The genesis of business management firm Tanner, Mainstain, Glynn & Johnson (TMGJ) can be traced to a chance meeting on Wilshire Boulevard in 1976.
Bill Tanner and Peter Mainstain were CPAs who had faced off against each other in three-on-three pickup basketball games at Hamilton High in West L.A. One day during tax season, Tanner presented Mainstain with a proposition.
“I said, ‘Come in to work with me and eventually you can buy in if you see what you like,’” recalls Tanner, who had a former UCLA fraternity brother at law firm Loeb & Loeb steering clients his way.
Mainstain did. And what started as a small practice built around a pair of up-and-coming TV writer-producers, Tom Patchett and Jay Tarses, has grown into a venerable entertainment industry institution with clients ranging from actor Michael Keaton to boxing champion Manny Pacquiao.
In spite of all the enormous changes in the entertainment industry over the intervening years, Mainstain says the focus remains largely the same.
“Clients may not be making the huge numbers that they used to or have the tax benefits, but they’re still making money, so from our perspective, our work hasn’t changed,” says Mainstain. “If anything, we need to be more proactive with the clients to make sure they don’t overspend.”
To that end, TMGJ likes to sit down with each clients several times a year to give them updates on their earnings projections and help adjust their expenditures accordingly. “Our firm is big on projections going forward three to five years based on their contracts to give them an idea of what it takes to live on an annual basis,” Tanner says.
“We can do everything from a figuring out a complex tax situation to save thousands of dollars with a deduction, to whether they should lease or buy a car,” adds TMGJ partner Thomas F. Fouladi.
Unlike most firms, TMGJ assigns two partners to each account. “It’s a younger partner with an older partner, so they get used to new partners and get passed down eventually so the client doesn’t leave if something should happen to the older partners,” says Tanner. TMGJ has kept the firm well-stocked with new blood. Partners Mike Glynn, Bradley W. Johnson, Fouladi, and Robert Harrison joined TMGJ in 1987, 1990, 1991, and 2007, respectively.
It’s also kept up with the times technologically, shifting to a mostly paperless workflow, with e-signed tax returns and cash-flow statements that can be viewed on a smartphone.
“We like to make things as convenient as we can for the client, but on the other hand we have to manage the security side, so we use encryption tools,” says TMGJ tax manager David Coronel, who’s been with the firm for nine years.
In recent years, TMGJ has also branched out from its film and TV base to handle professional athletes, including the aforementioned Pacquiao. This presents unique challenges, from the need to file tax returns in every state in which the athletes compete to the generally short shelf life of their careers.
TMGJ prefers to steer money to such traditional investments as real estate and equities, but sometimes their clients want to explore more risky ventures, including the burgeoning semi-legal marijuana business.
“A lot of these [marijuana] companies that deal with the product itself can’t bank, and you can’t deduct the product costs for tax purposes,” Coronel says. “So what we’re seeing is people trying to invest in some of the ancillary business that are legal so they’re still → ← able to capitalize on the market.”
Over the years, TMGJ has been targeted by other firms looking to buy them out, but Tanner says they have no interest. “We’d probably make a great deal of money by selling out, but we haven’t and we won’t,” he says.
“We’re building from the ground floor up and it creates a lot of resentment if you bring in another firm and you have people who have worked here so long and someone steps in above them.”
And while many clients have been able to retire at relatively young ages thanks to expert financial planning, Tanner and Mainstain have no plans to hang it up any time soon. “We actually enjoy what we do,” Mainstain says.