Tag Archives: julieann chaet

My Perspective of Accountants and CPAs

Larry Goldsmith

by Larry Goldsmith, JD, CPA, MAFF, and Julieann Chaet, CPA, MAFF

I’ve always looked at accountants, CPAs or not, as instruments or tools to be used by the IRS or the banks, or buyers and sellers of businesses. What I mean by that is, accountants working in public accounting firms complete the tasks for the Internal Revenue Service to collect its taxes. We provide the measuring stick used by bankers to lend money. We are the instrument that verifies income and assets for the buyers and sellers of businesses. We are important because we produce the tax returns the IRS looks for and the financial statements the banks require. We provide the verification to business that the company is profitable.

To our clients, we become the trusted individuals they depend on to prepare their tax returns or to prepare their company’s financial statement. But all too many times clients will make financial decisions without asking for their accountant’s opinion. I have to say my favorite clients are the ones who call me up to say “Are you busy?” or “Do you have a minute?”  The truth is, I was busy, but that interruption when they ask for my opinion or ask me a question, can save them hundreds or even thousands of dollars.

It usually takes only minutes to answer a client’s question when they call or e-mail. It’s when clients don’t ask the questions, that it can cause problems that can cost more than money.

I prepared very few tax returns this tax season because I was thankfully busy with my forensics work. However, one of the tax returns that I did prepare was absolutely gut-wrenching. A month later, I still think about these particular clients who I’ve never personally met. As I was sorting through their data and inputting the numbers into our tax program, I became curious. I thought I must be missing something. I finished preparing the tax return. The couple owed what was for them a lot of money – thousands of dollars.

So I asked the partner whose name is on the return, “what’s the deal?” Apparently, this 62 year old couple was making over $100,000 a year for at least the last 5 years. Both husband and wife had their own careers. They owned a home. The husband had even gone back to school to further his professional degree while maintaining his career.

The problem started with a stroke – a stroke had debilitated the husband at the age of 59. The husband could no longer care for himself so a full-time nurse was brought in to care for him. After a couple years the wife could no longer afford the full-time nurse so she quit her job to care for her husband. They sold their house and moved into their daughter’s apartment.

By the time I was preparing the couple’s tax return, most of the couple’s savings including IRAs and proceeds from the house had been spent on living expenses and the husband’s medical care.

So what did I do?  I saw Larry Goldsmith, the head of CJBS’s Financial Group’s litigation, asset protection and tax practices team walking past my desk. “Larry, you need to do something!”, I said. I didn’t care that he was just walking in from the polar vortex that we were having outside, and that maybe he wanted to take off his hat and defrost. This woman was going to live probably for another decade or two. Her husband could live years in his current condition, and all their money was squandered on medical bills. Where would the money come from to pay the tax return?

Unfortunately, even with his vast experience and resources for this sort of thing, Larry wasn’t able to provide a solution. It was too late. The truth is the couple was financially bankrupt and didn’t know it. Their liabilities (the monies they owed) far exceeded the monies and assets they possessed. They spent their savings along with their IRA’s that she would one day need because she didn’t know that there were taxes to pay on the IRAs.

Thousands of dollars of her savings were spent caring for her husband that didn’t need to be. The wife did not know about different agencies that could’ve helped or the benefits of financial planning. She did not know that creditors cannot seize her IRAs from her.

You see she never asked the questions of her accountant so the accountant wasn’t aware of all that was happening.

We became aware the day we called her to try to make sense of the documents in front of me.  There is a solution, but it requires planning.

Julieann Chaet, CPA, MAFF

Julieann is the Manager of CJBS’ forensic accounting and litigation services practice.

Call Julieann at 847.580.5449, or e-mail: jc@cjbs.com

 

Larry Goldsmith, JD, CPA, MAFF

Call Larry at 847.580.5427, or e-mail: Larry@cjbs.com

Forensics is About Teamwork…

Larry Goldsmith

by Larry Goldsmith, JD, CPA, MAFF, and Julieann Chaet, CPA, MAFF

So much is always happening in each of our own lives.  We have our kids, our parents, our friends, our jobs.  We have the maintenance of our homes, our cars, and even ourselves, if we allow that.

The Forensics Team at CJBS can be broken down into these smaller pieces.  Each of us has our family, friends, and homes.  In addition each of us has our own unique experiences in our education, skills, and knowledge.

The bigger picture of the Forensics Team at CJBS is that we are a piece of our client’s team.  The Forensics Team at CJBS works with our clients and their attorneys.  We collaborate to bring our own unique skill set to solve problems and create solutions.

I was at a seminar last week, and received an e-mail informing me that a client needed to talk.  I called the client back thinking that it had something to do with the case.  Maybe there was new evidence that was found.  Maybe the soon-to-be ex-spouse decided to do the right thing and turn over all the information we were pursuing.  Or maybe the client needed reassurance that we were progressing and discovering hidden money or property.  The phone call was neither of those things.  It was a client who was going to her divorce hearing the next day and was scared.  It was a client that just needed to talk.  It was a client who needed to know that we, her forensic team, was doing everything possible to make her next day, the day of her hearing, as successful as possible.  We spoke for about a half hour.  I had been in those shoes in a divorce, and it’s not a nice place to be.  At that moment I was more than her forensic accountant.  I was her friend.   I was part of the team of professionals who would together make her next days as successful as possible with the least anxiety as possible, if that’s even possible.

The Forensics Team at CJBS is a group of people working together with our client and her/his attorney to achieve the best result possible for our client.  We are passionate for both our client and the quality of our work product.

Julieann Chaet, CPA, MAFF

Julieann is the Manager of CJBS’ forensic accounting and litigation services practice.

Call Julieann at 847.580.5449, or e-mail: jc@cjbs.com

 

Larry Goldsmith, JD, CPA, MAFF

Call Larry at 847.580.5427, or e-mail: Larry@cjbs.com

The Need to Invest in a Forensic CPA

Larry Goldsmith

Larry GoldsmithJulieann Chaet

by Larry Goldsmith, JD, CPA, MAFF, and Julieann Chaet, CPA

So, there I am stuck in traffic attempting to get home from my day at the office, and I cannot find anything on the radio that I want to listen to. One commercial after another, or one not necessarily bad song, just not what I care to listen to, and this commercial comes on about investing in gold.  You’ve probably heard the commercial a 1000 times, and either acted on it, thereby making an investment in gold, or thought, when is this commercial going to end?  That’s when this blog was born.  The same gold commercial that I’ve listened to 1000 times, for whatever reason in that particular moment on that particular day, was a brainstorm.  That is to say the investment in gold can be comparable to the investment in a forensic accountant.

Give me a moment while I explain.  Darrell D. Dorrell and Gregory A. Gadawski are the authors of many forensic accounting textbooks. Their definition of forensic accounting is “the art and science of investigating people and money”.  This is precisely what we at CJBS do in the forensic department.  Our team investigates any documents that relate to someone’s behavior and habits.  For example, whether a corporate case or a personal divorce case, two of the first items we ask for are the known bank account statements and the credit card statements.  Bank statements and credit card statements show the habits of the company or the habits of an individual.  For example, were the appliances purchased for the work place or were they for the home? Why does the company credit card show a down payment on an auto when the company that s/he is employed for pays the lease of the auto that the employee is driving? Why is the business doing so poorly that they are increasing the line of credit if sales are on the rise?

Forensic accounting is about finding the gold. Of course gold can be the gold bar that you think of when you hear the commercial for investing in gold, but gold can come in not-so literal packages. How about a real estate property that one spouse never knew existed?  Or receiving monthly child support payments without going back to court each month to fight for what was already determined to be your lawful right? How about the company that is continually just breaking even only to discover that company’s monies was used to pay for an employee’s personal expenditures?

Sometimes there is one working spouse that controls all the money of the household.  The other spouse is at home to raise the children, while trusting his/her partner to invest the monies for their collective benefit and ownership. Years later the marriage may be at a breaking point, and the spouse that stayed home may not be aware of what assets were purchased or where the monies have gone during the marriage. Many times the stay at home spouse lacks the knowledge of which bank accounts exist.

It is the forensic CPA that can discover unknown assets such as real estate properties or bank accounts. Attorneys went to law school to study the law. CPAs like numbers and they have the education to understand the flow of these numbers. Forensic CPAs differ from ordinary CPAs in that Forensic CPAs utilize specialized techniques to find the hidden assets and income.

As forensic CPAs at CJBS, our team is trained to find the gold.

CJBS, LLC is a Chicago based firm that assists its clients with a wide range of accounting and financial issues, protecting and expanding the value of mid-size companies. E-mail Larry at larry@cjbs.com or Julieann at jc@cjbs.com if you have any questions about this posting or if we may be of assistance in any way.

Julieann Chaet, CPA

Call Julieann at 847.580.5449, or e-mail: jc@cjbs.com

 

Larry Goldsmith, JD, CPA, MAFF

Call Larry at 847.580.5427, or e-mail: Larry@cjbs.com