As certified public accountants (CPAs) in South Mississippi continue to rebuild their lives and their practices from the devastation of Hurricane Katrina, they’re also preparing for one of their busiest tax seasons ever.
One of the hardest hit CPAs is John Heath of Gulfport. He lost his home, office and boat. But he hasn’t lost his sense of humor, noting that his 36-foot boat, the Loophole, was recovered by some friends in the salvage business. His home was gutted by 5 1/2 feet of water and there’s nothing but a slab left of his office on 15th Street.
“We lost all our possessions, but we’re making it,” he said. “We’ve moved into a rental property and relocated our office to the Concourse Business Park at the airport.”
Heath, who has been in solo practice for 32 years, has three employees in about half the space they had on 15th Street. Still, he’s pleased to be working and says the space is very nice. “It’s not quite as convenient but we’re back in business and that’s what counts,” he said.
It took about 2 1/2 weeks to find office space and at first most things had to be done manually. Heath hasn’t found anything from his old office including his college diploma and CPA certificate. He and his staff worked off cell phones for the 2 1/2 months it took to get land lines up and running.
“We had no phones, no fax machines, nothing,” he said. “We had to do everything the old fashioned way. We worked off computer files with paper for a while. Everything was hard.”
Heath’s data washed away with the rest of his office, but thanks to the IRS’ matching computer program, a data hard drive recovery system and clients providing the information they could, he has been able to rebuild his records.
Some clients are going out of business and others don’t know what they’ll do. He doesn’t expect to lose many clients and is hearing from many of them, especially tax clients.
“It’s going to be an interesting year,” he says. “We’ll be doing ‘04 and ‘05 tax returns in ‘06. We’ve been given until February 28 to get ‘04 returns in.”
Carrying on, still working
The Mississippi Society of CPAs (MSCPA) has provided assistance for firms needing help in the way of office space, equipment, counseling and seminars. A photo of the foundation of Heath’s former 2,100-square-foot office ran in the group’s monthly newsletter with the caption “Where I used to go to work.”
“It’s like starting over. I’ve had to buy new equipment and everything,” he said, “but I feel blessed to be in a profession that can carry on and still work.”
Marion “Princy” Harrison of Holt and Associates in Laurel was planning to retire to Bay St. Louis and had just made a home there her legal primary residence before Katrina struck. “I’m feeling the victim part of it,” she said. “Hopefully we’ll rebuild the house. If we’ve done it by this time next year, I’ll be happy.”
The office in Laurel had some damage and was closed for a week but suffered nothing major. Active in the MSCPA, she says the society has had an outreach for CPAs, and the state board has eased up on some requirements for this year. “Everyone has helped,” she said.
Chuck Benvenutti of Bay St. Louis says he fared better than some CPAs and worse than some. He lost his office, home and camp in the marsh. Although his office on U.S. 90 has a 25-foot elevation, it had 5 1/2 feet of water outside of it during the storm and 3 1/2 feet managed to get inside. His home was inundated with 9 1/2 feet of water. The day after Katrina passed through, he, family and staff ripped out wet sheetrock and carpet from the office. Now it’s ready to paint and he predicts they’ll be back in it in May. Until then, the office is temporarily located in Diamondhead where the Benvenuttis have bought a home.
“Two of our CPAs relocated after the storm. That’s the toughest part,” he said. “One had been with me for 22 years and the other for 12 years. One will come back, so I’m looking for rental property for her.”
Benvenutti says his day begins at 5:30 a.m. and ends about 8 p.m. “We were pretty much paperless before the storm and had backup tapes that were good quality and could be saved,” he says. “We’ve been able to carry on even though we had a $300,000 loss of business income, equipment and building.”
He too anticipates a very busy tax season. Tax returns that normally took 1 1/2 hours to complete will now require four hours of time.
Almost back to normal
At the office of Alexander, Van Loon, Sloan, Levens & Favre (AVL) in Gulfport, things are almost back to normal. Their location on Three Rivers Road received water from a nearby creek and bayou, putting employees out of work for six weeks. Six employees lost their homes and some were able to work from home while the office was uninhabitable.
“We have touched base with our business clients and they’re still with us,” says partner Jerry Favre. “We haven’t heard from some individual clients — the ones we only see once a year, but we see a lot of work for this year. We’re doing a lot of tax planning.”
During the down time at the office, a client let the CPA firm use space and they were doing payroll within a week. Favre said AVL’s server was fine.
Contact MBJ contributing Lynn Lofton at email@example.com.