Veteran Tax Return Preparer Always Puts Clients First

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Richard Pitts at his busy office in Washington, N.C.

WASHINGTON, N.C. – Sharper than a tack, Richard Pitts, 74, has been preparing tax returns for more than five decades. There may be someone, somewhere, somehow who has a longer track record — but no one anywhere has more concern for a still-growing roster of super loyal clients.

That’s what comes through loud and clear after my fascinating hour-long interview with a legend of the industry. The personable Pitts, owner of the thriving Washington, NC based Pamlico Tax Service, is also a consummate professional. Originally educated as an accountant, Pitts began his career in the Washington, DC metropolitan area, working for one of the biggest of the big – Northrop Grumman.

However, well before any type of career, Pitts looked back to credit his Baltimore-based family  for putting a youngster on the right track.

“When I was raised – and I was born in the 1940s – you got an education, you got a job, and you got a wife. If you wanted to have anything in life, you first had to have an education. Not only did I have good parents, I had good grandparents, and we had good neighbors.”

He concedes that he was indeed one of the lucky ones. An early job with one of the nation’s biggest defense contractors could have been a cushy career. But the young Pitts – this was 1969 – grew a wee bit restless.

“To pick up some extra money, I worked for H&R Block one tax season. Later on, they came to me and asked me to run the branch. I figured if I could manage a branch, I could run my own business. So I began doing tax returns for other people from my dining room table.”

Needless to say, after more than half a century, Pitts has seen a gargantuan shift in how tax returns are prepared.

“I started in this business before there were even electronic calculators. Everything was on paper.

And, it used to be that the instructions would just ask for the first names of any dependents. Now, they ask for full name, date of birth and Social Security number. I did some of the very first electronic filings. We do things accurately and correctly, but from the point of view of the person who does their own returns, my question is always ‘Are you getting the maximum refund?’”

Part of Pitts’ appeal to his steadfast clients comes in the form of tough love. He can be a stern taskmaster. For those who persisted in doing their own returns?  “Well, I often find myself saying to them ‘Call me up and I’ll show you what you could have gotten!’”

OK. Things were going pretty good in the Washington, DC area. All those federal government employees are now leaving their tax returns up to Pitts! So how did Washington, NC, 300 miles away, pop up on his radar screen?

“My brother moved in the 1960s to outside of Wilmington, N.C. so I knew about the area,” said Pitts. “And, when I met my wife, her mother lived here in this area, so every holiday, every vacation – we came down to see her. Well, one Sunday morning, I was on my way to church in DC. I was sitting on the Beltway, and the cars were not moving. It was then that I said to myself ‘What is going on? I’ve had enough of this – I’m heading south!’”

Traffic was not the only thing that Pitts left behind. In Beaufort County and surrounding areas, Pamlico Tax Service sees a vastly different clientele. To put it bluntly: No more clients with six-figure incomes!

“Our clients’ tax returns in the Northeast are different from those here. We don’t do ‘Alternative Minimum Tax’ and items like that, instead we see predominantly women with dependent children,” explained Pitts. “Here we are usually focused on the Earned Income Credit, and whether someone is truly the Head of a Household. We need to determine if the client has support for it. We ask them: ‘Do you meet the IRS guidelines?’ So we can produce documentation that they qualify as a Head of Household.”

Apparently, once a Pitts’ client — always a Pitts’ client!

“We have almost 3,000 clients spread all over the country. One fellow started with me in Maryland, then he moved to West Virginia, then to South Carolina, and finally to Florida –

I did his returns all along the way.”

“We give low income clients the same service that we give our more affluent clients,” said Pitts.  “Here, particularly over the last year, some of these people are desperate. They need their refunds fast because they are on total life support. In 2020, the filing season got extended. It’s ironic but we see the same people who always waited until April 15 were the ones who waited until (the extended deadline) of July 15.”

Year 2020 also forced Pitts and his crew at Pamlico Tax Service to offer an entirely new package of services. Seemingly overnight, people required much-needed advice, counsel, hand-holding, and online applications filed for COVID relief payments – yet another facet of this of this well-honed operation.

“I am proud to say that we played a role in approximately $2.9 million in relief money that got put on the street. We also completed a lot of paperwork for the Paycheck Protection Program.”

Pitts chuckles when he points to a wall of his office. There, neat as a pin, is a framed copy of a simple one-page tax return from 1945, originally filed by a Pitts relative. That leads to a discussion of the nation’s current tax code. Pitts explained the rules and regulations of the IRS have a purpose.

“Today’s returns are usually way too complicated for the average person. The reason is that the

Income Tax Code must work for everybody, whether it is the guy who has stock sales and capital gains, or others. It must be fair and equal for everybody. Every now and then, we see clients who want to take deductions that are questionable. We always ask: Are you able to justify them in case you have an IRS audit?”

“But how about a Flat Tax,” asks this reporter, “where everyone could just pay the same percentage of income and maybe even send it in on a postcard?”

That question elicits the heartiest laughter of the morning from this congenial tax prep veteran.

“Flat Tax?” exclaimed Pitts! “The day I started in business over 50 years ago, we heard rumors about the possibility of a flat tax. Some would probably pay more, and some would not pay enough. I would say you’re not going to see anything like a flat tax anytime over the next 50 years!!”

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