How to make HMRC 'Quite Interesting' (QI TV prog)

BBC TVs QI comedy panel show once focused on the 'Inland Revenue'. (Series I Episode 10)

Some of the stories are worth repeating on this blog:

The world's most exotic tax inspectors are in Pakistan. If you refuse to pay your tax you are shamed into paying it by receiving a visit from a team of tax inspectors who are all transgender. They would then sing and dance in your place of business until you paid up. 

In Andhra Pradesh, India, tax inspectors use drummers to get people to pay tax, by standing outside the place of business and banging on the drums loudly until they pay up. The comedians on the show considered how the 'Inland Revenue' might achieve a similar outcome here. The favoured conclusion was to send in the Morris Dancers.

Sandi Toksvig once spent three days with a tax man who investigated all of her accounts. In the end he did not find anything and the taxman said: "To be honest Miss Toksvig, I just wanted to meet you."

Dara O'Briain recalled an actor who tried to claim his carpet against tax because of the wear and tear he caused when he walked up and down while he learnt his lines. He did not get away with it. 

Dara himself once tried to claim for a bed but failed, while Sandi attempted to claim for some paintings in her office, failing as well. She told the tax inspector that no-one could possibly work in an office which had no art in it. Sandi looked around the inspector's office and saw that it had just one poster in it, which explained the Heimlich manoeuvre.

NB: This episode was first broadcast in 2011 and clearly no one had told the researchers or producers that HMRC took over from the Inland Revenue 6 years earlier in April 2005. 

The episode was hosted by Stephen Fry with Alan Davies and guests Al Murray, Dara O'Briain and Sandi Toksvig.  

When QI focused an episode on the Inland Revenue

Ten years back, when Stephen Fry still hosted the BBC TV programme QI, episode 10 of Series I was focused on the Inland Revenue*. 

Here are some of the amusing anecdotes referenced in that episode: 

• In Andhra Pradesh, India, tax inspectors use drummers to get people to pay tax, by standing outside the place of business and banging on the drums loudly until they pay up. The comedians on the show considered how the 'Inland Revenue' might achieve a similar outcome here. The favoured conclusion was to send in the Morris Dancers.

• Sandi Toksvig (who was a guest on this episode) once spent three days with a tax man who investigated all of her accounts. In the end he did not find anything and the taxman said: "To be honest Miss Toksvig, I just wanted to meet you."

• Dara O'Briain (another guest) recalled an actor who tried to claim his carpet against tax because of the wear and tear he caused when he walked up and down while he learnt his lines. He did not get away with it. 

• Dara himself once tried to claim tax relief for a bed but failed, while Sandi attempted to claim for some paintings in her office, failing as well. She told the tax inspector that no-one could possibly work in an office which had no art in it. Sandi looked around the inspector's office and saw that it had just one poster in it, which explained the Heimlich manoeuvre.

* This episode was first broadcast in November 2011. Clearly no one had told the researchers or producers that the Inland Revenue had ceased to exist more than 6 years previously. The UK tax authority has been known as HMRC since April 2005!

Texting - a trainee accountant's mistake. True story.

A salutary lesson about how to not follow up after an interview was contained in an article in the Sunday Times about the 'explosion in text messaging' in 2008. Could it still happen today?

Amongst the stories referred to in the article was this story:

Take the example of Ed, a university graduate from Manchester who applied for a job with a top accountancy firm in London. After a virtuoso performance at the interview, the vice-president in charge of recruitment gave him his mobile number in case he had any questions. Young Ed thought nothing of texting him the next day with the following message: “m8, wot a gr8 intvw!! u shld def give me the job lol.”

Needless to say, the vice-president did not oblige.

Of course one could question the accuracy of the story. I suspect it is based on an original story about an American graduate applying for a job in the US office of an accountancy firm. After all, whoever heard of a UK firm with a "vice-president in charge of recruitment"?!

Married at First Sight: Accountants stuck in a bad marriage

What follows is an entertaining analysis of the merger of two accounting bodies as if they had met and married in 2014 in a lavish ceremony agreed by their respective members.

Together, the lovers formed CAANZ, an alluring acronym which stands for Chartered Accountants Australia and New Zealand. 

The great promise of this matrimony of professional bodies, as laid down in the nuptial documents, otherwise known as the Explanatory Memorandum to the merger, has not lived up to its vows. 

Perhaps it is a case of haste to the alter. NZICA appeared only borderline solvent before the marriage. It was the ugly duckling which somehow married a swan, albeit a worn out old swan, with sweet talk and forget-me-nots in an Explanatory Memorandum. As the private equity turnaround merchants say: “You only have to look good for the wedding day.” 

Since the nuptials,  the New Zealand bride seems to have been on a frolic with the marital credit card, spending up in the Shaky Isles and apparently taking liberties with joint possessions like the nominations and governance committee, fellowships awards and professional independence.

The above is an extract from a longer and more devastating analysis written by Michael West, an Australian journalist and Associate Professor with Sydney Democracy Network, Sydney University.

Are HMRC scared of witches putting spells on them?

Some years back the Romanian government passed a law to tax the income of witches, fortune tellers, and astrologers.

Associated Press had previously reported that Romanian senators rejected a proposal to tax witches and fortune tellers. The suggestion was that they were scared of hearing those feared words:

"Abracadabra, we'll turn all of you into toads!"

At that time the draft law would have required witches and fortune tellers to produce receipts, and would also have held them liable for wrong predictions!

The BBC then reported that the witches were using cat excrement and dead dogs to cast spells on the government for making them pay income tax. Apparently Magic and superstition in Romania are taken very seriously. The president and his aides wear purple on Thursdays, allegedly to ward off evil spirits.

Somehow I can't imagine HMRC being worried about wrong predictions. They get enough of these from 'experts' ;-)

Bookkeeping and Accounting in 1945

This vocational guidance video shows what it was all about 70 years ago in 1945. It makes clear the distinction between bookkeepers and accountants, and mentions almost in passing their reliance on 'machines'.

The video also distinguishes the work of private accountants, who work in-house and public accountants who have many different clients. In the US they are still called CPAs (Certified Public Accountants). 

Accountants are also responsible for devising new bookkeeping systems and new methods of cost accounting. Accountants who specialise in this area were known as 'efficiency engineers' as an engineering background was very useful.

There's also career advice relevant to anyone considering bookkeeping or accounting (in 1945!)

Loved these quotes: 

"Because his job takes him form place to place, where he meets all kinds of people he must have a pleasing personality to be successful" NB: There is a clear presumption that all accountants were male in those days.

"Perhaps the most colourful accounting work is that of making special investigations". They worked for the FBI.

What's your favourite element of this old video?

What you might say when you're not trying to make partner.....

What follows are some of the more printable observations shared anonymously online by a US based accountant who describes himself as "a cynical Big 4 audit manager. I love my staff, I love my seniors, I hate this profession. I am not on the partner track."

He also admits to being drunk when he wrote the lengthy post which includes such intriguing observations as:

• I've made it to Manager by pretty much keeping my head down and playing the game. I have a respect for accounting theory and knowledge. I just no longer give a shit about all the other stuff that accompanies it.
• I'm convinced the biggest strategy for the Big 4 getting past PCAOB inspections is to over-document EVERYTHING. Memos for any and everything. F**king huge-ass memos filled with fluff language. They'll take one look at that 23-page Word file and nope the f**k out of it.
• I do respect the knowledge base we have. There are some very intelligent people in our profession.
• I hate office lingo: "Touch base", "shoot an e-mail", "let's table that discussion".
• I wish there were more culturally and politically liberal people in our profession.
• One of the most valuable 'soft' skills you can develop is public speaking.
• Masturbation is a close second.

An accountant who knows nothing about their client

Rapper star 50 Cent, real name Curtis Jackson, called his accountant to Court in the US to testify

about his finances. But she knew little more about them than he did.

Jackson has already filed for bankruptcy after a jury awarded a $5million penalty against him after deciding he violated a woman's privacy by posting her private sex-tape video online.

A further penalty was in prospect and the amount would depend on Jackson's net worth. He called his accountant to give evidence to support claims his net assets came to less than $5m. Other estimates suggest a figure well over $100m.

The Californian accountant, who, it transpired has never actually met or spoken with her famous client, is employed by his business managers.  She didn't cope well on the stand and said that she doesn't know:

• who bought the rights when 50 Cent recently sold some of his music catalog for $3 million. 
• whether the $29 million that 50 Cent loaned to various businesses is recoverable. 
• how much money he makes from executive-producing the TV show 'Power'. 
• how many drivers he has on his payroll.
• how any value could be attributed to new partnerships between his headphone company and Disney, Marvel, Lucasfilm, Intel and Reebok because they could “go nowhere and make no money,” 
• how much money he made from a recent underwear-endorsement deal. 
• that he had recently listed his 21-bedroom Connecticut mansion online for $11 million.
• how much money 50 Cent makes from music royalties on the $38 millions worth of records he has sold.

You'd have thought she might have anticipated such questions and checked out the information beforehand. If only to retain some professional credibility. As it is she was a laughing stock.

Outrageous pop stars do it to avoid tax

The Swedish pop group Abba are reported to have admitted in a book, that the outrageous outfits they wore on stage in their heydey were chosen to avoid tax.

It seems the Swedish tax code is similar to that of the UK when it comes to claiming tax relief for clothing. To ensure that their stage outfits were allowable deductions the costumes had to be so outrageous that they couldn't be worn on the street. Apparently many Swedish bands made as habit of dressing as flamboyantly as possible.

Reflecting on the group's sartorial record in a new book, Björn Ulvaeus said: "In my honest opinion we looked like nuts in those years. Nobody can have been as badly dressed on stage as we were."

Clearly Bjorn has forgotten about the British glam rockers of the 1970s - many of whom wore equally outrageous outfits.  I'm thinking of the Sweet, T-Rex, Slade - there are many such examples from my youth. Who'd have thought they chose their outfits to avoid tax?!

And, even though this is my 'lighter side' blog, I should stress two points:

1. I doubt that the facility to deduct the cost of stage costumes from their earnings was uppermost in many minds at the time - other than perhaps that of Abba. 
2. Why are the media reporting this as tax avoidance anyway? All the band did was to ensure that there could be no argument that their stage clothes qualified for tax relief. Any sensible person does the same thing as regards all genuine business expenses.

A cheesy way to avoid tax....

The mountains of the Savoie region are home to Reblochon, the famous French washed rind cheese.

The name “Reblochon” comes from the French verb “reblocher”, which we have no English equivalent for, but roughly translates to: “The act of pinching a cow’s udders.”

In the Middle-Ages, farmers in the mountains of Haute Savoie used to pay their taxes with part of their milk production. In order to bring their production levels down, the farmers wouldn’t fully milk their cows. Once the tax officers came to measure the milk produced and left, the farmers went back to milk the cows again. In between milkings, the milk would culture, making it much richer and giving it more depth of flavor.

Today Reblochon is still made using partially cultured milk, but no longer as a means of tax evasion.

Credit for this piece of cheesy tax avoidance history goes to Great Ciao a Minnesota based provider of artisan produced cheese

Professional skepticism

In June 2007 the Zootopia Theatre Company presented the New York premiere of Professional Skepticism by James Rasheed.

The following description is from the show's press release: "The play centers on four auditors at a Big Five CPA firm in Charleston, South Carolina, and their daily struggle to survive while swimming with sharks. An audit scandal threatens to change these characters into headline-making personalities."

Written before scandals enveloped Enron, Worldcom and Arthur Anderson, the play has apparently assumed new stature in light of these events. Critics applauded the play's sharp, funny dialogue and how it presents quantitative issues with such clarity that even mathematically-challenged audience members can feel as smart as the sharpest pinstripe CPA.

If you want to know more - here's a full review of Professional Skepticism.

Accountant's love of excel leads to a new video game

We all know that accountants love spreadsheets, but a Canadian Chartered Accountant, Cary Walkin, has taken this passion to a new level. He has created a basic video game using only Excel spreadsheets.

The game, called Arena.XIsm is a turn-based fantasy game in which you, the hero represented by a smiley face, fight various monsters in order to level up and survive.

Mr Walkin said it took about four months to create the game which has about 2,000 possible enemies, eight tough encounters with bosses and lots of different items players can gather to boost their fighting or defensive abilities.

You can download the game from Cary Walkin’s blog. It works on PC versions of Excel, including Excel 2007 and 2013, but not on Macs (shame).

IRS training video spoofs star trek

I hesitated to link to this here as the spoof is so bad.....




It starts:

"Space: the final frontier
These are the voyagers of the Starship Enterprise Y
Its never-ending mission is to seek out new tax forms
To explore strange new regulations
To boldly go where no government employee has gone before."

The six-minute plot that follows is simple: The Enterprise must help the planet “No-tax” that is plagued with money laundering, tax evasion using off-planet accounts and alien identity theft – all due to a “lack of tax leaders.”

The Internal Revenue Service (IRS) now admits it was a mistake to spend $60,000 producing the video parodying the 1960s Star Trek television series, along with a second 'Gilligan’s Island' parody. The Star Trek segment was used to open a 2010 training and leadership conference.

Criticised for wasting taxpayers money when the video became public in 2013, the IRS issued a statement that reads:

"The space parody video from 2010 is not reflective of overall IRS video efforts, which provide critical information to taxpayers and cost-effective employee training critical to running the nation's tax system. In addition, the IRS has instituted tough new standards for videos to prevent situations similar to the 2010 video."

ScoobyDoo at work for KPMG (allegedly)

The photo below appears on the GoingConcern blog.  It is accompanied by a series of comments purporting to evidence that the guy wearing the costume works for KPMG in the US and was allowed to dress up for Halloween this year.

The 'evidence' includes:
1. The laptop is clearly some PC jalopy that a public accounting firm would issue to an auditor.
2. The enormous USB capable 10-key calculator is something an auditor would schlep around.
3. Crude, soulless conference room is one where clients would obviously stick an auditor.
4. The black pen at the bottom of the screen is standard issue for Big 4 firms.
5. The little colored flags on papers to Scoob's right are a favorite of many auditors.
6. Scooby has a KPMG standard "T&E" envelope in front of his laptop.
7. That cardboard box is how KPMG employees receive their business cards.
8. Judging by the T&E envelope, laptop, and 10-key, this definitely is a KPMG person.

MGO are "Proud to be boring accountants"

Boring may be Optional but MGO, a top 100 accounting firm in Sacramento, California, celebrate the fact that they (claim to be) Boring. And have been for 25 years. They explain how being Boring benefits clients, they introduce their Boring Partners and have a self proclaimed Boring Mission.

Of course in so doing they stand out as being very different and anything BUT Boring. Nice one!

[EDIT: This post dates back to 2012. The online refs to MGO as boring accountants seemed to stop shortly thereafter. There is so such reference on their current website in 2023 ;-)]

3 weird US tax deductions

1. In Alabama, you can still deduct $1,000 for building a radioactive fallout shelter.
2. In Arkansas, blind combat veterans may buy a new car every two years tax free.
3. In Hawaii, residents can claim a $3,000 deduction for taking care of "exceptional trees" on their property - as long as an expert deems them "exceptional."

Credit due to: The Atlantic (and thanks to Steve Odem for passing this onto me).

How to value something that can't be sold

I am indebted to that doyen of the UK tax world, Robert Maas who has written about this on his blog. I will simply summarise the issue here.

The case involved the need to impute a market value to a work of art called “Canyon” by Robert Rauschenberg. This is a collage. Unfortunately it incorporates a stuffed bald eagle. It is a criminal offence in America to sell a bald eagle under the Bald and Golden Eagle Protection Act 1940.

The owner didn't sell it but, when she died, the question was what value to place on the collage?

Three separate art appraisers told the executors that “Canyon” is valueless as all that the owner can do with it is gift it to a US art gallery. The IRS disagree. They say, apparently, that the executors should be able to find a reclusive Chinese billionaire who would buy the artwork on the black market and smuggle it out of the USA in order to hide it away. On this basis the IRS value the artwork at $65million. They are also apparently seeking a $11.7million penalty for “gross valuation misstatement” even though the executors accepted the unanimous view of three separate professional valuers that the artwork had a nil value!

Not so much a tax funny as a bizare true story, worth sharing I thought. If you agree do read the full story on Robert's blog.

Proposal for a Mustached American Tax Incentive

The American Mustache Institute, an organization that has tasked itself with protecting the rights of and fighting discrimination against mustached Americans by promoting the growth, care, and culture of the mustache, has proposed a $250 tax deduction for the cost of mustache grooming supplies.

The so-called “Stache Act” is based on a paper by Dr. John Yeutter from Northeastern State University titled “Mustached Americans and the Triple Bottom Line: An Analysis of the Impact of the Mustache on Modern Society and a Proposal for a Mustached American Tax Incentive.”

In the paper, Dr. Yeutter examines the environmental, social, and economic impact of the growth and maintenance of labia secuculas (Latin for “lip sweaters”). He concludes that “stached” Americans should be provided an itemized deduction for expenses exceeding 2 percent of their adjusted gross income.

Some of the expenses listed in the paper include:

• Mustache and beard trimming instruments
• Mustache wax and weightless conditioning agents
• DVD collections of “Magnum P.I.” and “Smokey & the Bandit”
• Burt Reynolds wallet-sized photos

Tax dispute of the week: Snakes in the office

What do you if you don't want to pay your tax bill?
Protests against the Indian tax system turned venomous this week when an angry snake charmer dumped three bags of around 40 poisonous snakes at officials' feet in his local tax office.

Whilst we might think is unusual the media reports of the story have such varying details that I'm wondering if it happened more than once.

Depending on which report you read there was one person or three. He/they dumped three bags in a tax office or a registry office in Basti or in Harraiya (both of which are in Northern India)

Should tax advisers abide by a dress code?

A correspondent wrote to the FT's Dear Lucy's column in July about dress codes referencing a particularly 'tight dress' she had been advised not to wear.

In her reply, columnist Lucy Kellaway included this reference to female tax advisers:

"Depending on the country and line of business you are in, the dress may be OK – or not. It’s all pretty arbitrary. We tolerate less flesh from the person who is doing our tax returns than from the person who is cutting our hair. Stupid, really; but that’s the way it goes."

The picture I've attached to this piece is of Britt Savage from the Nashville band Twang Deluxe who shredded a pile of tax forms to make the dress you see her wearing!