Taxing Struggles
The last week of income tax season was a quiet one for Scott Feinstein, as placid and splendid as the view of the San Gabriel Mountains from his eighth-floor corner office in Encino’s City National Building.
“I’ve had only a couple of appointments this week,” said Feinstein, a CPA and MBA who manages money and prepares tax returns for high earners in the harrowing, ultra-competitive entertainment industry. “People know if they haven’t gotten to their CPA by April 10, he’s probably not going to get the tax return out in time anyway.”
Several miles and a couple of worlds away, in the office of Northridge tax preparer Mirella Horta and in a seasonal H & R Block storefront in Van Nuys, the week bore the same calendar dates but little other resemblance to Feinstein’s.
Busy all week with her mostly low-income Latino clientele at Raymund’s Jr. Tax Service, Horta was still hard at it Saturday morning, flogging the return of a 33-year-old construction worker. Other clients sat in a waiting area while music from a Spanish-language radio station bubbled from a boombox on the floor, and a burly black cockroach inched across the white ceiling of the tidy travel/insurance/tax/notary-public service on Parthenia Street.
At the H & R Block office, behind a Shell service station at Balboa Boulevard and Vanowen Street, supervisor Charlotte Hoffman paused before launching into a full day of appointments, and surveyed the week past. The office had been opening at 8 each morning. The night before, Hoffman hadn’t been able to lock up till 10:30. “It’s definitely been crunch time,” she said.
In large part, Feinstein and Horta serve the inhabitants of economic jungles where struggle--for fabulous lifestyles in the one case, and simple survival in the other--is the rule. Hoffman plies the grassy flatlands between, where a more common range of taxpayers dwells. At this time of year, the workday realities of the three are a study in comparative cultures of tax preparation.
The 42-year-old Feinstein, tall, trim, goateed and effusive, is sole owner of Feinstein & Shorr Accountancy Corp. His nine-employee company specializes in managing the finances of film directors, producers, editors and production designers, as well as television commercial and music video directors.
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His clients’ average gross income is between $400,000 and $700,000 a year, “but we have several clients who make well over a million, and more,” Feinstein said. “They wouldn’t be with me if they weren’t pretty successful.”
Feinstein’s office was calm facing Tuesday’s filing deadline because he and his associates began scheduling clients for consultations in January.
“We do an awful lot of tax projections throughout the year,” he said. “For our clients, there should be no surprises.”
The financial affairs of many of his best clients are so familiar to him that he can do their taxes himself. “I don’t need anything from a client. I’ve got it all here, and all computerized. It takes a couple of hours, typically. I just send it to them in an envelope and tell them to sign it and mail it,” he said.
Much about his client’s affairs is unusual. The numbers involved are gigantic. Many clients are incorporated, and their corporations pay them salaries and also pay the government hefty payroll taxes on those salaries. “They’re seeing tax checks going out every single month that are more than the average person makes in a year,” Feinstein said.
Similarly, he has prepared returns that involve refunds of as much as $40,000. His own services--which can include handling investments, managing bank accounts and negotiating contracts--cost clients between $500 and several thousand dollars a month.
Immersed in such numbers, he said, it’s easy to lose perspective. “You forget that 50, 60, 70 thousand dollars is what a well-compensated person in the general world makes. You totally forget that when you’re used to seeing W-2s for $300,000 and $400,000.”
Yet, high-earning clients exhibit much the same behaviors as many of the more typical earners at tax time. They sweat April 15, he said, because if their spending has been out of control, or tax projections have been off, they sometimes face huge tax liability.
The only unpleasantness Feinstein faces at tax time are the inevitable phone calls to tax-owing clients notifying them that the time has to come pay the piper. “I lean back and wait for them to yell,” he said. “They shouldn’t be surprised by it, but that doesn’t mean they’re happy with it. They vent at the system: ‘You mean I paid $300,000 in taxes and I still owe?’ I hear a lot of venting at the system.”
In contrast, the sound of taxpayers reacting to the bottom line at Raymund’s Jr. Tax Service is typically one of sweet concordance. This is because 85% of Horta’s clients get refunds.
Consider the construction worker, a man clad in red baseball cap, T-shirt, black jeans and pale construction boots, whose return Horta completed Saturday morning. A father of two, he earned $23,000 in 1996, and qualified for a refund of $1,080.
That, however, was less than half the $2,500 refund Horta’s clients receive on average.
“Most of our people get the earned-income credit,” Horta explained, in reference to the benefit to low-income wage earners often known simply as EIC. “This year with the EIC, if you have two kids and make between $9,000 and $12,000, you get $3,500--free money.”
Horta, a large-eyed woman of 25 with bright red nails, runs the tax service with her sister, Leticia, who is 26. The service is situated in a small shopping center where the women’s father owns a restaurant and clothing store. The family enterprises draw a significant amount of business from the 466 apartments of the Park Parthenia complex across the street.
Four of every five of her clients require only the simple 1040 form that does not involve itemization of deductions. To complete the form, the Horta sisters charge between $30 and $40.
They have the work down to a science. “It takes nine to 12 minutes to do the form, do the envelope and have them sign,” Horta said. “I’ve timed myself, that’s how I know.”
Horta estimated that 10% of her clients are illegal immigrants who are still expected to pay the Internal Revenue Service, regardless of residency status.
“We tell everybody to file,” she said. “We tell them to file because if the time comes that you file for citizenship, you have to have filed your taxes every year.”
As opposed to the sophistication of Feinstein & Shorr, and the family-owned, neighborhood-specificity of Raymund’s Jr., the H & R Block office in Van Nuys is the epitome of the cookie-cutter, mass-production corporate franchise operation.
Everything about the office exudes temporariness, from the lightweight desks the six tax preparers use to the cardboard signs promising quick refunds and free coffee.
The office is one of 11 seasonal storefront offices in H & R Block’s Canoga Park district, which also includes four year-around offices. The office opened Jan. 2, and may remain open till Wednesday or Thursday of this week, depending on how many late filers call for appointments after Tuesday’s official deadline.
The office’s clientele, supervisor Hoffman said, runs the gamut from people earning $100,000 a year to senior citizens who may not even need to file returns. “I don’t think we have what you’d call a ‘typical client,’ ” she said. “Each one is so individual.”
The office’s tax preparers, all trained to various levels in H & R Block-sanctioned classes, are retirees working full time during the tax season, or moonlighters from year-around day jobs. Using proprietary computer software, the preparers can turn out a typical long-form 1040 in about an hour, Hoffman said. She declined to reveal the office’s fees. Other H & R Block offices reported long-form fees begin at about $45, but vary from one location to the next.
Hoffman herself came to the work circuitously. “I’ve done so many jobs throughout my life, mostly dealing with the public,” she said. “I’ve been a truck driver for UPS, an Avon dealer, a Tupperware dealer, a carnival barker and a supervisor in the Los Angeles County welfare department.” She was a grocery checker for 18 years before taking early retirement four years ago, and taking the H & R Block course.
Until the office staff members fold up their computers and steal away into the long night of the non-tax season, Hoffman said, they’ll happily add to their heavy workload.
“Crunch time or not, whenever a client calls up and says they’re ready to come in, we say, ‘Come on down,’ ” Hoffman said. “We’re always ready to fit in another client.”
* VERSE AND TAXES
Poetry lovers profit from tax day. B5
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Last-Minute Returns
Several post offices in Los Angeles County will be open until midnight Tuesday to accommodate last-minute income tax filers. Most locations will have uniformed personnel outside to collect returns. Full window service will be offered as well. Taxpayers should have returns stamped and ready to mail because traffic is expected to be heavy and parking scarce. Post offices in the Los Angeles area that will be open Tuesday until midnight:
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Area Address Downtown Los Angeles 900 N. Alameda St. Airport are 5800 W. Century Blvd. Marina del Rey 13031 Jefferson Blvd. South-Central L.A. Florence and Central avenues Pasadena 600 Lincoln Ave. City of Industry 15421 Gale Ave. Arcadia 41 Wheeler Ave. Burbank 2140 N. Hollywood Way Glendale 313 E. Broadway Long Beach 300 Long Beach Blvd., 2300 Redondo Ave. Van Nuys 15701 Sherman Way Sherman Oaks 14900 Magnolia Blvd. Encino 5805 White Oak Blvd. Studio City 3950 Laurel Canyon Blvd. Canoga Park 8201 Canoga Ave. Woodland Hills 22121 Clarendon St. Northridge 9534 Reseda Blvd. Sylmar 13700 Foothill Blvd. Lancaster 1008 West Ave. J-2
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