uptown disco.
A few weeks later I received a surprise visit from three beautiful, scantily-clad women. Despite my gullible nature, I knew something was up when they started asking personal questions. In my profession, it is not a normal, every day occurrence to be interrogated by attractive women. In fact, I can count the number of times this has happened to me on one finger. In jest, I asked, 0080What are you, some kind of cop or something?0080 The leader replied in the affirmative and showed me her badge and ID. They were Special Agents from the Treasury Department. The leader then assured me, in a jovial, yet stern manner, that she had the wherewithal and weaponry to enforce my cooperation, should that become necessary. My confident 0080rap0080 turned into that familiar stutter. I was blindsided and intimidated by the fact that I was being interrogated as if I were guilty of something. It is unfair when the government uses all three of 0080Charlie0080s Angels0080 to elicit privileged information from ordinary accountants. The fact that they had to sneak up on me like this has left a lasting impact on my psyche. To this day, I cringe and become speechless every time an attractive woman comes into my office. It0080s bad enough being afraid of heights. Now, I have IRS to thank for this unhealthy fear of women.
FREQUENTLY ASKED QUESTIONS
How much is your fee?
This is by far the most frequently asked question by new or potential clients. I like to dispense with this issue at the outset so there are no misunderstandings or surprises later on. Existing tax return clients generally pay the same fee as the prior year (subject to minor inflationary increases). Fees for new clients are set before work begins. Click here for more information about fees.
Am I going to jail?
Stop! This is not very funny! Especially since I hear this same question 10 times a day, year after year.
Seriously: Of course not! None of my clients have ever been charged with criminal tax crimes. One reason is because it is extremely difficult to get a jury to convict someone of crimes against IRS. Also, IRS recognizes it is difficult to pay off a tax lien from a jail cell. Prison time is generally reserved for high profile cases where the guilty party can set an example for the rest of us (such as Wesley Snipes and Leona Helmsley).
Are you busy?
This question is even more annoying than question number 2. It's tax season! WTF do you think?
How long do I have to save copies of my income tax returns?
Forever and ever! You never know when you will be called upon to prove something.
What about the rest of my records, when can I throw them away?
I know I'm compulsive because I hate to throw anything away. Most other accountants will tell you 7 years as a general rule. This might be a safe bet for most old records, but records dealing with the cost of your assets should be kept longer. For example, if you sold your home last year you may need to prove your cost basis. So even if you purchased your home 20 years ago you should still retain records of your cost for at least 4 years after the year of sale.
What are my chances of getting audited?
If you are not in the uppermost tax brackets, don't have any large or unusual loss deductions, and don't operate a cash business your odds of getting audited by IRS are very slim. I would guess less than 1 in 100.
Do I increase my chances of audit by filing an extension?
I don't think so. It is usually what's on the return that causes the audit as opposed to when it is filed.
To the contrary, I once had a client who was audited because she filed her return early. She was anzious for her refund so she filed her return in January. It just so happened that IRS was conducting a training program at that same time. IRS needed a few current year returns for instructional purposes. By the time the students finished learning about her deductions there was no more refund. In fact, she owed a few hundred dollars after the audit. This return probably would not have been audited if it were filed a couple of months later. If you fear an audit, don't give IRS extra time to snag your return. It is better to file when everyone else does, certainly not before April 1.
What if I can't pay my taxes on time?
It is relatively easy to set up a payment agreement online with IRS. You can do it online at the IRS web site for a small fee. It is important to file your returns even if you can't pay because there are separate penalties for failure to pay and failure to file.
Why do I have to efile my tax returns?
Actually, you don't. You can choose to file on paper if you want. But I advise you to "get with the program." Efiling is now the norm. Tax return preparers like me are mandated to file electronically by both IRS and NYS. IRS likes it that way. So why would you want to be the oddball and attract attention to your return by going against the grain and filing on paper?
When do I have to pay gift taxes?
For 2015 the gift tax exemption was $14,000 per person per year. You do not have to file a gift tax return if your gifts of "current property" were less than this amount. If you are married you can join with your spouse for a total gift of up to $28,000 per person per year. There are also exemptions for payments of certain medical and education costs.
Did they really charge you with IRS abuse?
Yes, that is a true story. But I was able to clear my record of those bogus charges on appeal. These days, I am more laid back in my dealings with Goliath. We have come to know and respect each other's strengths and weaknesses.
Peter Masullo, CPA-Attorney at Law Tax return preparation in New York