A never-ending tax season is the worst nightmare most of us can imagine. Even CPAs might have a hard time warming up to that idea, but that’s what’s happening to some Gulf Coast accountants. They’ve been hit hard by the endless tax season created by Hurricane Katrina.
Tax deadlines were extended after the 2005 storm and taxpayers were allowed to take storm losses back to the previous year. That means CPAs have been working on 2004 and 2005 returns and are now starting to work on 2006 returns. To make matters worse, returns have been complicated with capital losses and by the loss of records by many of those filing. And, that’s not factoring in personal losses the CPAs suffered.
“It is the tax season from hell,” said Chuck Benvenutti of Bay St. Louis. “I still have 300 returns for 2005 to do and normally get 800 to 900 returns for a new year, 2006. I can’t back up anymore. I could use two more CPAs.”
He’s had his own accounting firm for many years in this Coast town that was hit hard by the storm. With his office uninhabitable and employees scattered, he spent September and October of 2005 doing a lot of hand holding with friends and neighbors. There were no billable hours during those months. Some employees did not return and others continue to get offers to leave the area.
“I talked to people all day, but how do you bill your friends and neighbors at a time like that?” he says. “I was just getting to a breather system when Katrina struck.”
Benvenutti copes because there’s no other way. “Bailing out is not an option,” he says. “We all need to self-medicate and keep a sense of humor.”
He was able to get away for two trips in the fall of 2006 to visit Yellowstone National Park and Disney World with family.
But when asked when he’ll get caught up, he laughs loud and long, fearing the IRS will extend the 2005 deadline again even as he begins working on 2006 returns. “We’ve had to look back several years. The law allowed us to go back to 2001 on individual loss but only three years on businesses,” he said. “We can’t back up anymore and that makes it easier for us.”
Cindy Sloan says sometimes it’s hard to remember what year she’s working on. A CPA for 23 years, she’s a partner with the Gulfport firm of Alexander, Van Loon, Sloan, Levens & Favre where 15 to 20 employees are dedicated to working on tax returns.
“For us, it goes back to Hurricane Ivan, and we’re working extra hours and trying to keep clients pushed along,” she said. “Some are having a hard time pulling it together because they lost so much. One season doesn’t end before another one starts.”
She thinks that the strain is being felt somewhat all over the state, and not just with CPAs, because of the shortage of workers, loss of records and procrastination.
“The 2006 returns and the extension for 2005 are due at the same time, and we may not have 2005 complete due to the loss of records,” Sloan said. “A lot of CPAs are working on Saturdays but we choose not to do that.”
Asked if she thinks the IRS will grant another extension for 2005 returns, she answered, “Lord, I hope not. Another extension would just add more problems. If there’s another extension, that would make ‘06 returns due before ‘05 returns.”
Sloan and her fellow employees also use humor and laughter to cope. “We laugh a lot; we have to. I talk to other CPAs and they say that helps them too,” she said. “Also, there’s the satisfaction that we can help people who have lost so much and we love people.”
She says the firm has gained new clients since Katrina, but hopes no more hurricanes come along for a lot of reasons.
Contact MBJ contributing Lynn Lofton at firstname.lastname@example.org.