VOL. 11 | NO. 6 | Saturday, February 10, 2018
Glassman to Tax Pros: Take a Lesson From the Tortoise, Not the Hare
By Don Wade
Richard Glassman’s spacious office in Downtown Memphis is cluttered like a closet, but holds the history of a museum. Everything from a cap signed by actor Tom Cruise back when “The Firm” was being filmed in Memphis, to a framed and autographed No. 45 Michael Jordan Chicago Bulls jersey, to a stuffed cobra positioned under his desk, looking ready to pounce.
The snake was a gift from Glassman’s first $1 million client.
“She said that snake reminded her of me,” he said.
Attorney Richard Glassman, senior shareholder and president of Glassman, Wyatt, Tuttle & Cox P.C., says accountants can safeguard against malpractice suits by slowing down and asking for help when needed. (Memphis News/Houston Cofield)
Glassman is senior shareholder and president of Glassman, Wyatt, Tuttle and Cox P.C. He has been at this lawyering business since the early 1970s. But just so you don’t get the wrong impression, his office also holds multiple pictures from Glassman’s recent trip to Dubai. With a young man named William Terrell who has become an attorney and remains a friend; the two met through the Big Brothers Big Sisters program and Terrell even lived with Glassman and his family.
The secret Glassman doesn’t want told because he has a lawyer’s reputation to protect? He can be a pretty nice guy.
Recently, he was kind enough to sit down with The Memphis News for a Q&A on his area of expertise: professional malpractice, including accounting, legal and medical malpractice, as well as real estate, dental and architectural malpractice, among others.
Glassman has tried more than 250 jury cases as lead counsel and deposed more than 2,000 fact and expert witnesses. He is a graduate of the University of Memphis Cecil C. Humphreys School of Law and Hastings College of Law in San Francisco.
Answers to questions were edited only for length and clarity.
Q. Where do accountants, for example, tend to find trouble and need the services of someone such as yourself?
Glassman: Not just accountants, I think it’s across the board that professionals tend not to ask for help. When they think, but they’re not sure, they may have made an error, that’s the time to reach out to somebody. Even if it’s just somebody in your own office, a different set of eyes may see it differently and you may be able to correct the mistake before it can’t be remedied.
Q. It sounds like they get caught off guard in some instances?
Glassman: At seminars I’ve done for lawyers and accountants, I’ll say that if you made a mistake what you do next is important because you don’t want to hide it from your client. Because then it appears to be a cover-up. You want to be totally transparent with your client. If you need help from someone else, that’s where professionals don’t want to (reach out) because there’s such a keen competition for business. You don’t want to take your client to someone else because then who they are going to use the next time? The one you used to fix it. But we don’t take business that would come to us that way.
Q. We’re into tax season. Obviously there’s a deadline, something journalists can appreciate. Does that pose problems?
Glassman: With accountants, part of what happens is they have this crunch time. We lawyers have a year to work. Accountants have this April 15 deadline and are swamped and don’t see the light of day. That can create some issues. But accountants, the ones I’ve dealt with – and one of my daughters is an accountant in Washington, D.C. – are very dedicated. You have to be to work the hours they work. Generally, it’s the more complicated returns where you see issues come up.
Q. What’s an example of a complicated return?
Glassman: An ESOP (Employee Stock Ownership Plan), where the employees of a corporation are buying the entity from the owner. There are valuation issues there that are very important to the Internal Revenue Service to protect the employees from being taking advantage of by the owner. That has been the subject of a fair amount of litigation and a fair amount of investigation by the Department of Labor. In real estate, really large holdings, there have been issues at times because of changes in law and valuation, trying to take more deductions than you should. Because the taxpayer always wants to take as much deduction as possible, the tax preparer always wants to do things within the confines of the Internal Revenue code and therein lies a little bit of a conflict sometimes.
Q. And time could be a factor in these situations?
Glassman: Lawyers come out of law school waiting to last minute to do everything. Accountants are the same way. We’ve had situations where we were handling matters for accountants, and they waited too long and missed a deadline – not filing the return on time, not fully listing assets. It’s a problem.
Q. How have things changed since the 1970s, when you started?
Glassman: Suits against accountants are rare. But going back to the ’70s, it didn’t exist. Suits against lawyers, suits against accountants … you didn’t see any. It’s just within the last 15 years that it’s become more commonplace to sue professionals. Of course, there’s been a huge increase in medical negligence lawsuits.
Q. Do the new federal tax laws pose some potential problems?
Glassman: I don’t think anybody is quite sure what we’re about to get. There are some things that are very easy for tax reduction. It was X and now it’s Y. But there are some other nuances that are a little bit more difficult. Pass-through. Income. And things of that nature. The IRS is going to have to help tell the tax preparers what it means.
Q. Until the IRS provides more clarity, do you expect professionals to push the envelope?
Glassman: That’s true in any business. … If it’s allowed and can increase your profits or help your customers, why not? As long as it’s legal. Where that line is can sometimes be gray.
Q. The cost isn’t gray once you go to trial, though, is it?
Glassman: I have tried a couple of accounting malpractice cases and it can be tremendously expensive, expert-driven. Detail-driven. You’re not gonna get out for less than $50,000, and that would be real frugal. Had a case that went on 4 1/2 months. Very complicated fight between optometrists and ophthalmologists. There were so many lawyers the judge had to redo the configuration of the courtroom. Total hourly rate of all the lawyers in that court room was $5,000 to $7,000 an hour.
Q. So what’s your general advice for accountants and other professionals, especially this time of year when there is that April 15 deadline looming?
Glassman: Slow down. Pay attention. Meet deadlines. Pretty basic. If you get going too fast, trying to serve too many customers, quality could – not necessarily will, but could – be affected.
Q. Any other safeguards?
Glassman: In accounting, if the work was reviewed by a peer – and accountants have that available – it’s pretty solid that you got it right. Even if something happens later on and somebody else says you got it wrong, what else could you have done? So that’s something that a lot of accountants don’t take advantage of. It does increase the cost for the clients, but it is a way to take an extra step to ensure the work is accurate.