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PRESS RELEASE

Date: 31st October 2016

Title: Peoples Income Tax prepares for the future

Charles E. Chuck McCabe took his first class on income tax preparation in 1967,
which he paid for with a $60 loan from his fiancee, Marilyn.

That helped McCabe get his first work as a seasonal tax preparer, a side job he took
after he was hurt on his full-time job for the Pennsylvania Railroad.
More than 40 years later, the income tax preparation business McCabe eventually
founded Peoples Income Tax prepares thousands of income tax returns a year in
central Virginia. It employs 35 people at nine offices in the Richmond region.

Peoples Income Tax is a family business: Charles E. McCabe is CEO, wife Marilyn is VP of human
resources and administration, and daughter Terry Judge is marketing director.

It is a family business. Marilyn, McCabes wife for 44 years, is vice president of human
resources and administration for the business. Their daughter, Terry Judge, is
marketing director.
We have seen a lot of changes over the years in the tax-preparation business, said
McCabe, who left his railroad job and worked for 19 years for the H&R Block tax
preparation chain before starting Peoples Income Tax in Richmond in 1987.

Those changes have included the rise of mass-market tax-preparation computer

software that has made it easier for millions of Americans to do their returns at home, or
even to set up their own commercial tax-preparation services.

Other tax-preparation services have moved into the Richmond area since Peoples was
founded, so the company worked to adapt to the times, he said.

As an entrepreneur, you have to continue to innovate and evolve, or you stagnate,

said McCabe, a vocal advocate for small businesses who has worked in numerous
ways to help develop entrepreneurship in the Richmond region.

The fastest-growing venture now for Peoples is its tax-preparation education business,
The Income Tax School Inc.

Robert Wasilewski and Brenda Rabhan work on instructional literature at Peoples Income Tax, which
prepares thousands of income tax returns a year in central Virginia, but its tax-preparation education
business is its fastest-growing venture.

The business started as a way for the company to train its tax preparers. It then
became a side venture, and now it has grown into a national business that provides tax-
preparation courses and software to colleges, businesses and individual tax preparers.
At least 3,000 people take the courses annually, most online.
At the companys Henrico County headquarters, staff members also develop the
curriculum and publish and print student texts, instructor guides, tax-school operator
manuals and tax practice management manuals.

The Income Tax School is about equal in revenue now to Peoples tax-preparation and
bookkeeping businesses combined. It is growing faster, McCabe said. E-learning is a
growth area.

The educational side of the business has great appeal to McCabe, whose education
was delayed because of family circumstances.

McCabe grew up in Bayonne, N.J., the second oldest of nine siblings. As a teenager,
he dropped out of high school to help take care of his younger siblings after their
mother was institutionalized and their father died in a car wreck.

McCabe expresses no bitterness about that situation. You do what you have to do, he
said. I think that experience probably made me really focus on being more
responsible.

McCabe started working for the Pennsylvania Railroad, first as a brakeman but
eventually working his way up to conductor. In his early 20s, he was knocked off a
boxcar in an accident and injured, missing five months of work.

To help make ends meet, McCabe wanted to take a tax course to work as a seasonal
tax preparer.

He wanted to take this tax course, but he didnt have the money, said Marilyn
McCabe, who decided to give him that fateful $60 loan. We had nothing back then.
Zero.

McCabes part-time work as a seasonal preparer for H&R Block eventually led to full-
time work, and then to a management job. By the time he was 26, he had become a
regional director for the companys Mid-Atlantic region and then the New York City
region, overseeing 225 offices.

McCabe entered college at age 31, earning a bachelors degree with a double major in
management and social sciences from Adelphi University in New York, and an
executive masters of business administration degree from Pace University in New
York, where he also completed two years of doctoral studies in business.

His experience returning to school prompted McCabe to co-author two books providing
guidance to adults who return to college, including Back to School: The College Guide
for Adults.

He also has taught classes on tax preparation and business management at colleges
such as J. Sargeant Reynolds Community College and Virginia Commonwealth
University.

I became much more interested in the education side of the business because I think
of my own experience of going back to school later and completing all that education,
McCabe said.

McCabes emphasis on education is one reason he supports efforts to require all tax
preparers to get training and pass tests.

Prompted by studies indicating that many tax returns filed by paid preparers had
mistakes, the Internal Revenue Service has attempted to impose new regulations on
the industry.

The rules, which started to take effect last year, required hundreds of thousands of tax
preparers in the United States to take 15 hours of continuing education per year and
pass a competency test.

A lawsuit ensued, filed by several tax-preparation firms. In January, a federal judge in

Washington ruled that the IRS overstepped its authority with the new requirements.
The IRS has put the program on hold while it appeals the courts ruling.

McCabes tax-preparation school stood to gain from the new regulations as more tax
preparers sought out the type of training the courses offer. However, the IRS
regulations also were attracting new competitors in the tax-preparation education
business, McCabe said.

I am a big supporter of the regulations, whether it helps or hurts our business, he said.
I think it will really enhance the image of the tax (preparation) industry.
Whether the regulations stand or not, McCabe said he thinks there will be growing
demand for tax-preparation courses.

Preparers who are doing the right thing and getting their education and documenting
their competency would have a competitive advantage over the fly-by-night operators,
he said.

Russell Beyer, owner of a Richmond-area Jackson Hewitt Tax Service franchise, said
the company also is putting more emphasis on training and education for tax preparers,
including requiring its own internal annual mandatory online training and tax-preparation
readiness exams for tax preparers.

The growth of the tax code means that education has become more and more of a
priority and necessity in the tax-preparation field over the years, Beyer said.

Virginia Beach-based Jackson Hewitt is one of the tax-preparation services that have
entered the Richmond market and grown quickly in the past 20 years. The company
operates more than 24 offices locally. It has about 6,800 nationally.

The franchise tax-preparation firms usually ramp up their seasonal employment during
tax season, adding hundreds of new workers.

As taxes become more complex and tax preparers become more regulated, the
timeline for staffing has been greatly accelerated, Beyer said. We have already begun
to prepare for staffing in 2014.

With more competitors in the marketplace since Peoples opened, the company lost
market share in the tax-preparation side of the business, McCabe said.

In response, the company also has adapted its business model. Peoples Income Tax
rode the wave of the fast-tax-refund business for several years, setting up operations
in local retail stores to help people looking to get a quick turnaround on a tax refund.

The company has since closed 26 of its fast-refund locations to focus more on what
McCabe sees as its core business: providing tax-return preparations for small
businesses and individuals whose returns are more complex than average.
McCabes daughter, Terry Judge, marketing director for the company, sees the small-
business market as an important growth area.

There is so much competition for individual tax returns, and they (consumers) have the
option to do it themselves with software, she said. But locally, there is a large pool of
small businesses that need the assistance that we have available and could use a tax
professional and bookkeeper.

Among Peoples longtime customers is Duboy Inc., an advertising company founded in

1967 by Jess Duboy, who said he was pleased with how the company could handle
complex returns.

I think they do four returns for me now, he said. They make it simple, and I have
never had any reason to want to be with anyone but them.

McCabe said having the income tax school has helped his staff develop more expertise
in preparing tax returns, too. Thanks to the school, we have been able to employ more
of our people year-round, he said.

For the Better Business Bureau serving central Virginia, McCabe has become a go-to
guy when it comes to questions about tax issues, said Tom Gallagher, the local BBBs
president and CEO.

He is a high-intensity guy, and he is really concerned about central Virginia and doing
business the proper way, Gallagher said. He is a real asset to the Better Business
Bureau, because he is right on top of everything. He just knows things, and he knows
what is right and what is wrong.

McCabe served for nine years on the Better Business Bureaus board of directors,
including one year as chairman.

It is just one of many civic and philanthropic groups for which McCabe has provided
leadership and services.

Among those, he has served on the board of The Greater Richmond Chamber,
including as chairman of its education committee. He is the founding chairman of the
Virginia Council of CEOs. He has served as a member of the Virginia Council on Teen
Pregnancy Prevention, and as a volunteer for the Virginia Home for Boys, Junior
Achievement and the United Way.

McCabe also was named the Small Business Administrations Virginia Small Business
Advocate of The Year in 1991. A frequent adviser and mentor to entrepreneurs, he is
past vice president of the Richmond Venture Capital Club and co-founder the Richmond
Angel Investor Network.

Civic involvement has always been a commitment that we have had since we opened,
he said. We always try to be a good corporate citizen and utilize our resources,
especially when we can meet both company goals and social goals at the same time.

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