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- Written by: Adam S. Fayne, J.D.
The IRS has been asserting foreign bank account (FBAR) and other international compliance penalties (i.e. Forms 5471, 8938, 3520, etc.) outside the Offshore Voluntary Disclosure Initiative (OVDI). At the present time, the OVDI is an indefinite program subject to the advertised terms and conditions. However, not all taxpayers with foreign assets participate in the OVDI and some elect to opt-out of the OVDI after submitting their materials to the IRS through the OVDI process. This article will focus on recent developments when the IRS and the taxpayer disagree on the proposed FBAR penalty, and other international related penalties.
Applicable Penalties Under The Internal Revenue Code
The IRS has the authority to assert international penalties under Internal Revenue Code (IRC) Sections 6038, 6677, and 6679. In addition, IRC Section 6662(j) was recently added to increase the accuracy related penalty from 20% to 40% in those cases where the understatement of tax relates to an “undisclosed foreign financial asset.” This new increased IRC Section 6662(j) penalty applies to those returns filed after March 18, 2010. Some examples of penalties applicable to international compliance requirements are: (this list is not inclusive of all required forms but is a representation of the most common international forms required to be filed by the IRS)
• Form 114a (FBAR) – Report of Foreign Bank Account. There is a $10,000 penalty per non-willful violation. For willful violations the penalty is the greater of $100,000 or 50% of the amount in the account (aggregate total) at the time of the violation. There may be several violations per year depending on the number of accounts, and several years may be subject to the penalty depending on the Statute of Limitations. The IRS issued guidance to limit excessive penalties but this practice is not being followed by all IRS agents.
• Form 5471 - Information Return of U.S. Persons With Respect to Certain Foreign Corporations. There is a $10,000 initial penalty plus an additional $10,000 penalty per 30-day period or fraction thereof, after the IRS has mailed a notice of failure to file such form capped at a total of $50,000. There may be additional penalties if the failure to file was intentional.
• Form 8865 - Return of U.S. Persons With Respect to Certain Foreign Partnerships. There is a $10,000 initial penalty, plus an additional $10,000 penalty per 30-day period or fraction thereof after the IRS has mailed a notice of failure to file such form capped at a total of $50,000. There may be additional penalties if the failure to file was intentional.
• Form 926 - Filing Requirement for U.S. Transferors of Property to a Foreign Corporation (US persons acquiring more than 10% ownership in foreign corporation or transfer of more than $100,000 to a foreign corporation during the tax year). The penalty for failure to file this form is 10% of the fair market value of the property at the time of the exchange/transfer, capped at $100,000 unless the failure was due to intentional disregard. • Form 3520 - Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts. There are a number of penalties that may apply including a penalty of 5% of the amount of a large foreign gift for each month for which the failure continues after the due date capped at 25%, and/or the greater of $10,000 or 35% of the gross reportable amount of any property transferred to a foreign trust or distribution received from a foreign trust. These penalties all continue higher if not cured within a specific time frame.
• Form 3520-A - Annual Information Return of Foreign Trust With a U.S. Owner. The penalty for failing to file this form may be 5% of the gross value of the portion of the trust’s assets treated as owned by the US person, and if the failure continues for more than 90 days after the IRS notifies the taxpayer of his or her failure, the penalty is increased by an additional $10,000 for each 30 day period.
• Form 8938 - Statement of Specified Foreign Financial Assets. There is a $10,000 initial penalty, plus an additional $10,000 penalty per 30-day period or fraction thereof that begins 90 days after the IRS has mailed a notice of failure to file such form capped at a total of $50,000. There may be additional penalties if the failure to file was intentional.
Extension of Statute of Limitations
It is important to note that the Statute of Limitations on assessment under IRC Section 6501(c)(8) is suspended on all items of the taxpayer’s tax return while the above forms go unfiled unless the taxpayer can demonstrate that his or her failure to file is due to reasonable cause. If the taxpayer can demonstrate reasonable cause then the Statute of Limitations is suspended only with respect to items related to the international form.
Disputing International Penalties
As stated in the IRS’s Internal Revenue Manual, most international penalties have post assessment pre-payment appeal rights. These international penalties are not subject to typical deficiency procedures and cannot be litigated in US Tax Court. While it may be possible to pay the penalty and bring a claim for refund, it is more common for the United States to bring a claim against the taxpayer for collection of the penalty and litigate its merits during that process in the US District Court.
The best defense to any assertion of an international penalty is to demonstrate that the taxpayer had “reasonable cause” for his or her failure to file the information return and pay the tax, where applicable. Reasonable cause applies to most of the international penalties – but not all of them. For example, reasonable cause does not apply to penalties after the taxpayer was notified of the requirement to file by the IRS. In no event are examiners instructed to consider reasonable cause until all forms have been filed and the taxpayer is in full compliance.
As of the date of this writing, the author is aware of in excess of 30 cases that have been or are currently being litigated in the courts related to the proposed assessment of international penalties.
Adam Fayne is an attorney with the law firm of Arnstein & Lehr LLP. Prior to private practice, he was an attorney with the Internal Revenue Service Office of Chief Counsel. He has represented many taxpayers nationally and internationally with IRS examinations, IRS appeals, Tax Court, criminal defense, and foreign compliance matters. He may be reached at 312-876-7883 or
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- Written by: Robert E. McKenzie, J.D.
Although the vast majority of Americans file accurate returns and promptly pay their taxes, unfortunately a significant minority of U. S. taxpayers fail to accurately report their income and promptly pay their taxes. IRS studies show that approximately 83% of taxpayers are fully compliant while 17% fail to accurately report their income, file their tax returns or fail to timely pay their taxes. By contrast, only about 50% of Greek taxpayers are compliant and that may explain why that country needed a European Union bailout. Below is a breakdown of compliance rates in other advanced economies according to Reuters:
United Kingdom 77.97%
Switzerland 77.70%
France 75.38%
Austria 74.80%
Netherlands 72.84%
Belgium 70.15%
Portugal 68.09%
Germany 67.72%
Italy 62.49%
Many individual taxpayers have little opportunity to under report their income since they receive Form W-2s from their employers and Form 1099s from their banks and brokers. Selfemployed individuals and businesses have many more opportunities to fail to meet their tax obligations and unfortunately many of them do game the system. Because of massive, improvident budget cuts by Congress, the IRS has less opportunity to find noncompliant businesses. Sine 2010, Congress has gutted the IRS budget and as a result it now only audits .8% of tax returns which is a substantial drop from 2010 when it audited 1.1% of returns.
Those businesses among the unlucky few who are audited can expect an intense review of their returns by an IRS revenue agent. Over the years the IRS has developed a variety of techniques to discover underreported business income. Since many noncompliant businesses seek to hide their omissions the IRS will not only review receipts but use indirect methods to discover them.
Indirect Methods
When the taxpayers’ records are not available or are inadequate the examiner may consider the use of the following indirect methods:
• Bank deposit analysis
• Fully developed cash T method
• Source and application of funds
• Net worth method
• Percentage of markup method
• Unit and volume method
The following is a discussion of the indirect methods. If any of these methods rely on estimates, they must be corroborated by other methods to establish a stronger position.
Bank Deposits Method
Each field audit will start with the agent using a bank deposits method. He or she will trace cash through a bank deposit analysis or use the source and application of funds method. Several unique facets of this analysis operations should be recognized.
• Cash payouts are not deposited, but the money used to make the cash purchases originated from sales. This is cash that would not be deposited into a bank account and must be added back to the bank deposit analysis.
• In a restaurant business, cash payment of employee credit card tips is money that is not deposited, but originated from sales. Again, this cash must be added back to the bank deposit analysis.
• Sales tax collected from customers for cash sales is money deposited that is not a source of income. In many states the sales tax for restaurants and bars is higher than the sales tax for other retail businesses.
• Cash collected from vending machines is cash that needs to be deposited and included in gross receipts. If significant coin and currency deposits are not found on the deposit slips the examiner may need to determine the amount of income from this source and add it to the bank deposit analysis.
• Credit card payments from credit card companies for sales will include deposits of employee tips plus the sales taxes plus the sale. Only the portion representing the sale is taxable.
• Loans from shareholders are a non-taxable source of cash. Proof of payment is necessary to establish facts.
• Transfers between bank accounts are non-taxable.
The bank deposit analysis method assumes the business owner deposits all income in a bank account. In a cash-intensive business such as a bar or restaurant, this may not be the case. For that reason, the bank deposits analysis should generally be supplemented with another indirect method when auditing a bar or restaurant.
Use of Another Method to Support an Indirect Method
Another examination technique may be used such as having the examiner inspect the supply invoices to find the name of the company that prints the guest checks. This printing company can provide the number of guest checks purchased by the restaurant in a year. A projected income can then be determined from the average amount of the guest check times the number of checks. If these methods are used in combination, they strengthen the case.
In examining a bar, it is possible the bar owner may remove cash from his or her drawer, purchase liquor off the shelf of a store, sell the drinks in his or her establishment and pocket the profits. (In most states this practice is illegal and bar owners cannot purchase liquor off the shelf or in discount stores.) In such case, there may be no indication in the books that anything is wrong as neither the invoice nor the income touches the books. An indirect method may uncover this.
Specific Items Method of Determining Income
Before we begin analysis of indirect methods we should discuss the specific items method. This method is preferable to an indirect method as it is based upon direct evidence of income. For example, a restaurant owner may receive rebates from a supplier. A copy of the supplier’s invoices and cancelled checks establishes the amount of income from these rebates.
The specific items method relies on evidence gathered from source documents, rather than estimates. If records cannot be obtained from the taxpayer, the IRS may contact third parties. The specific items method of establishing income, supplemented by the bank deposit method, is illustrated in Ketler v. Commissioner, T.C. Memo. 1999-68. During 1990 and 1991, Warren Ketler operated two sole proprietorships, including a catering operation doing business as California Barbecue. Mr. Ketler failed to file Federal income tax returns for 1990 and 1991. The Service determined Mr. Ketler’s unreported income for these years by reference to Forms 1099 provided by payers. Prior to trial, the Service obtained 1990 and 1991 bank records for all of Mr. Ketler’s accounts and identified various nontaxable transfers and deductible business expenses. Based on this analysis, the Service asked that the Tax Court find increased income tax deficiencies. After trial, the Tax Court found that Mr. Ketler received the income reflected on the Forms 1099. It also found that the Service had properly performed the bank deposits analysis, and, therefore, Mr. Ketler was also liable for increased income tax deficiencies.
Kikolos v. Commissioner, T.C. Memo 2004-82, involved liquor store owners, Nick and Helen Kikalos. At the end of each day Mr. Kikalos would receive a bag from his store containing receipts which, among other things, included the cash register tapes (known as “Z tapes”) from the store. The Z tapes from these store registers would have allowed for an accurate calculation of the Kikalos’ gross income. However, after entering the information in his log books, Mr. Kikalos threw away all of the Z tapes.
When IRS used a mark-up percentage to figure accurate gross receipts, the Kikaloses wanted to use a different indirect method and filed their petition in court. The court said that arithmetic precision was originally and exclusively in the hands of the Kikaloses, who had simply to keep their papers and data. Having defaulted in this duty, they cannot, in essence, “frustrate the Commissioner’s reasonable attempts by compelling investigation and re-computation under every means of income determination.” The Court said that other indirect methods of estimating the Kikalos’ income are not relevant.
Quoting the Fifth Circuit, the court stated, “While the absence of adequate records “does not give the Commissioner carte blanche for imposing Draconian absolutes,” such absence does weaken any critique of the Commissioner’s methodology. Webb v. Commissioner, 394 F.2d 366, 373 (5th Cir. 1968).The court said, “Indirect methods are by their very nature estimates and courts reject the notion that the IRS should have checked their calculations by other methods.”
Bank Deposit Analysis
A bank deposit analysis (BDA) is used to identify deposits that may be taxable, to determine if business expenses were paid from other sources and to determine if business and personal accounts were comingled. The deposited items will show whether cash is deposited.
The examiner will analyze the deposits and reconcile nontaxable deposit sources, comparing the total deposit with the reported gross income. If the retail business is cash intensive, where a significant amount of receipts are not deposited and there are many expenses paid with un-deposited cash, a bank deposit analysis would not be a good indirect method for proving income. However the total known deposits should be added to cash expenditures to show the total amount of funds used. This method is best for retailers whose books are unreliable, but who make periodic bank deposits and pay expenses by check.
The bank deposits method of establishing income is illustrated in Ng v. Commissioner, T.C. Memo. 1997-248. From 1986 through 1990, Big Hong Ng owned interests in several business entities, including various restaurants. Ms. Ng controlled several bank accounts in the United States and Hong Kong. She commingled her personal funds with those of the business entities in which she had an interest. The Service conducted a bank deposit analysis and determined that Ms. Ng failed to report significant amounts of taxable income during the years in issue.
In analyzing the bank deposits, the Service separated cash, checks, cashier’s checks and wire transfers. It examined the source of each deposit and separated items subject to self-employment tax from those not subject to such tax. Further, to the extent possible, the Service eliminated those items that had been reported on Ms. Ng's income tax returns or that came from nontaxable sources (for example, transfers and refinancing proceeds). The Service also analyzed Ms. Ng's cash expenditures. The expenditures that could not be traced to a nontaxable source or reported income were considered unreported income.
Source and Application or Cash T
This method analyzes cash flows in comparison to all known expenditures, and shows that if there are excess expense items (applications) over income items (sources) an understatement of taxable income exists. These methods may be useful for a retail business that has unreported sources of income and when business and personal expenses can be verified.
Markup Method
This method reconstructs income based on the use of percentages or ratios for the type of retail business. For example, the examiner would determine the industry markup for a particular type of retailer and apply that markup percentage to the verified cost of goods sold of the taxpayer under examination.
Alternately, the examiner can use the taxpayer’s own markup percentages, if possible. A ‘shelf test’ can be performed where the current sales prices can be compared to the cost of those items to determine the markup percentage. This will be effective if there are only a few types of purchases or only a few suppliers of goods, such as for a gasoline retailer.
This method works well for a business that is cash intensive or one that does not use bank accounts to deposit receipts, or for a taxpayer where total expenditures (such as personal expenses) cannot be determined. This method is also recommended when inventories are present, but records are unreliable.
Percentage Markup Method of Determining Income
IRS examiners will use the percentage markup method in the following situations:
1. When inventories are a factor and the taxpayer has nonexistent or inadequate records.
2. Where a taxpayer's cost of goods sold or merchandise purchased is from one or two sources and these sources can be ascertained with reasonable certainty and there is a reasonable degree of consistency as to sales prices.
Computations in the Percentage of Markup Method
Possible daily volume x Average check per seat = Daily sales
The possible daily volume would be the number of seats in the establishment multiplied by how many times in a day they are occupied. The possible daily volume can be broken down into time periods in a day (breakfast, lunch, or dinner) to get a more accurate tally. The average check per seat can be obtained from the taxpayer during the initial interview or from examining the sales tickets.
The daily sales can be extended to weekly and yearly sales based on the days open per week and the weeks open per year.
Daily sales x Days open in a week = Weekly sales
Weekly sales x Weeks open in a year = Yearly sales
These estimates will take into account the number of vacant seats and people who walk out before paying their bill. The examiner will also look at the taxpayer’s advertising account to test the accuracy of reported income. Are specials advertised? How often? Specials may refer to certain menu items or discounted prices or both. Are the times during which specials are offered (for example, happy hour or weekly breakfast hours) reflected in the daily receipts ledger?
Net Worth Method
This method measures the difference between a taxpayer’s net worth (total assets less total liabilities) at the beginning and at the end of the year. An overall increase in net worth represents taxable income. This method works when there is an entire business element missing, such as a retailer that does not report sales from an internet business, or a taxpayer who has additional income from an illegal source.
The net worth method can also be used to corroborate other methods of proof or to test the accuracy of reported taxable income.
The net worth method of establishing income is illustrated in Michas v. Commissioner, T.C. Memo. 1992-161. During 1984, the taxpayers owned several sole-proprietorships, including a liquor store. The Service determined that the books and records of these sole-proprietorships were inadequate and analyzed the taxpayer’s net worth to determine whether all taxable income had been reported. The Service performed this analysis by determining the cost of the taxpayer's business and personal assets at the beginning and end of 1984. The Service then reduced these amounts by the taxpayer’s liabilities at the beginning and end of the year. Then, the difference was adjusted by adding nondeductible expenditures (for example, living expenses) and by subtracting nontaxable sources of income (for example, gifts and loans).
The Court largely agreed with the Service, but found that certain adjustments to net worth were not proper. Accordingly, the Court reduced the amount of unreported income determined by the Service.
In summary a non-compliant business may think they can hide income from the IRS but once they come under examination the IRS will doggedly search for omissions.
Robert E. McKenzie of the law firm of Arnstein & Lehr LLP of Chicago, Illinois, concentrates his practice in representation before the Internal Revenue Service and state tax agencies. He previously served as a member of the IRS Advisory Council (IRSAC) which is a group appointed by the IRS Commissioner from 2009 to 2011.
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- Written by: Todd Sexton, MBA
A phishing scam is an attempt to collect sensitive information from users by deceiving them into thinking that the phishing email came from a legitimate organization, and/or a trusted individual. The majority of phishing articles in the press are focused on the dangers to individual users. However, over the past few years, the phishing problem has also plagued organizations of all sizes. Smaller companies are often more vulnerable to phishing threats simply because they have limited resources to dedicate to educating their users, and investing time and money into technology tools to help prevent the problem from occurring.
Spear Phishing is the scam that most often affects organizations. Most people would automatically trust an email if it appears to have come from someone inside their organization. These are highly targeted attacks, where scammers get ahold of the corporate directory of the company they target. Masquerading as an employee’s colleague, they often choose to impersonate someone in the position of power (CEO, CTO, etc.) to persuade the individual they target from revealing information without questioning the reasons as to why they are requesting it.
Accounting firms are great targets for phishing attacks. They are often small organizations without an IT and legal department to warn and protect them from potential threats. They handle valuable information of their clients, such as social security numbers, addresses and financial data.
Just recently, the IRS issued a warning to tax preparers about a phishing message sent out by criminals impersonating the IRS, and asking tax preparers to update their IRS eServices information (Accounting Today, November 2015).
According to the IRS, the above example is not an isolated incident. In fact, these types of scams have increased by about 400% over the past year (the Naked Security report by Sophos, March 2016).
Filing fraudulent tax returns by using stolen W2 forms is yet another popular phishing scam that can affect both accounting firms and HR departments. A number of companies have recently been defrauded via spear phishing attacks designed to steal W2 forms, including Kantar Group (28,000 employees), Sprouts Farmer’s Market (17,000 employees), and many others (Krebs on Security, March 2016).
Even though accounting firms often lack resources of larger organizations, there are simple things they can do to protect themselves, and their customers:
• Educate their employees – Being aware of the problem is the first and most important step to preventing users from falling victims to phishing attacks. Each company needs to develop simple-to-follow rules on how to use email inside their company. Employees should never send out sensitive information using unprotected email, and without double-checking the source of the request.
• Software updates – Always keeping their software applications and browsers updated will help reduce the number of scams delivered to the user inbox, as well as help protect users from accessing fake websites.
• Email Security – Email encryption solutions will enable the recipient to ensure a received message came from a legitimate source. To open messages, the recipient has to enter agreed upon information specified by the sender, and known only to the recipient. Such solutions also ensure content of messages cannot be read if ever intercepted while in transit, offering double protection for senders and receivers.
Accounting firms that continue to ignore phishing threats leave themselves exposed to lawsuits by their clients. Protecting their sensitive information should be a top priority for any organization. With a wide variety of security solutions available to organizations today, it’s easy to pick a user-friendly system that is not expensive or time-consuming to maintain.
Todd Sexton, MBA is the CEO and Director of Identillect Technologies. Sexton specializes in security and compliance and frequently consults, lectures and publishes on security related topics.
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- Written by: Peter J. Scalise
On May 5th, the Internal Revenue Service (hereinafter the “Service”) issued Rev. Proc. 2016-29, which outlines automatic accounting method changes and provides administrative procedures for electing them. Consequently, filers of Form 3115 entitled “Application for Change in Accounting Method” filed on or after May 5, 2016 must now follow this updated form of administrative authority. As it should be duly recalled, a revenue procedure is a statement of procedure that affects the rights or duties of taxpayers or other members of the public under the Internal Revenue Code (hereinafter the “Code”). Similar to Revenue Rulings, Revenue Procedures are less authoritative than Temporary and Final Treasury Regulations. Regardless, Revenue Procedures are binding on the Service and taxpayers alike and should be adhered to for purposes of assessing tax return filing positions under the Code and Circular 230.
Scope & Application of Rev. Proc. 2016-29
As a synopsis, Rev. Proc. 2016-29 modifies, amplifies, and in part supersedes Rev. Proc. 2015-14 as well as other revenue procedures covering accounting method changes. This revenue procedure makes clean-ups, such as removing now superseded accounting method changes or eliminating reference to the now expired Proposed and Temporary Tangible Property Regulations. Moreover, Rev. Proc. 2016-29 provides new guidance for accounting method changes under the Final Tangible Property Regulations including, but not limited to:
• Section 6.01, relating to impermissible to permissible methods of depreciation or amortization, makes clear that depreciation changes are not automatic for property where the taxpayer has previously taken a federal income tax credit;
• Section 6.20, relating to the revocation of a partial disposition election under the remodel-refresh safe harbor described in Rev. Proc. 2015-56, is modified to provide that such revocation must be made, and the eligibility rules in sections 5.01(1)(d) and (f) of Rev. Proc. 2015-13 do not apply, for any taxable year beginning after December 31, 2013, and ending before December 31, 2016;
• Section 11.08, relating to changes for tangible property, provides that the section does not apply to amounts paid or incurred for repair and maintenance costs that the taxpayer is changing from capitalizing to deducting and for which the taxpayer has claimed a federal income tax credit or elected to apply I.R.C. § 168(k)(4); and
• Section 11.10, relating to the remodel-refresh safe harbor described in Rev. Proc. 2015-56, is modified to provide that the eligibility rules in sections 5.01(1)(d) and (f) of Rev. Proc. 2015-13 do not apply for any taxable year beginning after December 31, 2013, and ending before December 31, 2016.
Rev. Proc. 2016-29 can be accessed for your reference at:
https://www.irs.gov/pub/irs-drop/rp-16-29.pdf
Peter J. Scalise serves as the Federal Tax Credits & Incentives Practice Leader for Prager Metis CPAs, LLC a member of The Prager Metis International Group. Scalise serves on both the Board of Directors and Board of Editors for The American Society of Tax Professionals (ASTP).
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- Written by: Joshua Fluegel
Rick Richardson, CPA, CITP, CGMA has been known by many titles whether it is audit guru, convention presenter or technological Nostradamus. Of all of his titles, fewer seem to be aware of Richardson being an unofficial Beach Boy. This title was bestowed on him in 1964 when he played drums on the recordings of the Beach Boys’ “California Girls” and “Fun, Fun, Fun.” This achievement culminated from a life-long love of music and was eventually followed by a career in accounting and auditing.
“I started playing the drums around seven years old, something like that,” said Richardson. “All through school I was involved with bands, in elementary school, junior high school, very active in high school. One of the reasons I picked UCLA to go to college was the music program. Though I didn’t get a degree in it I wanted to be involved in the band program at UCLA. In terms of UCLA, I was involved with the marching band and the symphonic wind ensemble. As I got into my junior and senior years I was able to be in the 24-piece big band called the varsity band.”
While involved in numerous ensembles at UCLA, Richardson’s musical reputation had the director of bands call him one day asking if he would like to sit in for an all-nighter recording session. Of course, Richardson said he’d love to.
“I showed up at the event and knew nothing about the Beach Boys at the time because they were still relatively unknown,” said Richardson. “A couple of songs had done pretty well but not much. My big claim to fame is an overnight recording session with two reasonably big hits over a 50-year span.”
The following 10 to 11 hours of recording saw Richardson working side by side with music genius/notorious perfectionist Brian Wilson of the Beach Boys. The recording process proved arduous as lines of music were recorded and re-recorded far more times than Richardson had expected.
“The thing I never realized was how many times you re-record the song over and over again with slight nuances,” said Richardson. “They might take four bars from one recording and four bars from another recording.”
Aside from making musical history with some of the greatest musicians of a generation, Richardson surpassed the average daily earnings for a college student by a great deal. Richardson walked away with enough to pay his next semester’s fees in cash. This was not bad for a night’s work.
Richardson eventually received his degree and committed his talents to public accounting. He then began to focus on auditing where he found his true passion for numbers.
“I got into the auditing side of the game because I never really liked accounting per se.,” said Richardson. “I did it and I was good at it. The reporting side doing all the footnotes and all of the stuff that was required for accounting never interested me. What did interest me was, ‘are the numbers we’re putting in there good? How do we find out if they’re good before we put them on the financial statement?’ The idea of being that skeptical guy that figures out why sales are down in this one quarter.”
One might say the transition from music to accounting and auditing was drastic as Richardson claims there is little overlap between the two vocations. However, Richardson proved himself capable of approaching the different field with the same level of virtuosity. Richardson rose to become the chief technologist for Ernst and Young which led him to being the chief technologist for the CPA profession and sought after technology futurist presenter.
“I would say the two are distinctly different and I like them both for different reasons,” said Richardson. “The preciseness of the computer field and auditing compared to the emotional side, I still get very emotional whenever I play. For me music really is something from the heart.”
Richardson said his drumming is a terrific avocation as the life of a professional musician is one of constant travel which would keep him away from family. While moving ever forward in the world of auditing and technology, Richardson continues beat away at his drum kit with family and friends and still has fun, fun, fun doing it.