CROW, SHIELDS & BAILEY, PC

VOLUME 2 ISSUE 7

Fall 2001

America's Junior Miss Program

For the seventh straight year Crow, Shields and Bailey, PC was the official accounting firm for the America's Junior Miss Program. As such, CS&B provides two certified public accountants for each of the preliminary programs and for the night of the finals. Our intrepid CPAs sit at the foot of the judges (literally) and provide the official tabulations of the scores for each contestant. Although it may sound like fun, there is a great deal of work that goes into preparation and planning for these three nights. Each year we spend approximately 50 hours of time as our contribution to this nationally known community event.

The biggest concern among the CPAs is that the laptop computer will suddenly go down or that there will be a tie with only limited time to inform the judges and have them vote on a tiebreaker. Even though it can get a bit stressful during certain times of the program, America's Junior Miss offers CS&B the opportunity to give back to the community and also meet some very interesting people. Through seven years of involvement with America's Junior Miss, CS&B has not given the title to the wrong girl yet!

Economists, analysts, and business experts are using the Uword -"uncertainty" - in describing what lies ahead. Even so, they believe the resulting economic impact of a war will not be significant long term, and they urge businesses to resolve to get through these tough times.

Here are ten general tips for getting your business through uncertain times:

1. Stay as informed as possible about economic indicators and relevant world news. Knowledge is power in uncertain times; you need to make decisions with the best information available. Consumer confidence, consumer spending and retail sales reports are good barometers of the consumer mood. Layoffs at major corporations have ripple effects through industries and regions; rumors and announcements should be duly noted.

2. Take command of your costs. Small businesses can control spending much easier than large businesses. Now is the time to find areas to streamline, reexamine your spending priorities and justify new hiring, travel plans and major purchases.

3. Manage your cash flow aggressively. This point is forever made, in good times and bad. Poor cash flow is one of the biggest reasons that businesses go under. When times get tough customers pay less promptly, and you need to become smarter and more aggressive about collecting the money you are owed.

4. Don't overlook good opportunities for loans or bargains. Now might be a good time to negotiate a long-term loan or a line of credit for your business. With another rate cut by the Federal Reserve, financial firms have money to lend. It also might be a good time to negotiate a lease on your office or retail space.

5. Upgrade your technology security (back up your data!). The war on terrorism is likely to bring about increased "cyberterrorism", including viruses. You don't want to lose valuable business data because you failed to take the necessary precautions.

6. Upgrade your tech skills, and make better use of the Web. If you have fallen behind your tech-savvy competition, now may be a chance to play catch up. Many small businesses are still not using the Web.

7. Look into business disruption insurance. Small businesses throughout the country were impacted by the terrorist attacks. They lost valuable business time and revenue. With business disruption insurance you may be covered for such losses.

8. It's an employer’s market again; don't be afraid to hire (or fire) people. A lot of smart talented people are looking for work, many of them victims of corporate downsizing. The labor pool is as good as it may get for some time. Maybe you need to cut staff. That is unfortunate, but certainly a reality in difficult times. Have you done your best to cross train and make the best use of your employees?

9. Be visible and patriotic. Use any extra time to promote your business. Volunteering your time, donating products or services, getting involved in community events, show pride in your company and the community.

10. Maintain your sense of humanity. Make the extra effort to show you value your customers. Accommodate the special needs of people as best as you can. Remember we are all in this together.

• We will be honest, up front and truthful with our clients at all times.
• We will guarantee our work. Clients must be totally delighted with our services or we will refund the fee.
• We will not surprise clients with fees and billing.
• Our services will rarely, if ever, be the least expensive on the market. However, they will always be the absolute best quality and value.
• We will see our clients within 5 minutes of their appointment time.
• We will acknowledge any communication from clients within 24 hours.
• We will personally greet clients when they visit our office, and offer them a refreshment from our menu.
• Any employee who receives a client request or complaint "owns" it, and follows up on its resolution.
• To meet these standards, every team member of our firm pledges to:
  • create and maintain a positive work environment,
  • be ambassadors of our firm inside and outside of the workplace,
  • maintain uncompromising levels of professionalism,
  • use proper telephone etiquette, answering the phone after the second ring, with a smile, and never screening a call,
  • be knowledgeable of the firm, its resources and its mission, and know and own these performance standards.

Ask the Tax Man!

Dear Tax Man, My aunt is very old and more than a little senile. She is also worth a bundle. One of her pet peeves is the estate tax. Heretofore she has adamantly refused to die. I'm serious about this. She doesn't want the government to end up with half of her estate. What a tough old bird she is.

The other day I told Aunt Thrifty (as we call her) that the estate tax is gone, and she is now free to go see her Maker, leaving us her estate free of government encumbrance. Unfortunately, Aunt T reads a lot in addition to watching CNN. She said estate tax repeal is still a long way off.

Tell me Tax Man - has the estate tax been repealed or hasn't it? I love Aunt T (really I do), and I'm not greedy (really I'm not). And I consider myself a patient, but at the same time practical, and of course loving, relative. But doggone it, if she's ready to go, I really want her to have her way. I really do.
Signed, Favorite Niece

Dear Niecey, My oh my. You may be waiting a really long time, for which you have my sympathies, you really do. Because depending on how substantial Aunt T's "bundle" is, she may need to live another eight years or more (but not much more) before her estate can pass free of estate taxes. As you apparently hoped, the estate tax has indeed been repealed. The problem? It's not effective until 2010 - and then just for that year alone unless Congress passes a new law to make the repeal permanent. Absent such new legislation, the estate tax will return like a bad dream in 2011.

The estate tax is imposed generally on the fair market value of all assets owned at the date of death, less liabilities and final expenses. An exemption is allowed, which for this year is $675,000. The exemption increases in 2002 and 2003 to $1 million. In 2004-05, it increases to $1.5 million; in 2006-08 to $2.0 million; and in 2009 to $3.5 million. In 2010, the estate tax is repealed; but assets inherited that year may have a "carryover basis", creating a capital gains tax when sold. And as mentioned, the estate tax returns with a vengeance in 2011, with only a $1 million exemption.

You do not quantify Aunt T's " bundle", which invariably means different things to different folks. But if she's worth more than a couple million, she needs to hang on until 2009 to avoid the estate tax. And if she's worth a lot more, she needs to stick around until 2010. But of course she needs to plan on dying that year. Because if she's still alive on New Year's Eve when the clock strikes midnight to ring in 2011, the boomeranging estate tax could put a substantial dent in your inheritance.

Dear Tax Man, I've been married nearly 30 years to Earl. I heard somebody on the TV last week babbling on about "marriage penalty relief". I say it's about time! There's millions of us out here in need of relief.

I'm wondering, will I be getting another $600 check in the mail? If not, maybe a bigger check, like one of them reparation payments I've heard about? Will the check amount be larger for me 'cause I've put up with Earl for so long? And I need to keep the check away from Earl - he won't spend it on something useful like a new rug; he'll go right out and buy a new scope for his hunting rifle or some other stupid thing like that.
Help me, Rhonda

Dear Rhonda, I'm afraid your impressions of marriage relief are not exactly what Congress had in mind. First, do not try to beat Earl to the mail box every day. There are no more government checks coming - not for marriage relief or anything else.

Secondly, although you can expect some reduction in your tax burden, it won't happen until 2005. And the tax decrease will bear no relationship to the longevity of your marriage to Earl, although that idea does have merit. No, Rhonda, I'm afraid you will be sorely disappointed in the marriage penalty relief provisions of the new tax law. They consist primarily of raising the standard deduction for married couples filing jointly beginning in 2005, with complete phase in not coming until 2009; and increasing the 15% income tax bracket amount that applies to joint filers, also beginning in 2005, with complete phase-in by 2008.

The dollar savings, when fully phased in, can amount to about $1,500 per year. This is far less than the "penalty" that some married couples pay, which can approach $18,000 per year (the additional amount paid compared to two single taxpayers).

So Rhonda, while tax relief is on the way for you and Earl and other married couples, it's still a long way off. And, alas, it won't be that great when it gets here. But when it does, I think Earl should get that rifle scope.

Tax Man is in a slump over recent events on the mainland. His trip south to Chandaleur is on hold as he contemplates the global situation. He sits on the sand at Petis Bois Island, staring across the water and waiting - for what, he isn't sure.

Margi Patel, CPA joined the firm in September and is also a member of our tax team. Margi graduated from UAB in March 2000 and has already passed the CPA exam. She is engaged to Nilam Patel, who is a second-year medical student at the University of South Alabama. Their wedding date is scheduled for June 22, 2002 in Chicago. Margi tells us, "Everyone is invited!"

Randy Bolden was recently elected to serve a two-year term as Dean of the Mobile Chapter of the American Guild of Organists (AGO). AGO is the national professional organization for organists and professional musicians.

Trey Mayhall was elected to serve a three-year term on the Springhill College Board of Trustees, effective September 2001.

Kathy Alford is the proud grandmother of Jacob Edward Peavy, II. Jacob was born on June 20 at 11:14 p.m., weighing 7 lbs. and 12 ozs. His parents, Jake and Katie are quite proud of him.

Adam Alford, son of Kathy Alford, recently graduated from combat medic training at Fort Sam Houston, TX. As an Army reservist, he has been placed in active duty and will serve in the Enduring Freedom conflict. We are so fortunate to have young men such as Adam who are willing to protect our country.

Joey Bailey and Danny Rickert spent most of their free time in the gym during the month of June. Together they coached a team of third graders from St. Ignatius School, including their sons Michael and Patrick, to play in an AAU basketall tournament in Baton Rouge. Hopes were high until the opposing teams walked out with players taller than the coaches! Joey's comment was "We had fun and it was a learning experience." Danny, however, says, "I'm not sure I can take much more fun like that."

Danny appeared to have better luck with the "12 and under" volleyball team he coached in the Alabama Sports Festival. The team, which included his daughter Brittany, went undefeated in the tournament and won the Gold Medal.

The Crow, Shields & Bailey volleyball team placed second in the McGill-Toolen Dirty Dozen Corporate Challenge Volleyball tournament. The CS&B team was made up of old accountants who were new to Dirty Dozen volleyball and young accountants who were too old for the Dirty Dozen.

Jill Shinault will lead one of two delegations traveling to Mobile's Sister City, Havana, Cuba, in early October. The second delegation, organized by the Mobile Area Chamber of Commerce, will be led by Mayor Michael C. Dow. Combined, the two groups will comprise the largest Mobile delegation to Havana since the Sister City Agreement in 1993.