
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SUNDAY, August 29, 1993                   TAG: 9308290014
SECTION: VIRGINIA                    PAGE: B1   EDITION: METRO 
SOURCE: Ed Shamy
DATELINE:                                 LENGTH: Medium

ROANOKE NOTORIOUS AMONG CPAS EVERYWHERE

One of the requirements of being a certified public accountant, and this should come as no surprise, is that the accountant is certified. This certification serves as proof that the accountant is knowledgeable in the art of skirting his own income taxes, while recommending that you pay far more than you owe.

Everything evens out that way.

To keep the certification, accountants are perpetually studying and being recertified and earning more credits. It sounds boring and time-consuming, which explains why very few of your friends are accountants.

My brother-in-law is an accountant. He specializes in taxes.

Bob - we'll call my brother-in-law Bob because Bob is his name - was dutifully maintaining his certification, studying tax case law recently, when he stumbled onto a curious case involving Roanoke.

Free publicity is free publicity, and beggars cannot be choosers.

Here's what tax accountants like Bob are reading about Big Lick in "Tax Research Techniques," a book published by the American Institute of Certified Public Accountants:

Edgar and Madeline B. lived in Roanoke in the 1940s. I've changed their names because, tenuous as my employment here is, a libel suit from humiliated descendants is probably enough to push me out the door. Bob's tax book uses their real names.

Madeline was a prostitute, convicted five times of running a brothel. Edgar, her husband, was an ex-con, save for the times he was busy being an active con in the penitentiary. In the late 1940s, Edgar was convicted seven times of operating a gambling house.

Madeline and Edgar must have had some house.

In 1945, Madeline met a friend who promised to buy her a house and support her if she'd quit the prostitution gig.

We pay farmers NOT to grow soybeans and corn. This fellow paid Madeline NOT to practice prostitution.

Farmers do it; Madeline did it. The friend paid a $2,000 down payment on Madeline's new house and, until he died in 1950, paid Madeline $24,926.88.

Madeline figured it for gifts, and since gifts aren't considered taxable income, she didn't file any tax returns for five years.

The Internal Revenue Service noticed that Madeline and Edgar - the tax book doesn't tell how he figured into this scheme but it appears likely that Edgar was in the Big House the whole while - weren't paying and demanded back taxes.

It's always the hard-working, decent little people that get caught while the big shots get off.

A Judge Rice from the tax court finally ruled in 1957: By not practicing prostitution, Madeline was providing a service. Furthermore, Judge Rice noticed Madeline's demeanor in court and he had grave doubts that she'd actually foresworn her trade.

He ordered Madeline and Edgar to pay their taxes. It was a landmark ruling.

No telling how many accountants studying tax case law will forever remember Roanoke because of Edgar and Madeline B.

We continue to reap the benefits of the publicity they selflessly generated by refusing to prostitute themselves. At least Madeline.

by CNB