Last week a Santa Barbara CPA by the name of Steve Pybrum was sentenced to three years in prison after he was convicted of "filing false individual income tax returns." You see, Mr. Byrum was operating your run-of-the-mill "full service CPA firm" called Pybrum & Company, but he was of the opinion that his business was really a nonprofit organization Foundation for Harmony and Happiness that provided "financial and conflict resolution to help couples avoid financial disputes." It JUST SO HAPPENED to have a CPA firm inside it. What? Does that sound fishy?
Prosecutors said evidence proved that Pybrum brought in about $380,000 per year as an accountant but instead deposited those receipts into a bank account for his nonprofit charitable organization, the Foundation for Harmony and Happiness.Pybrum supposedly set up the nonprofit to provide financial and conflict resolution to help couples avoid financial disputes, which Pybrum claimed to be the leading cause of divorce. Pybrum did not report hundreds of thousands of dollars in income on his own tax return but instead reported the income had been earned by the nonprofit providing marital counseling.
I know what you're thinking — "This guy is an idiot." And maybe he didn't accurately represent all the nuances of a "foundation" that was really a "for-profit business" but — convictions in a court of law be damned — this press release issued by Mr. Pybrum should help answer any questions you may have:
Pybrum incorporated his business in 1999. Due to the social purpose of his Money and Marriage work that he conducted around the country, after he incorporated, Pybrum made an application to the IRS and was granted a 501(c)(3) status. The charitable work that was to be performed consisted of research, writing, speaking and counseling. The application that was approved, by the IRS, delineated 4 years of expected service revenues from the counseling segment which included tax preparation services and financial planning services.Pybrum not only conducted business counseling with couples and family owned business owners, he also performed all of the other segments of the business that was granted the 501(c) (3) status. Pybrum has put in over 11,000 hours of research, in writing two books "Money and Marriage-Making it Work Together" and "Money and Marriage for Engaged Couples."
Prosecutors said there was no evidence that the foundation actually did any charitable work or earned any money for charitable activities during the four years. They also said the Foundation for Harmony and Happiness was simply a name on a bank account that Pybrum created to avoid paying taxes.
Typically, the IRS doesn't take too kindly to anyone calling their business a nonprofit when you aren't really doing nonprofit-y things and this case is no exception. Pybrum, however, is trying to get the truth out there through this PR campaign so that everyone can know that his traveling around the country, hyping a book, talking to troubled couples, doing research for said book, etc. etc. is something that he was doing for the good of the world, NOT for the purposes of "[paying] personal expenses, including renting space in a Montecito mansion and buying an airplane, fishing boat and SUV."
But never mind all those distracting specifics. The press release explains further:
Many authors and speakers have similar Foundations, the most notable one is the Clinton Foundation, with its 300 million dollar surplus.
Now this brave American Author faces a prison sentence after becoming attacked by the IRS.If you want to help in this matter please contact another brave American John McCain, John_McCain@mccain.senate.gov.