MODESTO — Now that the April 15 tax deadline is past, Modesto resident and certified public accountant John Bettencourt can breathe a little easier.
Bettencourt, a senior tax partner at Atherton & Associates, has been with the firm for about 41 years. He specializes in tax and litigation support, with an emphasis on farmers, real estate transactions including exchanges, IRS audits and troubleshooting difficult issues.
His business was one of the few in Modesto that didn't experience severe belt-tightening or massive layoffs during the financial downturn.
"We have been very blessed in this economy," he said. "Though I have had fears of a downturn for us, we really are one of the few businesses that was not hurt by this recession in any of the last four years."
He spoke to The Bee about taxes, the economy and what can be done at the local, state and federal levels to improve the financial picture.
Q: As many folks heave a sigh of relief for getting through another April 15 deadline, can you share the best way that many of us can use to reduce our tax liability for 2013?
A: I don't know there is a best way to reduce tax liabilities, other than be organized with your records. For most taxpayers, especially individuals, it would be good to place your tax records somewhere where they are easily recoverable. Don't believe in the "quick fix" and "guaranteed refunds" people. A lot of them are not interested in you, but only interested in lining their pockets, and will be gone when the IRS comes knocking. If you get a refund, it will be based on what you paid in during the year and the other items on your return.
Q: What's the most common error people make on their taxes?
A: It is hard to say what the most common error would be the IRS might have statistics on this. I can tell you the saddest thing I've seen: Hard workers going to a preparer who grossly falsifies deductions (usually contributions and miscellaneous deductions), and then they tell their friends to go to the same place. They get a big refund for a year or two, and then the IRS audits them and their friends, and their lives are messed up for five years. Sometimes you can help them unwind that problem, but usually there is no easy solution. If your return doesn't make sense, take a hard look at it, and make sure you are comfortable with the information on the return.
Q: What's the most important tax tip you can give to Bee readers?
A: Returns are so wide-ranging that a one-size-fits-all tip is not practical. But most families with children should check to see if they are eligible for the child care credit when both spouses work; tuition credits if you have a child or adult going to school; and if they are eligible for the child dependent credit.
Q: Do you have a favorite true story about someone and their taxes?
A: One of the best is about the toughest revenue officer in the area who turned out to be a hero. A new client came into my office, and because of an ex-spouse, she owed a tremendous amount of money and was making monthly payments to the IRS. The revenue officer handling the case, who was tough as nails but fair, thought the woman was being honest with them and doing the best she could. Most options to reduce the liability weren't viable, but I had promised to try and help her.
I found one piece of paper that was inconsistent with everything else. I took it to the revenue officer all he had to do was say the document was an error and didn't change anything. Instead he said, "Let me pass this by my supervisor." He did follow through, and when he was done, it was determined that the woman didn't owe any of the tax liability. This man, because of his integrity, gave this person's life back to her.
Q: Your firm sent letters warning about the "fiscal cliff" months before anyone else was talking about it. How do you feel about the action-inaction the government took on that?
A: I think both political parties need to take responsibility. I nicknamed the fiscal cliff the "fiscal molehill" because what the government tends to do is find a quick fix (not solve the problem) and kick the problem down the road. In the end, the problem gets tougher to deal with and not easier.
Q: What would you like to see the federal and state governments do to improve our economy?
A: I think they have to deal with real issues. There is too much "you are the bad guy, and I am the hero" in our political system. Problems need to be dealt with and resolved. I do understand it is not easy to do that. That is what statesmen (not politicians) do. We need more statesmen in the system. We have a need for pension reform, tort reform, solving health care costs in a fair way. Also, political contribution reform is a necessity.
Q: What's the single most important issue that will improve the economy here in Modesto?
A: I don't know that I have an easy answer, but since the economy is often compared to the difficult economy in the Appalachian Mountains, a Federal Enterprise Zone in this area could be a tremendous benefit to encourage businesses to come into this area and improve the economy.
Q: Is your faith an important part of your life? If so, how does it impact your career?
A: Yes, my faith is important to my life. When you try to live by your faith and I will be the first to admit I'm not perfect by its nature, it gives you core values to live by, both in life and in your career. It's not about being right, it's about getting it right.
Q: Do you have anything else you'd like to share about taxes, the economy or something else?
A: John Wooden, the great basketball coach (he was a much greater man than a coach), wrote several books. Reading one of them would be a great learning experience for anyone, and just might help a person have a little more wisdom in life.
Bee staff writer Sue Nowicki can be reached at firstname.lastname@example.org or (209) 578-2012.