CPA Mark Welsh: With Tax Day passed, ‘difference is dramatic’

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Chances are that if you have a friend who is a Certified Public Accountant, you haven’t seen much of them since Christmas.

That’s because it’s tax season, and most if not all Salisbury-area CPAs have been spending long, cold days and nights in their offices, churning out tax forms.

At Salisbury’s TGM Group on Mount Hermon Road, partner Mark Welsh has been one such CPA, working hour upon hour toward the April 15 deadline. A member of the Accounting and Auditing Department of TGM, he runs the firm’s financial institutions client practice and has primary responsibility for SEC filings and regulatory reporting. Welsh also has responsibilities involving closely held businesses, banks, governments, 401k plan audits and nonprofit organizations.

He performs audit, accounting, and tax services for clients and is primarily responsible for supervising fieldwork, management consulting, and preparation of financial statements and management reports.

The Salisbury resident began his public accounting career with the national accounting firm of Coopers & Lybrand, where he worked in both the audit and tax departments. He is a former adjunct professor of accounting at the Franklin P. Perdue School of Business at Salisbury State University where he taught for eight years and is a frequent public speaker on accounting and auditing topics.

He received his Bachelor of Science in Accounting from the University of Baltimore and his Masters of Business Administration with a concentration in Taxation from the same university. For many years, he has been a top organizer and fund-raiser for several local nonprofits, and serves as chairman of the Corporate Board for the Mid-Delmarva YMCA.

Q: So, yesterday was April 15.  Is your busy time truly over, or is there still a lot of work to be done?

A: Believe it or not, it’s like a switch has flipped and you go from 100 mph to 30 mph from April 15 to the next day April 16.

The difference is that dramatic. Yes, there will be returns on extension to prepare, but you now have six months to prepare them.

Q: Is it true that you CPA’s and your staff people essentially work nonstop for three-and-a half months beginning in January?

A: No, it is not quite that bad. Actually, for the past two years you could not even file a tax return with the IRS until February, that said, it does condense the actual time you can work before the April 15 deadline.

I would say that from Feb. 15 until April 15 it can be pretty intense.

Q: What is a typically work week like during tax season?

A: I can only speak for myself, but a typical workweek is Monday through Saturday, 8:30 a.m. to 7:30 p.m. with a 15- to 20-minute lunch at my desk.

I did not miss working a Saturday during tax season and I did not go out for lunch one time from Feb. 15 until April 15.

That may sound intense, but I know some CPAs who work much more than that.

Q: What do you consider your strongest assets as a CPA and how you deal with your clients ?

A: I believe I have strong organizational skills and very good communication skills.

I think my other strength is that I am well rounded. I perform audits, reviews, compilations, benefit plan audits, taxes, consulting and specialize in our banking and SEC practice.

While maybe not a specialist in everything,  I have many experiences in those areas.

Q: What advice would you give to someone newly graduating with an Accounting Degree?

A: Work for a public accounting for several years minimum and don’t specialize right away.

Get a multitude of experiences in accounting and taxation and eventually find what you like.

People tend to do well in areas they like. A public accounting firm is a great way to get those experiences in the first four to five years of your career.

Q: What is an IRS tax audit like?  For the CPA and the person being audited?

A: I was personally audited about 20 years ago and the audit was supposed to last three days, but they left after two days and issued a “no change” order.

One of my partners handled the audit and I never actually met with the IRS examiner. During an IRS examination, most CPAs will not let their client meet with the IRS examiner unless it is absolutely critical as they don’t want their clients to say something that could harm their case.

As you can imagine, most client are very apprehensive when they receive an IRS notice saying they are going to be audited.

Q: What are the usual omissions you see from your clients?  What do they forget to provide to you?

A: It really runs the gamut, but mostly it is missing Form 1099s — interest, dividends, miscellaneous income — that come late in the mail.

If they have stock sales client sometimes forget to give us the cost basis and they have to go find older paperwork.

Q: Explain why everyone has a fundamental right to pay the minimum taxes possible?

A:  The way I look at it the IRS publishes the IRS Code which is the rule book for filing and paying taxes. While there are certainly some gray areas in the IRS Code, most of it is black and white on what you can and cannot do as it relates to reporting income and deducting expenses.

As long as people operate within the constraints of the IRS Code, I think they have an inherent right to pay as little taxes as possible — and this is where I come into the picture.

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Q: Why should people hire an accountant or CPA, rather that use tax software and prepare the tax returns themselves?

A:  The software tends to be reactive to what you already have done in the prior year.  You are preparing the return in 2015 on transactions that already occurred in 2014.

If you have a CPA or accountant that you interact with during the year, you can be proactive during the year when entering transactions that should be to your benefit.

Is it more costly, sure, but a good accountant or CPA should easily be able to pay for themselves in tax savings during the year.

Q: What tax problems are unique to this Lower Shore area?

A: Preparing farming returns are pretty unique to this area and because we live near a resort area many taxpayers have second homes near the beach or beach home rentals.

Q: The stereotype is that accountants and CPA are pretty serious and un-humorous group — but you seem to have a very personable, jovial personality. Are you the exception?

A: I certainly have heard those same comments regarding the accounting profession and to some extent it is probably true.

In my opinion, most accountants tend to be introverts — but I am not the exception. In my own case, I think if you were to see me during the work day you may have a different opinion about me.

I work pretty hard at work and tend to be very goal oriented as to what I need to accomplish in any given day.  However, when I walk out the office doors at the end of the day, my outlook changes and I like to have a little fun, especially on the golf course and with my friends.

Q: Based on local tax filings over the past several years, have we recovered yet from the 2007-2008 economic crisis?

A: Not really, while we have certainly improved from the depths of the 2007-2009 economic crisis we have not fully recovered on the Shore.

I hate to be pessimistic but I think it will be several more years before we ever get back to those pre-recessionary conditions on the Shore.

Greg Bassett is editor and general manager of Salisbury Independent. Reach him at gbassett@newszap.com

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