The following stories are representative of the powerful protection and client-success driven strategies that The Tax Warriors® offer, illustrating Drucker & Scaccetti’s longstanding commitment to providing strategic tax solutions for individuals, entrepreneurs, corporations and family-run businesses.
2nd Generation Family Business in Jeopardy
THE CASE: A local accounting firm referred a small family business to us with a complicated tax matter. The company presented with more than $320,000 in delinquent payroll taxes from the time the father, who founded the company, was in charge. The son, who now owns the business, was on the verge of closing the business’s doors for good because he could not afford to pay the large liability. The Tax Warriors® at Drucker & Scaccetti reviewed the case, worked side-by-side with the client as their advocate, and resolved to make an offer and compromise. After a long process by the IRS, the offer and compromise was accepted.
THE RESULT: The client was ultimately responsible for only $20,000 in back taxes and no penalties, which allowed the business to continue serving its customers for another generation.
Don’t Believe Your W-2
THE CASE: A senior executive at a national company enrolled in our Executive Tax & Financial Planning Program. He wanted to discuss his retirement plans and determine if he was on track to meet his family's goals. The executive had significant tax-deferred retirement accounts with his employer and wanted to better understand his net after-tax assets and cash-flow in retirement. The executive began his conversations with The Tax Warriors® at Drucker & Scaccetti nearly three years prior to his planned retirement, and it’s a good thing he did.
After careful review of his various retirement plans and applying an astute understanding of the laws pertaining to them, we discovered one plan could qualify as non-taxable retirement income for Pennsylvania tax purposes even though the company said they planned to withhold more than $160,000 of Pennsylvania income taxes on the executive's distributions from the plan.
THE RESULT: After we explained the law to the company, they asked their advisors, and then concluded we were correct. This greatly reduced the executive's risk involved in requesting a refund from the state had the employer withheld.
A Growing Business Needs More Than Compliance
THE CASE: A prospect came to Drucker & Scaccetti via an executive-level professional organization. Their initial issue was non-tax in nature and we assisted with a referral. The business was growing rapidly and had outgrown its original accounting firm. The Tax Warriors® at Drucker & Scaccetti were engaged to help.
One of the first services we provided was an analysis of S-Corp basis, which resulted in filing refund claims for several prior open years. As the client’s trust in us grew, and as we continued to make wealth-preserving suggestions for the business and its owner, the engagement expanded. Since then, we have helped with calculations for Research & Development credits, referred cost segregation analysis on new and existing buildings and continued to assist with S-Corp basis considerations.
THE RESULT: We continue to work with the client across a broad range of areas including gift planning for the client’s parents and real estate transfers. The value of the relationship is realized beyond compliance and the work entrusted to us, of both business and personal nature, reflects that trust.
A Knowledgeable Advisor Makes All the Difference
THE CASE: A client engaged an accountant with lower fees. Soon, the former client called us with a pressing tax issue. Since leaving us, the former client applied for the Jump Start Philly program, which gives new businesses in Philadelphia a two-year tax abatement and exempts them from most new business licensing fees. One form needed to apply for the abatements and exemptions was never received by the city and the former client received a bill for two years of taxes, penalties and interest, totaling more than $70,000. The former client re-engaged The Tax Warriors® at Drucker & Scaccetti and a full-on analysis was immediately underway.
THE RESULT: The Tax Warriors understood the Philadelphia tax laws and had experience and knowledge to successfully navigate the city’s Department of Revenue to quickly explain, amend and complete the documents. This saved the client more than $70,000 and brought them into compliance. The business remains a client and took full advantage of the Jump Start Philly program.
The Benefits of a D&S Tax Strategy Review
THE CASE: An investment advisor referred a prospect to us. Though the prospect, a family-owned manufacturer, was compliant and up to date on all filings, The Tax Warriors® at Drucker & Scaccetti started with a full review of the previous three years of tax filings, for both the business and the individuals.
During our review, we found computational discrepancies and tax law interpretation errors on both the business and individual returns—across all three years and in multiple areas.
THE RESULT: The prospect engaged The Tax Warriors and we assisted in filing several amended returns, recouping more than $100,000 of federal and state refunds for the client. We also recommended a forward-looking estimated tax payment strategy designed to sustain and grow the wealth of the family business owners.