Honesty in Business and Life
Nobody is perfect because survival is sometimes more important. During a homicide investigation, my Detective client told me that most murders are based on sex, money, or both. With these genetic survival instincts [substitute meat for money] now satisfied socially, the equation becomes easier to manage as we become civilized and learn to control our Neanderthal genetic inclinations. It appears that greed is not hereditary and must be an acquired skill.
I bought a small accounting business from a retiring elderly man who repeatedly said that one cannot be a little bit crooked. The guy was incredibly honest although he came from another time in the universe where he learned and practiced ledgers maintained by his fountain pen which were faster than pencil or ball pen. We were a good combination because I was honest and in the following years everybody with a practice to sell was calling me.
Honesty is not merely defined as in a professional ethics course [that is dogma, not real practice], it is formed from parental upbringing, usually with some religious exposure. When my mother visited me at age 85 she took me aside one day to tell me she admired our large beautiful home but wanted assurances that I had lived honestly, not by graft or theft like gangsters and politicians. I looked into her fading blue eyes and truly reported that I had nothing to hide.
I have found in business and life in general that what goes around comes around. It is hard to hide a lie or theft, and harder to hide character flaws. As I learned in the Army, retribution, and revenge are always in store. A person sleeps better knowing there are no problems in the business that cannot be solved intelligently and without worrying about the legal profession grabbing your leg like a shark or alligator and not letting go until they drown you. With this in mind, my short learning curve, when I bought the old man’s business and his integrity, has allowed me to stay in business 40 years, solving my own client technical problems with my little staff. In business today a person must always be looking over his shoulder, “think like a lawyer, to keep away from lawyers” is my phrase for business conduct. It is in my first book, American Independent Business because it works.
A Ford car dealer put the screws to me after I made a substantial deposit on a new car for my wife. They had to deliver the sedan from another dealership because my wife, being just under five feet tall, had trouble reaching the pedals on regular Fords. My wife and I met at the dealership finally, and she couldn’t reach the pedals even though the bench seat was electric. It just wouldn’t go close enough for the driver. The dealer offered to put blocks on the pedals but it was obviously unworkable and illegal. Then I asked for our deposit back. The dealer refused, saying we bought it and were stuck with it even though it was not drivable. We went to court and I lost because the contract was signed and nothing else mattered. Surely, as the sun shines every day, a month later a client presented me with two contracts for a big truck he wanted to buy. One was from the Ford dealership and the other was another dealer. I helped him make a good decision for the more reputable dealer.
A small client, acquired with the practice, was a non-profit with very little in funds, mostly from United Way payroll donations. We simply billed my clerk at her actual wage to pay all their bills, write payroll and reports, balance their bank account, and produce a monthly statement of income and expenses. They were struggling and lost a good manager for one who was totally helpless and expected us to do a lot for the stipend. One day, a large accounting firm in town took over the client to gain some goodwill with their audit clientele. They advised the little non-profit not to pay us. Naturally, we were unhappy and filed a small claim in court. They put a lawyer-client on the board of directors and had her represent them in court. We lost because we were not using “G.A.A.P. Budgeted Financial statements.” Two incidents came out of the lousy court case of several hundred dollars. One was when several years later an executive client with a large National firm called and asked if we knew of a local charity worthy of the $25-$35,000 they allocated each year for local community good will. The answer was no. The attorney on the nasty case was a divorce attorney with an expensive reputation of “no holds barred” for her clients. Years later it would evolve to criminal cases as she made many enemies in town. I received a call one day from a local attorney who informed me that an informal memo had been passed down in the court for new judgeship considerations. It asked for comments on a selected list of attorneys for the prestigious appointment. Somehow the non-profit-lawyer was on the list which asked for quality of reputation and ethics [that word again]. As a result of her bad reputation, she was passed over. And we no longer take bad debt clients to Small Claims Court.
So, we have arrived at professional reputation. Do you win clients and cases because you are the toughest meanest gal or guy in town or because you uphold the law? Do people love or hate you? The choice is yours. My business is based on tax law, not arguing before a jury. I find it easy to go by the book and avoid audits when possible with my tax work. I can argue in Appeals but I need a case first and turn many new clients down because frivolous arguments don’t win cases.
* Phillip B Chute is an Enrolled Agent, tested, licensed, and appointed by the IRS directly. He has prepared or supervised over 25,000 tax returns over 30 years.