Uber and Amazon may be the models for the tax preparation process of the future, according to Keith Alessi, the former Jackson Hewitt chairman and CEO who recently joined the board of upstart tax prep franchiser Happy Tax.
Alessi has also invested in Happy Tax, which was founded two years ago by CEO Mario Costanz with a business model in which franchises transmit their customers’ tax returns to a group of CPAs who each have a minimum of five years of training and experience (see Happy Tax aims to shake up tax prep industry). The company has just wrapped up its second tax season and is in the midst of raising new financing through the crowdfunding site Wefunder.
Alessi, a CPA, is known as a turnaround expert who took the helm at Jackson Hewitt in 1996 after the departure of founder John Hewitt, who went on to start Liberty Tax Service. Alessi steered the tax prep chain through a successful sale to the conglomerate Cendant in 1998 for approximately $480 million, and went on to run another company called Telespectrum Worldwide. (After a series of financial reverses in 2011, Jackson Hewitt ceased trading on the New York Stock Exchange and is now a privately held company owned by Bayside Financial.)
Alessi has helmed a number of other companies in different industries over the years, including Farm Fresh, Westmoreland Coal and Lifestyles Improvement Centers.
“I’ve got a lot of experience sitting on corporate boards and I recently retired as CEO of a company I was running out of Colorado, so I was looking for something to do,” he told Accounting Today. “Mario and I had talked over a period of time. He knew me through my ties to Jackson Hewitt. Melissa Salyer is on his staff, and Melissa and I had worked very closely together when I had run Jackson Hewitt. As thing fermented and he got closer to putting his company together and raising funding, he was putting together a board and I was a guy who had relevant experience. He contacted me. We got along, and I liked him, so now I’m on the board and an investor too.”
Alessi declined to say how much he has invested in the company. Costanz said that prior to the current round of crowdfunding, Happy Tax had around $1.5 million in funding. The majority of that is $1.2 million invested by Costanz himself, plus another $250,000 to $300,000 from outside investors like Alessi.
“I think he has got a little different angle on things,” said Alessi. “It’s always exciting to be around a startup. Taxes are always going to be here, but technology is changing so quickly that people who approach the industry in different ways, with less brick and mortar commitment, might enjoy a certain advantage. There are obviously lots of online platforms that you can file taxes on, but for the target customers we’re talking about here, they either don’t have that ability or interest to do it themselves. I think what he’s doing is interesting and it remains to be…