A Taxing Time of Year

“And it came to pass in those days, that there went out a decree from Uncle Sam, that all the nation should be taxed…And all went to be taxed, every one into his own living room, or accountant’s office, or TurboTax program.”

Luke 2:1 and 3 with italics indicating words modernized for today’s reader!!

The National Taxpayers Union (who is a member of this union?!) projects that it takes the average American nearly 26 hours to gather, organize, complete, and file their tax return. For an accountant this number of hours is staggering. I think I spent less than 45 minutes preparing my own tax return and probably less than that for each of the returns of my siblings and parents (Of course, that may explain why my parents’ return has been selected for IRS review for the past two years!!!) If you are one of these recipients of professional pro bono work then I actually slaved away for hours.

I readily acknowledge that my education, 11 years of professional experience, and the all important three letter CPA after my name on my business card make it quite simple to fill out an IRS form without going cross-eyed or swearing after reading the instructions for what number to insert in a particular box. Is it really any surprise that people resort to such odd methods of preparing their tax return as exhibited here:

Unfortunately the tax forms aren’t that easy. At least in completing a Sudoku puzzle there is only one correct answer. With your taxes there is no correct answer because the only correct answer to a person preparing their tax return is a refund. Am I right? Who wants to complete their tax return and find out that they owe Uncle Sam more money? Certainly not me. If I were to owe on my tax return I would try to find something else to reduce my tax bill so that it goes away. Would you like to say this to the IRS?

I don’t have an answer to this taxing situation other than to say that simplification of the tax law is needed, but unlikely.

Tax preparation and compliance is big business. The federal government’s own accountants, the Government Accountability Office (GAO), think Americans pay at least $250 billion annually to tax preparers to file all sorts of tax returns.

Have you seen the tax law in published form? I have. I can remember having to purchase the tax law for one of my tax research classes back in 1995. The tax law was two volumes. It was several thousand pages of very small type. I don’t know the exact number and it looks like politicians don’t either (see this link). All anyone needs to know is that no one understands it all and I am not so sure that it was ever intended to be understood.


So with the tax deadline behind you (unless of course you filed Form 4868 Application for Automatic Extension of time to file U.S. Individual Tax Return) rest assured that it isn’t going to get any less taxing in terms of time or money next year.

Lack of Communication

This crazy, mixed up world that we live in has me a bit concerned. Now I will be the first to admit that I am not the most talkative, expressive person on this planet, but I will open my mouth.

You have all heard the one about the extroverted accountant right? He’s the one who looks at the other person’s shoes when talking instead of his own!! (Roll laugh track)

I am talking about the prevalence of email and other nonverbal forms of communication.

A few disclaimers about my use of such communication methods:

1. I regularly use email. I am not an email junky. I prefer to pick up the phone, go to a coworkers’ workspace, or make a visit to a client than shooting off an email. Email can become such a distraction that you don’t get work done. I try to limit the number of times a day I respond to email simply so I can focus on what I am current working on. In my line of work clients pay for my time and at my billing rate they deserve dedication and focus. I certainly wouldn’t pay my billing rate if I knew how often my coworkers were ‘multi-tasking’ while on my account.

2. I Instant Message (IM) at work and at home, but I do not use it to IM friends and family as a replacement for speaking to them in person or on the phone. It is an easy way to say hello to my sweetheart while at work and not tie up a phone line. Lately my ten-year old son has taken to IM’ing me during his computer time. It is quite entertaining to read his SLOWLY typed little messages.

At home our IM program is our link to family spread far and wide. We regularly webcam my kids’ grandparents and cousins. When they only see each other once a year, or less in many cases, this is the only way for my kids to have a relationship with these cousins that they hear about or see photos posted on websites.

3. I have a cell phone that is capable of texting, but in the five years of having a text-capable cell phone I have possibly sent 10 texts and received the same number. Last year when my office changed cell providers I was given the opportunity to get a Palm Treo or “Crackberry” to enable me to be more accessible to clients. I politely declined this opportunity. I am not as hip and young as I once was and as such will never understand the constant need of the next generation to type messages on a number pad. I guess I just don’t have that much to say.

4. I love music but do not wear earphones at the office. I have a CD boombox (GASP) with a remote control that I turn on when I want and always turn off when someone enters my office to speak to me. I have no plans of upgrading to an ipod speaker sytem.

5. I have a blog, but as you can tell I don’t use it as my sole source of communication with the outside world. It is just my way of having a larger voice—not that anyone is listening.

So with those disclaimers I wish to now fret about the inability to communicate rampant amongst my younger coworkers.

How often do you receive emails from coworkers who would rather sit at their desks (less than 50 feet away) and send an email that obviously took longer to formulate and type than to walk to your office and use their vocal chords?

Here is a classic example. This week I gave a project to a coworker. The project is not complicated, but it does involve some interaction with me since I have worked on this project for a number of years. While I try to pass on the experience and knowledge I have about a project inevitably there are some details about the client that just reside in my head due to my tenure as their accountant. Anyway, I received an email from the person to whom I delegated this project informing me that they had finished several items and had a couple of questions. The email then said they would come see me when they were ready to go over the questions.

Hours later, after having walked past this person’s desk on several occasions, I stopped and asked this person whether they would like discuss the questions. This person politely deferred until later because they were in the middle of something else. That was Thursday afternoon. I didn’t hear from them the rest of the day Thursday nor did this person come to see me on Friday. So now I don’t know what the questions are nor do I have any idea the status of the project.

How often have you received an email addressed to ‘All’ that clearly didn’t apply to you? I especially hate these emails when no thought was given. I am a salaried employee who is paid once a month. Why do I have to receive the email reminding me to fill out my time sheet in the middle of the month that only applies to hourly employees? Just because it is easy for those who aren’t involved to delete an email doesn’t justify being that inconsiderate and lazy. Would you walk around the office with a bullhorn announcing the same thing you sent in an email when it only applied to 10 percent of the workforce?

Our office isn’t progressive enough to allow IM’ing. Our IT guy says it takes up too much network bandwidth. I can’t believe that an IM program could be any worse than the constant viewing of YouTube videos that come attached to email forwards from near and far. One day perhaps that IM’ing will replace an intercom call to a coworker on another floor of the building.

How often do you find your coworkers with earbuds in their ears so that they can’t tell that someone has entered their workspace? They always act so put out when they have to remove their earbuds to talk to you. I understand the need for music to zone out to, just don’t give me the “why did you have to bother me” look when I come to discuss something.

Humans are social creatures and isolation only breeds insanity. So please get out of your chair and walk the halls instead of sitting stone-faced and type emails or tap out text messages all while rocking out to the tunes filling only your ears.

Paying Your Fair Share

Taxes are the bane of our society. Ask anyone and they will tell you they pay too much. Ask them who isn’t paying their fair share and you receive a myriad of responses ranging from the astute to the downright ridiculous. Somehow each of us believes that we are bearing an unequal burden compared to the others in our society. The natural byproduct of this thought is—how can I game the system so I only pay what I rightfully believe I should be paying (i.e. very little or nothing). We are obsessed with figuring out a way to keep Uncle Sam from screwing us.

We have become a country of people who believe they are entitled to everything, but shouldn’t have to pay for any of it. Everyone wants to make money, but they don't want to give the government one cent. We believe we have worked too hard to have the government “steal” our hard-earned cash. This comic tends to broadcast this sentiment; here is a prime example:

Being a CPA, I encounter this attitude all too often as I meet with clients. Clients want your advice on how to make their businesses more profitable with the caveat that none of those additional profits should be taxed. Or worse, clients want to be advised on additional business deductions that will benefit them personally. This leads many small business owners to purchase company-owned vehicles. These vehicles tend to be driven more often than not by their spouse or children on a regular basis; yet all the gas, insurance, and maintenance costs get paid by the business. When it comes time to discuss the personal use of the vehicle -- "it is used 100 percent for business purposes". WHATEVER.

For a wage earner like myself (salaried--so overtime is on me), I find these attitudes and practices appalling. The implication is that Mr. Business Owner works harder than you or I. By “working harder” Mr. Business Owner shouldn't have to pay taxes to the extent that you or I do.

I know enough of these business owners to know that most of them make a lot of money thanks to the hard work and dedication of their employees. DISCLOSURE: This includes my own employer--I know I am not paid (including all possible benefits) on an hourly basis anything near the amount of my hourly billing rate. It isn't Joe Schmoe in the factory or cubicle who is out on the golf course during business hours cursing his putter; but rather Mr. Business Owner out enjoying the "fruits of his labors".

Personally and professionally, I avoid preparing tax returns and all things related to taxes like most humans avoid a trip to the dentist. The reason for this is because I find it distasteful to spend my time trying to figure out tax loopholes. I realize these loopholes are legitimate, but they wouldn’t be loopholes if someone didn’t spend the time to figure out a way to get around the wording of the tax code. The tax code is thousands of pages long for the simple reason that it must be constantly revised to plug the loopholes.

So just pay your taxes and be grateful you live in a country that allows you so many freedoms; including the freedom to try and pay less in taxes than was originally intended. Be willing to pay taxes for the ability to move freely about this great country, to pay taxes for those brave souls defending you around the world who allow you to not fear a terrorist attack in your backyard, to pay taxes for the ability to complain about the pork in our federal government, and all the other wonderful things that our tax dollars pay for.

I love this country and the precepts upon which it was organized. The institution of America is perfect while Americans are not. I vow to pay my fair share. But remember, dear reader, I too pay far more than I should because YOU aren’t paying your fair share!

The ART of Accounting

Did you know that accounting is more of an art than a science? I have a bachelor of science degree (and a master's degree) in accounting, but after 9 years in public accounting I know that it truly ought to be a bachelor of arts degree.

There is the too-oft told joke:

CEO to the CFO in the CFO's office: "What is 2 plus 2?"

The CFO gets up from his desk and closes the door before replying "What do you want 2 plus 2 to be?"

I can't begin to tally the number of times clients have wanted the numbers on their financial statements to say one thing (i.e. very profitable) and the numbers on the tax return to say the exact opposite (i.e. "Leave me alone I don't have any money to pay taxes").

My response, always made tactfully, is that you can't have your cake and eat it too. That is another blog for another day.

BEAUTY IS IN THE EYE OF THE BEHOLDER

Just the other day one of my coworkers came to me looking for help. He was working on the financial statements for a government entity. One of their main functions is to provide housing assistance for low-income households. They write checks to landlords and get reimbursed from the federal government for what they spent and an administrative fee. The financial statements had on them as their main expense "Welfare" and then X million dollars. This coworker came to me and said the client didn't like the word "Welfare" and wanted us to do something about it.

So accountant that I am, my first response was simply..."isn't that what it is?" Consternation appeared on my coworker's face. OK, let me go grab my thesaurus and find a synonym for "welfare"! NOT REALLY, but what am I supposed to do. Thinking quickly I said let's change the expense to "Housing assistance". Based on the fact that I haven't heard anything from the client or coworker, I assume this more palatable and politically-correct description of what they did was acceptable to the client.

A ROSE BY ANY OTHER NAME...

Another client decided to take some of their company's (ME ME ME, Inc.) money and invest it in a new company (I M RISKY, Corp.) that will provide products and services to their company (ME ME ME, Inc.)--if this new company (I M RISKY, Corp.) doesn't crash and burn. The best part of all of this was that the business owners were getting a percentage of ownership in I M RISKY, Corp. for what money "they" invested. They didn't invest their money, but rather ME ME ME, Inc.'s money!

So now they want me to call the money spent by ME ME ME, Inc. a "deposit". Their contention, of course, is that ME ME ME, Inc. will some day get products and services from I M RISKY, Corp. at no charge until the "deposit" is used up. Then I M RISKY, Corp. will start charging ME ME ME, Inc. for its products and services. Have I lost you yet?

What do you call a deposit? A deposit is something you get back if you do or don't do certain things. For example, if you don't trash the apartment you're renting you get your deposit back at the end of the lease. In Maine you get 5 cents back for returning plastic bottles. Somehow they charged you a nickel extra and you only get it back when you return the empty bottle. That was some Seinfeld episode with Kramer and Newman.

A deposit is not ME ME ME, Inc.'s money invested on behalf of the company's owners in I M RISKY, Corp.!!! Why does this have to be a "deposit" on ME ME ME, Inc.'s financial statements? Well because ME ME ME, Inc. had a bad year and anything to paint a better picture to the bank is worth exploring.

Well I had better get back to work...just got a call from a client who wants to go on a cruise and call it a business expense. Time to break out my "art supplies"--spreadsheets and mechanical pencils--and begin to create a masterpiece from the simple canvas of an IRS tax form!

Rembrandt, Monet, Van Gogh...you've got nothing on me! Maybe that's why accountants have to sign people's tax returns. Why not? Don't most artists sign their work!

Maybe I will join the Screen Actors Guild or even worse the Democratic Party! Aren't those requirements for artists like myself?