Accounting Firms Grapple With Unprecedented Impact of Coronavirus

For the accounting industry, this has been a tax season like no other in memory.

Typically, the weeks leading up to April 15 are an endless succession of long hours in the office, meeting with clients, gathering tax information, filling out forms.

This year, with the coronavirus wreaking financial havoc on businesses and families, the deadline for filing tax returns postponed and accounting offices largely shut down as people work from home, it’s been something else entirely.

“This time of year used to be filled with those long, hard hours, but you knew there was this clear end of April 15,” said David Goldner, managing partner for Gross Mendelsohn in Baltimore. “Not this year.”

This spring, he said, he and his associates have spent long days talking to clients — online or over the telephone — consulting and strategizing about how to deal with the financial threats COVID-19 has brought.

And the threats are serious. In the past, clients might have needed advice on how to deal with business slowdowns. Now, Goldner said, some are going out of business.

“These are hard times, difficult conversations we’re having,” Goldner said. “People need a friend to talk this out with. That’s what I’m doing, that’s what my partners are doing.”

He added: “We’re all learning this on the fly. This is the craziest environment ever.”

Goldner and his associates at Mendelsohn are not alone. Representatives from other accounting firms in central Maryland agreed that the financial impact of the pandemic, the business losses, the job losses, the stock market crash and the loss of money in retirement accounts and the uncertainty of the future have made their job this spring unlike anything they’ve experienced.

“It’s a different set of concerns,” said Mark R. Cissell, president and CEO of KatzAbosch, an accounting firm with four offices in the area. “It’s created some opportunities for tax breaks, based on federally mandated programs to help taxpayers, but it’s created some havoc.”

Many of his clients, most of whom are middle-market businesses, typically family-owned, and relatively high-income families, “are really hurting because of this pandemic,” he said. “Some of what we are doing is talking people off the ledge, talking about ways maybe to salvage their business.”

Cissell said KatzAbosch advisers, rather than preparing tax forms, this year are spending a lot of time helping clients with such tasks as negotiating better terms for paying down debts; advising them about layoffs, furloughs or other ways to reduce payroll without firing employees; and helping them negotiate the maze of new government tax relief programs.

“To some degree, what we’re doing is really advisory services, trying to work with people to manage the pandemic’s impact,” Cissell said.

Robert N. Carter, a partner with Herzbach, an accounting firm in Owings Mills, said his clients are dealing with “a vast number of tax implications” as a result of the pandemic. But a lot of government-sponsored, short-term fixes have been made available, he said, and his firm is passing them on to clients.

Those quick-fix options now available, he said, include access to immediate payroll tax credits, new loan initiatives and the removal of some limitations on deducting business losses.

“This is a good time for us to strategize with clients and come up with a plan for the sustainability of their organization and to make sure that they are taking advantage of all available resources,” Carter said. “We are doing our best to help (clients) analyze their situations to best navigate our new normal.”

All the accounting firms are doing this without face-to-face meetings, as they would in a normal year. But accounting executives said they were ready for the “new normal” of videoconferences and screen-sharing meetings, which, they say, have advantages.

“I could never have had seven meetings with clients in one afternoon, but I did yesterday,” Goldner said. “In the end, I think this will make us more efficient.”

These days, Goldner said, both the professionals like him and their clients “are trying to figure out how to get through this, how to keep business together. People are scared, but they’re not fatalistic. They’re asking, ‘What do I have to do to move forward?’ That’s the way all the conversations are.”

Cissell said he sees not just clients’ determination to survive but a bit of a silver lining to the situation.

“From a human perspective, I think this may make people feel grateful for what they have,” he said. “It makes you realize that life is short and something can happen to you at any time for no good reason. … From my perspective, it makes you value what you have.”

 

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