In 1990, Jim DiGabriele left his solid position as an IRS agent in Bloomfield, NJ to pursue the dream of owning his own CPA firm. Little did he know he would soon carry a reputation as the “Fast Eddie” of accounting — as well as finding a niche in an area of practice he knew virtually nothing about.

A mix of serendipity, risk and genuine sweat led Jim to realizing his dream, and in 1995, along with another former agent, Jim McNulty, he opened DiGabriele, McNulty Co., LLC, in West Orange, NJ, employing three other professionals and three paraprofessionals. The practice has grown from initial billings in 1995 of $200,000 to this year’s projected revenues of $500,000. Characterizing his firm as a successful practice, indeed, only begins to describe his departure from the tried and true roads most CPAs pursue.

A Complete 180 Leads to Specialization
Nearly a decade ago, if residents of greater New York City tuned into their local cable television stations expecting to see home-grown programming — the kind most people expect and want to find only on Cable Access — they were most likely watching Jim’s commercials advertising his CPA practice. At the time, Jim seemed to be all over the area with newspaper advertising, direct mail and telemarketing. Even today, when he finds networking, acquisitions and referrals to be the most reliable marketing sources, he claims not to have made a complete departure from his former efforts when he says his business card reads like a billboard ad.

“When I started in my practice in 1990, I was the first person in this area to go on cable TV,” says Jim. “I wrestled with the fact that people frowned upon this kind of advertising, but it was one of the best marketing decisions I ever made. Now everyone is doing it.”

After spending four years as a Revenue agent, he was motivated to go out on his own because he felt in his heart that what he was learning as an agent would be highly marketable. He began as a sole practitioner with no clients, but quickly looked for a way to spread the word that he was a CPA in need to work. He would soon find that his foray into commercials touting himself as a former IRS agent would be a “magnet” in picking up business from clients who had IRS problems, and from attorneys who had their own clients needing assistance with the IRS.

“I would get calls from divorce attorneys who told me they could use me on matrimonial cases involving division of assets or valuing a spouse’s business,” he says. “I didn’t even know what they were talking about.”

He soon discovered that his experience in knowing the ins and outs of the IRS would prove worthwhile to his client base, and even something as simple as a public record search enabled him to find hidden assets among a spouse’s real net worth rather than the amount he or she claimed to have in order to settle a divorce case to an advantage. As a result of solutions in seemingly complex cases, Jim received not only notoriety among others who could pass work to him, but found an interest by specializing in forensic accounting.

The Right Arm of Insurance Settlements
In a practice based on forensic accounting, tax representation and traditional write-up, Jim often is hired by insurance companies who investigate business interruptions claims, such as a business that sustains a fire or other disaster and files a claim for loss revenues.

“This is an area mostly unfamiliar to small firms, but our backgrounds in forensic help us immensely to find solutions based on a company’s historical growth, prior year returns and perhaps one hidden wrinkle in operations that enables an insurance company to provide a fair settlement.”

Recently, for example, during restoration in a company that sustained a fire, Jim says a claim was filed for 100 percent of loss profits. Based on the policy’s parameters, the business interruption claim was to be settled based on a projection of historical data. Jim soon found that the company’s claim with zero operations was false. A public record search on the Internet disclosed a second location, enabling the claim to be reduced by 50 percent.

“An adjuster would need an accounting background to determine loss profits, so insurance companies hire CPAs to investigate because of the experience involved,” he says. “It often comes down to one aberration that enables us to provide these kind of solutions that would otherwise go undiscovered.”

Supplementing his knowledge and referral sources through networking, Jim and his partner plan to grow even larger through the soon-to-be acquisition of several other small practices and his recently opened Web site, www.execusite.com/dmcpa. Still, most of the time, he returns to his roots and the factors that motivate him to succeed.

“I found forensic work engrossing because it’s intriguing to try and find some of these trails,” says Jim. “If I were independently wealthy, I would do this kind of work for nothing.”

CPAs with questions on forensic accounting and other matters may contact Jim by writing to jimdm@idt.net.