My Father's AccountantSubmitted by US Wealth Management New Haven on April 10th, 2018
By Thomas Morrone CFP®, CPA
I have written about my father’s gas station business and how I got started in accounting as a result. Before I was involved with the books, the accountant my father used was very involved with the business and seemed to be a fixture in the office. He would occasionally come to the house to review things with my parents and the entire family knew the accountant, let’s call him Doyle. He was a jolly guy with a big belly and bald head. We all liked him, especially my father, and he was trusted explicitly. Maybe you can see where this is headed, and I may have shared this story with some you. It gets juicy.
My father worked hard, long hours to provide for the family. We did not live lavishly but there was always food on the table and we went on family vacations. For me, life was good. One afternoon though, I came from school and my dad was there which was very unusual for him to be home in the middle of the day. When I went inside, I immediately knew something was wrong because mom was crying, and they were both just staring at each other. My father found out that day that he was in trouble with the IRS. This was my very first experience hearing about the IRS. My father then explained, that for an extended period, good ole trusted Doyle was embezzling from my father. This was another first, learning what embezzlement was.
My father had to hire a forensic accounting firm (another first, forensic accountant) to determine the extent of the fraud. Doyle was not paying the payroll taxes for the business or the income taxes for my parents and was instead taking those funds for himself. After all he did all the books, so he had control and it was easy for him to cover it up. Any letters my father received from the IRS, he would put in a folder, unopened, and give them to Doyle the next time he came in. Unbeknownst to my dad, these were letters about being behind on taxes, interest and penalties, liens and all that bad stuff that you think about when you hear stories about the IRS (more firsts). Doyle used his knowledge to take advantage of my father. Again, my father trusted him and there was enough to live on and to support his family, so he was content. My father made good with the IRS over time because the forensic accountant conveyed what had happened and the IRS allowed a payment plan and negotiated the penalties and interest. Doyle was indicted for fraud and embezzlement and over many years he paid my father back every dime he stole. He paid my father every month and it went towards my college costs. That is when tuition was $2,000 per year which is a far cry from what college costs are now.
This story also resonates to my core as a financial planner. I have always and will continue to use my knowledge to help people devise a plan to pursue their life goals and would never consider taking advantage of someone. I will always remember the look on my parents faces that afternoon.
Talk about a life lesson!
Until the Next Tom's Take...