Clients ask us to solve complicated problems, often when they have no idea of how to proceed on their own. We pride ourselves in meeting and exceeding their expectations, and this was particularly evident in one engagement when SCG was challenged to find a creative solution by working far “outside of the box”.
In this instance, our client faced sentencing in a federal fraud matter and had not filed tax returns on numerous business entities for years. Typical of fraud cases, our client failed to maintain proper books and records, regularly rotated semi-competent accounting professionals and executed thousands of inter-company transfers. SCG was therefore tasked with finding, sorting and eventually analyzing thousands of documents in varying formats from multiple sources to prepare and file seven years of tax returns.
The first and largest phase of our work was dedicated to gathering and organizing the client’s data into a structure that would serve as support for the returns and the inevitable IRS audit. This involved the review of more than 1,000,000 pages of documentation. Once we determined which documents were relevant, we stratified the financial information by highest level of support. With the best-supported financial data in hand, we built trial balances that would be the basis for the returns. Throughout the engagement, we worked hand-in-hand with a consulting tax expert who eventually signed the returns and met with the IRS for the audit. The returns were successfully filed prior to the pre-sentencing deadline and our client received a dramatically reduced sentence. The IRS did come calling and the tax consultant used our file structure to help walk them through the returns. All returns passed audit and the IRS case is closed.
Usually, we are charged with finding and prosecuting the “bad guy”, so this was certainly a different perspective for SCG. As in all our cases, we grew to know this client over the course of time and came to see they were sincerely contrite. Though fraud perpetrators never think that their actions will come back to haunt them down the road, this process provided clarity for our client who subsequently admitted guilt, made full restitution and served time in a federal correctional facility. This former client is now a very productive member of society. SCG is glad we were there to help in a tremendously difficult and chaotic time.