Accounting Peril : Living Gets Written Off at Tax Time
Wayne Otchis is an easygoing guy who likes fishing and family life, but by now he has entered a state of accelerated depreciation. Starting at 4 a.m. and finishing most nights 16 hours later, Otchis has worked 90 straight days to single-handedly prepare 1,100 tax returns by the time today’s filing deadline passes.
He will gross more than $165,000 for 12 weeks’ work, and then, the annual rite concluded, he’ll go fishing.
Accountants like Otchis work themselves into a pinstriped frenzy during the three months beginning in mid-January to meet the annual deadline for individual income tax returns. Seventy-hour weeks, marital stress and disrupted jogging schedules are endemic in a period that can yield 25%, 35% or even, in Otchis’ case, 95% of a small accounting firm’s income.
Test of Survival
“It’s the fate of this profession,” said Dwight V. Call, a Van Nuys accountant.
But tonight the ordeal is over, and accountants everywhere are rejoicing. Some will collapse in exhausted relief, others will revel at after-tax parties, and still others will go on vacation. Accountants will rejoin their families, resume running, reading and stamp collecting, and generally congratulate themselves for having survived another of the annual endurance tests that try the spirits of tax preparers.
The rigors of tax season are legend in the world of accountants, who are required both to master the Talmudic complexities of America’s tax laws and withstand 12- and 14-hour days for a quarter of every year.
Most tax preparers work overtime during tax season to finish the roughly 40 million returns they do annually, but few seem to match the intensity of the certified public accountants, who tend to do the most complicated returns. R. Michael Shaw, Western regional tax director for the Coopers & Lybrand accounting firm in Los Angeles, said that in early April his staffers “talk in unintelligible sentences, and they walk around like zombies.”
Murray Saylor, tax director for the Atlanta office of the Touche Ross accounting firm, was so busy that by Friday he still hadn’t done his own taxes. “I’m still looking for deductions,” he said.
Accountants describe the experience as one of total immersion.
“There is no other life except working and sleeping,” lamented Gary Iskowitz, a former Internal Revenue Service regional audit chief now in private practice in Century City.
Abe Goldstein, a 62-year-old Chicago CPA, takes Saturdays off for religious reasons but goes to work at nightfall and stays until 2 a.m. to make up for it. Besides struggling with the IRS, he struggles with fat: Goldstein says tax season is the only time of year he fails to swim a mile every day.
Practitioners like Otchis, who walks around the block twice a day to preserve his sanity, are extreme cases. They live and breathe taxes now so they can goof off the rest of the year.
“If you asked me if Eisenhower was still President, I couldn’t tell you,” said Otchis, who practices in Reseda. “It’s tax-season tunnel vision.”
Afterward, Otchis takes it easy, with long vacations and 20-hour work weeks, most of it unprofitably spent answering clients’ questions and pursuing unpaid bills.
Later this month, he’ll join fellow CPA Steven Honeyman for the opening of trout season in the Sierra Nevada. Honeyman, who practices in Santa Monica, works only two days a week most of the year, but he pursues a tax-season regimen of 16-hour days, seven days a week, until deadline.
Honeyman and Otchis aren’t the only practitioners who head for the hills. April 15 triggers an exodus of accountants away from the major cities and into the countryside. In Los Angeles, it marks the beginning of a desert trek sending flocks of accountants to Palm Springs.
Maybe Too Much Work
Critics, including some CPAs, say accountants work too much during tax season. Christopher Bourlier, the western San Gabriel Valley district manager for H & R Block, the nation’s largest tax preparer, generally won’t let his employees work seven days in a row before the last week of the season. Without time off, he says, their work suffers.
“The mind can only absorb what the bottom can stand,” he said.
A few accountants, like New York CPA Richard Stevens, actually seem to enjoy the tax time marathon. “He loves it!” said Helen Weiss, his secretary. “He thrives on it!”
Some say it is a little easier for veterans.
“I’m 43,” said Melvin Crosby, a Hollywood CPA who claims to work 100 hours a week. “I’m really in my prime now. When I was 22 it was worse.”
Weiss, meanwhile, said she can’t wait for midnight, and most accountants seem to feel the same way.
Can Be Stressful
“It’s a very stressful time for a family,” said Marilyn Ruman, an Encino psychologist who advises accountants and other professionals on stress management. “People in relationships for long periods of time get accustomed, but in new relationships, it’s sometimes very difficult.”
Woodland Hills CPA Michael Blue, for example, said the long hours contributed to the demise of his first marriage. He even organized a tax-season encounter group for divorced CPAs several years back, but it stopped meeting because most members remarried or got accustomed to single life.
“There was a common denominator,” he said. “The wife feels the husband’s cheating on her in giving all his time and devotion to his clients rather than to the family. When he comes home, he’s grouchy and miserable.”
Ruman said accountants tend to be compulsive people who enjoy their work and like carrying tasks to completion, but they often risk severe stress by taking on too much, a typically compulsive characteristic.
She says stress is handled best by people who feel in control, so tax season is often harder on a young accountant in a big firm than on an older practitioner running his own shop. She advises exercise, regular meals and vacations when the season is over. She also urges accountants to set reasonable limits on their workloads and avoid annoyances like changing apartments or buying new cars during the season.
Ruman said female accountants often have special problems. Sandra Decker, a Sherman Oaks CPA and mother of 20-month-old quadruplets, thought a nanny just wouldn’t be enough during tax season. So she had her parents fly in from Houston to take care of the children.
“I don’t get to see my children this time of year,” she said. But she added that the 70-hour weeks aren’t nearly as tough as “being a mommy. That’s a lot harder work.”
Just how many accountants work on individual tax returns is hard to say. The federal Bureau of Labor Statistics says there are 1.3 million accountants and auditors, about a quarter of whom are believed to be CPAs. But many work for corporations, and the IRS has no way of knowing whether a return done by a third party was prepared by an accountant or an undertaker.
Figures on how many Americans use accountants at tax season also are scarce, but the IRS says 41.2% of its returns had paid preparers of all types last year, up slightly in the last few years. Overall, 100 million returns were sent in last year, the IRS said, and 103 million are expected this year.
The biggest beneficiaries from tax season are the smaller practitioners. “Big Eight” firms, as the industry leaders are known, derive a much smaller share of their income during the period, even though taxes are vital to their practice.
Profitable Time of Year
Businesses such as H & R Block, which swells from 700 employees to 40,000 in tax season, get most of their revenue from January through April. H & R Block earned $55.5 million on sales of $493 million in the fiscal year ended last April 30.
Most accountants accept their fate with resignation, but some are taking steps to reduce the last-minute crush. Most use large computer services to take some of the drudgery out of tax preparation, and many hire accounting students or temporary bookkeepers to help out.
Irwin Winkler, a City of Industry CPA, wrote all of his clients this year to offer a 10% discount to any who came in before Feb. 15.
“We had a lot of people who normally would procrastinate,” he said. “But I think it even turned out to be something of a marketing tool.”
Personal Life Affected
Like most accountants, Winkler finds his personal life seriously curtailed during tax season. An avid bicyclist, he says he can barely do any riding before April 15.
Many accountants make an ironclad rule of exercising at least once a week during tax season, usually with other accountants and often at the crack of dawn.
“There’s a group of us, we get up at 5 a.m. every Friday and we play a quick nine holes,” said Michael Witte, an associate with Arthur Young & Co. in Woodland Hills. “Nothing stops us.”
Family life and physical fitness aren’t the only things that suffer. Honeyman, for example, owns thoroughbred racehorses, but during tax season he leaves them completely in the hands of his trainer.
Joseph H. Brown, a Glendale CPA, made the mistake of marrying 35 years ago on April 7. Then he became an accountant and found his anniversaries competing with his clients’ demands.
Thanks to the ever-increasing complexity of the tax laws, the Browns are likely to find their anniversaries harried for some time to come. Experts say the government continually creates work for the profession.
“Every time Congress mentions tax reform, accountants salivate,” said Arthur Bowman, editor of the Public Accounting Report, a monthly industry newsletter.
Despite their stodgy image, many accountants are ready to break loose on the night they’ve all been waiting for. Many large firms throw parties. Coopers & Lybrand will hold a bash at the Jonathan Club on the Santa Monica beachfront, where CPAs will take off their green eyeshades and dance to music chosen by disc jockeys from KIIS-FM. Ernst & Whinney plans a giant celebration at El Cholo, a Mexican restaurant on Western Avenue.
Off to Palm Springs
After the party, Rohn Grazer will head for Palm Springs. The 29-year-old associate at Ernst & Whinney has been working from 7 a.m. to 10 p.m. six days a week, slacking off only on Sundays, when he worked only eight hours. He said many of his colleagues have similar plans vacation plans for Wednesday.
“Everyone’s basically dead by then,” he said.
But others say they can’t really get away until May, because payroll tax returns, property tax affidavits and many audits are due for business clients. Said Call: “April is a nightmare month.”
It is a particular nightmare for Witte, a 31-year-old accountant who sounds as if he hasn’t slept in days. He will get some time off after today, but he must use it to cram for his CPA exam in May.