Always pay up, folks!

That goes for a lot of things in life, and paying your account is definitely one of those things.

A Reddit user talked about what happened to one of his accountant friends and how he ended up getting revenge on a client who was trying to play games with him.

You should always pay your accountant, especially if your got skeletons in your closet.

“My buddy is an accountant, he has his own firm. His biggest clients are small to medium sized businesses.

Well he had a client who owned 4 different clubs/bars in 2 different cities. Client was always shady, always slow on payment, etc. I was also a customer of one of the bars, they had poker game that I would play in on Thursdays.

It seems like the big client wasn’t too keen on paying his bills…but he should have been.

Well one day I’m at my buddy house, having a few beers and he’s complaining about non payment from a client. I ask who, he doesn’t wanna say. But its really bugging him because its a significant chunk of change. He then says the name, we’ll call him Scott.

I’m like “Wow Scott isn’t paying you?” he then says Scott is saying business is way down and I think that’s odd I’ve been going to one Scott place and every Thursday is packed. My buddy looks at me and goes “really?” I go “Yea he does this new cash discount think, 15% off your tab if you pay cash” my buddy goes “Really?”

I tell him about my experience at Scott’s bar, and eventually the topic changes. A few weeks later my buddy calls me up and says “you going to Scotts bar to play poker?” I said “Yea” he says “can I join?” I go “Sure”

So off they went…and they had a plan in mind.

He joins, we get a few drinks in us, lose our money at poker, my house is closer he decides to crash there. On the way over he breaks down his theory

He thinks Scott is vastly under reporting his revenue, the reason why he suspects Scott is offering cash discount is cause cash is easier to hide. He says he’s going do a deep dive on Scotts finances.

My friend tells me his plan is to go all 4 of Scotts establishments, get the prices he charges at each place, pieces together how much alcohol he’s buying, vs how much Scott is saying his revenue equates too. He looks up how much Scott is paying in payroll, rent, bills, etc. Keep in mind he has access to all this info.

And he determines that Scott is basically using his credit card receipts + a little bit of cash to cover his cost of his business to include rent, payroll, insurance, liquor, food, etc….however based upon the amount of products he’s selling he’s suspecting Scott is under reporting his total income by about 35%-40%.

It seems like Scott might be in some pretty hot water…and that’s never good when you’re talking about money and accounting.

He goes back into Scotts books even more, and he figures in the last year Scott has been under reporting his sales by 35%-40% but he’s also been under reporting his sales by at least 20%-25% for years on end. Simply put there is no way Scott is going through as much product, and as much alcohol as he’s purchasing and having the revenue numbers that’s he’s claiming, he’s under reporting his sales to his accountant…

Which means he’s also under reporting his earnings to the IRS. By this point Scott owes my friend thousands of dollars that he hasn’t paid. He said his total amount owe could buy a brand new motorcycle. He never gave me an exact number.

So his friend decided to take action.

My friend decides, forget about getting repayment from Scott, lets get repayment from the IRS through the whistleblower program. He’s estimating Scotts under reported his revenue by millions of dollars over the course of years. The whistle blower fees he’d earn form the IRS far out weighs the amount Scott owes him. The IRS will pay between 15-30% of what they collect.

So with the assistance of a lawyer my friend gathers all the evidence he has has Scotts under reporting to the IRS and files a whistle blower report with the IRS. During this time my friend fires Scott as a client for non payment. Now this part gets boring cause there’s a lot of legal wrangling and back and forth, this went back and forth.

And Scott was not going to be let off lightly.

However eventually the IRS comes down on Scott, and they come down hard. Its estimated that Scott under reported his income to the IRS by about $4.5 million dollars.

Now my friend never told me how much the IRS was able to recoup, but Scotts businesses are no longer his businesses, and $4.5 million dollars would put the whistle blower reward at $675k-$1.3 million. Keep in mind its based on what the IRS collects, not the amount that’s reported.

And it seems like it worked out just fine for his friend, the accountant.

I’ve asked my friend how much he got in the end, and he’s simply says “I no longer have a mortgage, and it would have been much cheaper for Scott to just pay me”.”

Let’s see what people had to say about this.

This person learned a lesson from this story.

Another individual said you should never mess with an accountant.

This reader laid out exactly what folks need to do.

One reader said you always gotta pay up on time!

And one Reddit user said people might even want to pay their accountants double.

Something to think about…

A word to the wise…don’t mess with the IRS.

It’ll never work out well for you!