"Hello, this is Matt Miller," said Matt Miller, CPA, as he picked up the phone on about the fifth ring. He really didn't know how long it had been ringing. He had been immersed in the innards of an accounting problem and had gradually realized it was ringing, and that his secretary had told him she was going to the post office.

"Mr. Miller, my name is Carol Baker. I got your name from Betty Simpson." Ms. Bakers voice sounded strained.

"Would you by any chance be Dr. Carol Baker?" queried Matt.

"Why yes, I am. Have we met?" Dr. Baker sounded surprised.

"Not that I know of," responded Matt. "You did the anesthesia for a client of mine last year. A farrier by the name of John Sims. He got kicked by a horse."

"Oh yes, I remember that case. He was hurt pretty bad. Do you know how he is doing?" asked the Doctor.

"He seems to be doing fine. He trimmed our donkey last week. He does seem a little more cautious though." responded Matt. "He sure was grateful to you for the way you handled his case. He's more afraid of doctors than horses."

"A lot of men are." The strain had vanished from Dr. Bakers voice.

"How can I help you?" asked Matt.

"I have a tax problem, and I want a second opinion. The IRS is disallowing my sheep deductions, and my CPA doesn't seem to think there is anything we can do about it. Betty Simpson is in my spinning group. She tells me you are pretty good at dealing with the IRS. Do you think you could help me?"

"I can look it over and comment. Beyond that - I don't know. Who is your CPA?"

"Dave Hansen."

"OK if I talk to him?" asked Matt.

"Why do you need to?" countered the Doctor. "I already know what he thinks. I want a fresh opinion."

"You will get a fresh opinion, however I need to know what the facts are and what the problems are. It is quicker and easier if I call Dave and ask him."

"OK. Call me at home tonight and let me know what you found out. My next patient is on the way down and I need to go. My number is in the book." The Doctor was suddenly in a hurry.

"Sure." responded Matt, just before the line went dead.

* * *

"Hi Dave, Matt Miller here."

"Hi Matt. Haven't heard from you in a while. Have a good tax season?" Dave sounded tired.

"About the same as last year. And you?"

"Pretty much the same. What can I do for you?"

"I just got a call from Carol Baker. Apparently the IRS thinks she owes some tax. She wants a second opinion." answered

Matt. "Anything you can tell me?"

"I should talk to her first." responded Dave.

"You probably should, but she's in surgery and I have a pretty strong feeling she is in a hurry."

"She's always in a hurry. What do you want to know?" Dave was obviously not pleased.

"Facts, circumstances, IRS position - and anything else you think I should know."

"Let me pull the file. I'll call you back."

* * *

"Hi Matt, this is Dave." It had been about ten minutes. "I've got the file in front of me. What would you like to know?"

"Has she been audited?"

"Oh yes. It was done here in our office a couple weeks ago. We got their report yesterday. They disallowed a couple minor items on her practice and all of her ranch deductions."

"Do you plan to appeal it?" asked Matt.

"We may have to. I don't think we can win, but Carol doesn't want to pay the tax. Apparently that is why she called you." Dave was becoming increasingly upset. "These doctors make too much money, they don't want to pay their taxes and they get mad when the IRS catches them and forces them to pay. That sheep ranch is a hobby. There is no way the IRS is going to let her deduct those expenses."

"Any chance I could get copies of the returns and the IRS report?" queried Matt.

"I will have to talk to Carol before I do that," responded Dave. "Call me tomorrow."

* * *

"Carol, this is Matt Miller." It was about 8:00 PM.

"Yes Matt, what did you find out?"

"Not a lot. I asked Dave for copies of the returns and the audit report. He wanted to talk to you before he released them. I would like to review them and take a look at your records and your ranch before I say too much."

"He called me. I told him to give you anything you asked for. How long do you think it will take?" asked Carol, somewhat anxiously.

"I'll go by Dave's office tomorrow morning. Could I come by your place tomorrow evening?"

"That would be great. See you then." Dr. Baker did not want to make small talk.

* * *

Matt was confronted by two huge white dogs as his pickup rolled to a stop in the Baker yard. The larger of the two dogs barked loudly a couple times and both stood between the pickup and the barn. A slightly overweight middle age man emerged from the barn with a feed pail in his hand. "It's OK, Mare Bear," he said reassuringly to the larger dog, and gave it a gentle scratch on the shoulder. Both dogs sauntered off to a nearby tree and sat on the grass."

"Beautiful dogs," commented Matt.

"Yes, and very effective. Nothing gets into this place unless it is invited. I'm Art Baker. You're Matt Miller?"

Matt nodded.

"Carol said you would be by. She isn't home yet - may not be for a while. Bad pile up on the freeway - she's still in surgery. I understand the IRS is about to bite us."

"They're showing their teeth."

"I assume you would like to look around the place - get some idea of what we are all about," stated Art, rather matter of fact. This was pretty much what Matt expected from Art. Matt had just finished reviewing the Baker's tax returns and knew that Art was a math teacher at the local high school, and that he made roughly one fifth of what his wife made. For the next hour Art treated Matt to a detailed tour of the place. They looked at pasture, sheep, buildings and equipment. They talked about ways, means, the past and the future. Art explained that this was a family business, and that it provided a large measure of the glue that held their family together. Both Art and Carol had a prior history of minor alcohol abuse. Maintaining this place helped relieve the stress in their lives, making a withdrawal into substance a lot less likely. Their son, currently a senior in college, had helped with fencing, barn roofing, and other heavy physical items. The brains of the operation, however, were primarily supplied by their daughter, Heidi. She was a third year student at State Teacher's College and came home most weekends to work with the sheep. She had even put her boyfriend to work during the last lambing season.

Matt had asked Art to have Heidi call him, and was preparing to leave when Carol's car came careening down the driveway, abruptly stopping in front of the barn. Carol went straight to Art, grabbed him around the body, buried her head in his shoulder and sobbed. "It was awful! I lost one on the table."

Art held his wife's head and glanced at Matt with a helpless expression. Carol abruptly straightened up, looked at her husband and asked, "Will you help me catch Rub a Dub."

Art looked over his wife's shoulder to Matt and pointed to a feed pail. "Would you toss a little dry feed in the manger?" Art turned and let himself into the ewe's lounging area, followed by his wife. As the ewes aggressively attacked the dry feed, Art deftly picked up a small white lamb and handed it to his wife. She sat on a bale of straw and rubbed her face against it's soft white fleece. She abruptly looked at Matt and blurted, "Damn the IRS. They can't have my Rub a Dub."

Matt looked at the lamb, then at the bale of straw. Now was not the time for a learned dissertation about income tax. "Yes ma'am."

* * *

"Mr. Miller, this is Heidi Baker. My daddy asked me to call you."

"Thanks for calling, Heidi. Do you know about the problem with the IRS?" asked Matt.

"I know they want Mom to pay more tax, and she's upset," responded Heidi.

"I'm a CPA. Your mom has asked me to see if I can do anything about it," said Matt. "Your dad told me that you know a lot about sheep, and that you keep most of the ranch records. He also told me that you do most of the ranch planning. I'd like to meet with you and look at your records. Would that be OK?"

"Sure. I'll be home this weekend."

"Could I come by about noon on Saturday?" asked Matt.

"Sure. That would be fine."

* * *

Matt arrived at the Baker place on Saturday to find Art cleaning the sheep yard with a diesel tractor. Carol and Heidi were trimming hooves and giving shots. The dogs admitted Matt with hardly a glance. Art stopped the tractor and suggested a coffee break. After coffee and small talk, Heidi produced several large loose leaf note books jammed with information and proceeded to overwhelm Matt with their contents. She had a section on each sheep, complete with genealogy, wool samples, shot and health records, and financial data. She had complete records on each animal. She also had written plans as to which ewes would be bred to which rams, and when. Matt was impressed; very impressed. He could hardly wait to turn Heidi loose on an unsuspecting IRS appeals officer. This would be fun.

"Heidi, I brought along summaries that I prepared from your parent's tax returns," stated Matt, handing Heidi a paper containing columns of information. "Do you think you could project what you might do for the next several years?"

Matt then continued, "In order to win this thing, we need to establish a profit motive. We need to convince the IRS that this is more than a hobby. We have to show them that you intend to make a profit."

"Can I get Daddy to help me?" asked Heidi.

"Certainly. I'll also explain what we need to him."

When Heidi's schedules arrived in the mail a few days later Matt found them to be meticulously prepared and very credible. They also projected a profit in the fourth year, after three years of building the flock. Very good.

* * *

"Carol, this is Matt Miller. How are you today?" asked Matt cheerily over the phone.

"A little frazzled. It has been a tough week." Carol seemed hassled. She did not want to make small talk.

"I thought we should review this IRS matter. I've gathered about all the information I can. We need to decide what to do with it." explained Matt.

"Can we win?" Carol was very direct.

"Probably." answered Matt. "No guarantee, but with Heidi's help I think we can do it."

"Then go for it. I'm not going to give those bastards one dime more than I have to." Carol was very clear.

Matt filed the appeal immediately.

* * *

"What are those?" asked Ron Taylor, IRS Appeals Officer, as he pointed to four rolled up sheep pelts lying on his conference room table.

"Sheep pelts," responded Matt Miller, unrolling one and putting it on his chair. "Even your chairs are comfortable with sheep pelts on them." Art and Heidi Baker were busily unrolling pelts for their chairs. "Try one - you might like it," continued Matt, handing Ron a pelt.

Ron was not to sure he liked what was happening. These people were taking over his conference room. He was supposed to be in charge, and he had a nagging feeling that he was being overwhelmed. Nevertheless, he unrolled the pelt and put it on his chair.

"Let me introduce everyone," stated Matt, looking at the Appeals Officer. "This is Art Baker, and the young lady is Heidi Baker. Mrs. Baker was not able to be here." It was the truth - as far as it went. Matt had asked Carol to skip the meeting, which suited Carol just fine.

"As I stated in my letter, we are here to discuss the substance of the sheep ranch. We agree with your auditor regarding the anesthesia practice items." Matt fully intended to control this meeting, and he wanted to start by agreeing where he knew he must. "The Baker's sheep ranch is a family affair. The whole family participates, however Heidi is what we could call the general manager. She has brought her records and some projections I helped her prepare." Matt then looked toward Heidi and nodded.

Heidi handed Ron a copy of her projections, opened her first note book and waited for the officer to acknowledge her. Ron studied the document for a few minutes, looked up at Heidi and nodded. Heidi proceeded with a well thought out dissertation about the sheep business. She started with a description of her sheep and their genealogy. She talked about how and why they fit the niche market she was cultivating. She showed her wool samples, shot and health records, and financial data. She had complete records on each animal, and was obviously prepared to continue for hours. Matt settled back into his chair, thoroughly enjoying the glazed look in the officer's eyes.

"Whoa - stop." blurted Ron, holding up both hands. He picked up his copy of the financial projection, looked at Heidi and asked, "Is this projection realistic. Can you really do this?"

"Yes," answered Heidi, with no hesitation.

"This pelt I'm sitting on - what is it worth?" asked Ron.

"One hundred dollars," answered Heidi, again with no hesitation.

The officer got up and left the room. He returned in a few minutes with his personal check for $100. "I'm accepting your sheep ranch. Also, I would like that pelt. Here is a check for $100."

"Well - uh - thanks," said Heidi, accepting the check.

"However," continued Ron, "I'm going to personally pull this file next year, and there had better be at least $100 of income on your schedule F. Have a nice day."

* * * - - - * * *

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