The cautionary tales of outlandish tax evaders and executives who build their empires on shoddy accounting have always had their fair share of big names.
It's out of those more recent scandals that the accounting profession has seen its ranks swell and the business pages have seen a corresponding surge in media accounts of the CPA as the new hot, sexy degree for college graduates. That attempt at gaining some street cred -- whether born of a public relations push, or the media's need for a new angle -- looks like it might finally be turning the corner from fluffy feature story to harder news.
In the past month, WebCPA has published a couple of fairly unusual stories for the accounting scene, one featuring tough tax penalties for pimps and a second starring a notorious record label founder who built his empire off the hits of Snoop Doggy Dogg.
Last month, the infamous "pimp tax" was pushed through the Senate Finance Committee by its chairman, Sen. Charles Grassley, R-Iowa. The bill would empower the Internal Revenue Service to hit sex traffickers with major fines and lengthy prison sentences for failing to file employment paperwork and withhold taxes for the women and girls under their command.
And just last Friday, a federal bankruptcy court judge handed control of Marion "Suge" Knight 's Death Row Records over to a bankruptcy trustee, pointing to gross mismanagement of the firm's accounting. Knight, famous for many things -- my favorite "Behind the Music" story is rapper Vanilla Ice's now-retracted claim that Knight dangled him out the window of a high-rise building in an attempt to get Ice to sign over a majority of his royalties from "Ice, Ice Baby" -- can add now point to shoddy accounting skills as his ultimate downfall, not his repeated prison stints.
Knight, the founder and chief executive of Death Row, testified in court that he hadn't reviewed the business's financial statements in nearly a decade. The label reportedly has more than $100 million in debts, while its assets are valued somewhere between $1 million and $10 million. Knight already attempted to avoid a receiver liquefying his company, when he filed for bankruptcy protection in April to avoid California State's tax collector.
Fair or not, there's more than one adage of journalism that three stories do make a trend. I'm convinced that pimp taxes and Suge Knight's poor accounting are the start of something for the profession. Now I'm left eagerly scanning my e-mail to see which accounting firm will be the first to openly embrace a niche market that leans a little more towards the gangster life, and keeping an eye open for a press release from the IRS announcing their first hire to be assigned to the pimp patrol. Let's face it, whatever the line of business, wherever there's a cash flow, there should be an accountant there to keep those credits and debits current. Just ask Suge.
