The Old Man and the C – PA (with Apologies to Hemingway)

On February 4, 2019, I was taking a walk along the beach in Aruba towards the end of my annual three-week winter vacation to prepare for the tax season when I realized that 49 years ago I had started in public accounting and therefore this would be my 50th tax season. I started to think about then and now and could not stop myself from sitting down with my laptop and writing this article.

On Monday February 4, 1970, I started a job in public accounting. After being shown to my desk in the staff room and introduced to three other hopeful CPAs who were my fellow employees, I was instructed that I should remove my suit jacket and hang it up in the closet. While everyone wore a shirt and tie, my three piece suit (having come from the world of banking) was a bit much since I was not working for one of the big eight. That was then.

Now, I do not remember the last time that I wore a tie in the office or attended a meeting where anyone other than perhaps an attorney was wearing a tie. Now is better. I was informed that tax season hours were as follows: Monday through Friday: 8:00 a.m. - 5:00 p.m. with a half hour for lunch and two nights (on days that I was scheduled to be in the office) from 5:00 - 10:00 p.m. with a half hour for dinner. I could pick the two days each week (no one called that work life balance). Saturdays we worked 9:00 a.m. - 5:00 p.m. In our firm, there has never been "required" hours – everyone has access to the computer network from their home and is expected to accomplish their work, in the office, from home. No matter where they are, what day and time works best for them, we are working professionals expected to reach our given deadlines and meet our obligations. Now is better.

My first task of the day then was to sharpen four or five pencils. Usually four were wooden pencils with black lead and an eraser (which usually lasted for two or three days). The 5th pencil was a non-reproductive blue pencil. Please find an old guy (there were virtually no female accountants – definitely better now) and he will explain what a non-reproductive blue pencil was, and no, it had nothing to do with birth control. Now, each morning I have to enter six secret passwords in order to open my computer, open my outlook, open my explorer, open my dashboard and open my time sheet. Since these passwords must be changed every 90 days I do not commit them to memory but have them written down on a piece a paper which I hide so well that I usually cannot find it. Oh yes, I also have a secret password to open Profx.

Because the IRS was involved in the process of creating passwords for tax software, if I fail to enter anything for 15 minutes then the program closes and I have to reenter the password. During tax season, I find that I can remember the password after 80 or 85 days because I have entered it at least 1,000 times. It's safe to say that sharpening pencils is much easier. After a year, I was able to use a red pencil as I could review the work of other staff members. In addition, I had a large red rubber eraser (as mentioned, the eraser on the pencil had a much shorter life than the lead) and I actually found a company in Toronto that sold a white plastic eraser which erased much better than the red rubber erasers and I bought a dozen to get me through the season. Now we use computers so we never make mistakes and we do not need pencils with lead of any color and never have anything to erase (except maybe the metadata). Much better now.

My first Saturday I was assigned to compute the 1969 depreciation expense of a client partnership which owned a large shopping center. They used what was known then as component depreciation – you may know it as “cost seg.” Since an adding machine could only add and subtract (still true – if you can find an adding machine – maybe the afore mentioned old guy has one on his desk) we used a machine known as a comptometer (I think that is the correct name), which could multiply and divide as well as add and subtract. It looked like a full keyboard adding machine (for each number places there were ten keys, i.e., 0 through 9, so if the capacity was ten places $99,999,999.99 it had 100 keys) and it was able to multiply and subtract because the carriage actually was capable of rising and moving left or right. This mechanical wonder also made loud noises as it banged and clanged along. To ensure that each calculation was correct, it was done a minimum of two times or as many as needed until there were two results which were the same number.

The depreciation schedule was hand written on 40 column accounting paper and to “save time” when the 40th column on any line was filled, we would scotch tape on another 40 column sheet so that we did not need to rewrite the description of the assets, date acquired and tax basis. Then, based upon an ancient Egyptian technique shown in hieroglyphics discovered by Harold Carter in King Tut’s tomb, we would fold the entire thing so that it was roughly 8 ½ by 11. What usually resulted was a scroll that looked as if it was in Tut’s tomb and you needed three desks to open the entire depreciation schedule.

On my first Saturday,  I came in at 9:00 a.m.and by 5:00 p.m., I had completed the depreciation calculations – 7 ½ hours at my billing rate of $14 per hour equals $105. “How the hell am I supposed to bill the client that much?” was one question my boss wanted to know the answer to. Today, other than adding the assets acquired during the year, the time is less than a minute and Profx charges $500. A policy when Carol Scibetta and I started the firm was that we would bill the computer charges to the clients on whose work they were incurred. Much, much better today.

When I graduated from Northeastern in 1968, I stayed with the bank which was my co-op employer. As I had the 4^th highest accounting average of the accounting majors, I was paid $140 per week. That was comparable to the compensation paid to my fellow graduates who went to work for the big eight in Boston. In the following 19 months, my compensation had advanced to $8,500. I was hired in public accounting in February, 1970 for $140 per week, plus $15 per week for the use of my car. Under the tax law in 1970, this $15 stipend was not taxed. However, even then, my after-tax income was lower than it had been in banking. But, I was able to claim a deduction for the business use of one room in our four room apartment which resulted in a deduction $540 which just about put me where I had been before.

In addition, after the tax season I received a $500 bonus (we received no overtime pay for the tax season hours) and a raise of $10 per week. Today, starting accounting salaries in the Boston Area appear to be around $50,000 per year, which is probably better depending on whether you are partner or an employee.  What happened to the bank which I worked for? It failed about five years after I left. What happened to the accounting firm? It became one of the largest firms in Massachusetts before merging with a New York City second tier firm looking for a foothold in Boston and New England. What happened to me? A career that has been satisfying and successful which I plan to continue for many more years.

The opportunity to work with many other super accountants and wonderful clients (one of our absolute policies when we started the firm was that we would not take anyone we did not like as a client – nothing adds to stress as much as having to work with clients whom you dislike). My first tax season, I learned all about the Internal Revenue Code of 1954 and the “largest tax law in history,” the 1969 Reform act which was effective for 1970. In the years since I started, Congress has fought a never-ending battle between equity and simplicity – and both goals have never been further away than they are today. Better then or now? Ask the 50-year-old guy with the adding machine on his desk. Me, I am going to read the law, determine the facts and do the best which I can for my clients as I have for the past 49 years.