Monthly Archives: June 2013

Why I’m Not Your “Typical” Accountant


When you tell people that you are an accountant, the image that pops in their head often looks like the one above.  Some older gentleman wearing a pressed white shirt, spectacles, a green visor sitting under some intense light immersed in calculation.  All of the above hint at an individual who, while quite intelligent and diligent about their work, is probably not viewed as the life of the party.  But why is this the image that comes to mind?  Where is the social accountant?  Where is the person who likes to go rock climbing on the weekends?  Where are the real men and women who represent the accounting profession?

Ready to hit the zip line!

Ready to hit the zip line!

Truth be told, the image classically associated with accounting professionals is actually just stereotypical.  Now what do I mean by that?  Well, a stereotype is a thought that may be adopted about specific types of individuals or certain ways of doing things, but that belief may or may not accurately reflect reality.  The reason this image has persisted so long is largely based on historical grounds.  However, the reality of the current accounting profession is that most people have “another side” to them which isn’t reflected when they are with clients and colleagues.  The same would be true for me as well.

In this post I talked a lot about how I got into the profession (which was kind of by accident) as well as some of the things I like to do in my spare time.  But what I wanted to focus on today is the why behind why I don’t fit the mold so to speak.

I’ve always had a business mind.  Back in my younger days, I use to do yard work for our neighbors.  They had a pretty big house and converted much of their yard space into gardens.  The one in front was full of flowers and the one in back had vegetables and other plants.  One day I was working with the owner’s wife and she asked me what I wanted to be when I “grew up.”  Without hesitation I spouted off something to the effect of I wouldn’t mind owning a landscaping business, a car wash, a towing company, etc.  Why I didn’t mention going to college still escapes me, but apparently I was focused on starting something.

TSU class ring day with Pres. Jack Magruder

TSU class ring day with Pres. Jack Magruder

If you fast-forward to my time in college and graduate school, one trend always tended to emerge.  While I was good at my accounting classes, I almost always did better in my business classes.  Whether it was business strategy, economics or investment theory, I simply was always able to grasp the concepts and meld them with the associated financial impact.  What this means is that I not only understood the accounting side of the transaction, I also got how it related to the business.  Thus, over the course of my 13 years in Corporate America, I ended up moving more towards the business side of the financial house (e.g. Sr. Financial Analyst, Manager or Financial Planning & Analysis) and farther away from the accounting side.

Most “typical” accountants get business in general, but sometimes get too entrenched in making sure all the numbers tick and tie.  While this is part of making sure your financials are solid, it’s not what most business owners are looking for.  Many want someone to give them insights on what they see; not simply regurgitate what happened last month.  They also want someone who understands all the business functions and knows why marketing spends so much money (i.e. because sales don’t happen without it and no sales means no bookkeeper/accountant).  I was fortunate enough to work on cross functional teams in my corporate days thus I get how the puzzle fits together.  Unfortunately, not all financial professionals do.

I steal from the best and forget the rest.  What I mean by this is that when it comes to business, I look for what works and discard what doesn’t.  The key with this (for me) is that it doesn’t make a difference what industry the concept is used in, so long as it’s the best one.

For example, in the insurance industry it is known that you must manage the customer relationship if you want to be successful.  I mean, what’s the difference between one insurance provider and another?  Not much to the untrained eye.  But what will keep you with your agent given that everything else is equal across all providers?  The way that they treat you when then deliver service and how they engage with you when they aren’t.  This is why you get a birthday card, a calendar for your refrigerator and those monthly newsletters each year.  All of the proceeding are ways to keep you feeling as if your agent cares about you AND keep them top of mind whenever someone asks you “do you know a good insurance agent?”

So what does that have to do with me?  All of the above are marketing tools adapted from another industry and applied to our practice to help us keep our clients engaged.  Do they work?  I like to think so as we have a pretty high client retention ratio.  But what’s different about this is that not all accountants conduct their marketing in this manner.  Some think that advertising in the yellow pages is the way to go.  Some feel that splashing your name all across a golf tournament is the trick.  Me?  I think advertising where your competition isn’t or doesn’t focus is how you gain the business that they’re neglecting.  If you want to get mediocre results (no matter what the topic/activity) just do what everyone else does.  Thus, we always look to emulate the best companies out there, even if it’s viewed as unconventional or unorthodox for a financial services firm.  Bet that would make that stodgy green visor CPA roll over in his grave huh?

I like to let my personality show.  While I like to consider myself a relatively intelligent person, I do like to do things that are outside of what I’ll call intellectual endeavors.  I participated in sports while I was in high school, and while I wasn’t any good at most of them, I still liked the thrill of competition.  This passion for a challenge is prevalent in my business dealings as well as my hobbies.  Whether it’s weightlifting, cycling, riding motorcycles or playing a good ‘ol game of tag with my daughter, I like to have fun.

Having a little weekend fun!

Having a little weekend fun!

In addition to the above, I also like people.  I mean, you can’t really be effective as an accountant if you don’t like people or you feel that they are always getting on your nerves.  Thus I like talking to people, learning what makes them tick, what’s going on in their lives and just bouncing ideas around.  While you might not see me shutting down the party or dancing till the cows come home, I do like to mix and mingle with people every once in awhile.  I mean hey, you can’t expect me to use my brain all day dealing with numbers and business problems and then not have an outlet to decompress right?

Sunset dinner with the missus.

Sunset dinner with the missus.

All of the above are just simple examples of what goes on in my life.  What’s more important is that if my clients ask, I have no problem telling them about what I do outside of work.  Why?  Read the last point.

I like to share.  While I tend to do my best thinking and problem solving when I am by myself (i.e. typical introvert), I can’t function without some interaction from others (i.e. classic extrovert).  Thus, I strive to achieve a balance between my need for inner quite and my desire to be active and have fun with other folks.  The end result is what you see in this blog; me sharing my life with you, my friends, teammates, colleagues and anyone else who happens to stumble upon it.

Do I mind sharing what I do outside of business?  No.  Many people view accountants as intellectual, emotionless, lumps of goo that have no life outside of crunching numbers.  By sharing my escapades, it proves that I am human and that I am no different than they are.  It offers them a glimpse into my life and what makes me tick.  Do most stereotypical accountants do this?  I wouldn’t know; but that’s because I’m not your typical accountant!

Hey, even us accountants have a fun side.

Hey, even us accountants have a fun side.

Until next time…

12 Ideas That Don’t Work In Business Anymore

We recently came across an article which discussed a dozen public accounting ideas that don’t work anymore.  The article begins by mentioning a sermon that Rev. Robin Meyers preached where he warned that there may be an eighth deadly sin: nostalgia.  You know, that feeling of fondness and good memories of a time since passed; usually quite some time ago.    What was being suggested is that maybe by holding on to those “good ‘ol days” (which may not have been really all that good), we are actually delaying making the significant changes needed to address modern/future realities and challenges.

So with that said, we got to thinking; what are some things that don’t work in business anymore?  What are some things that CEOs and workers cling to that should really be abandoned in today’s times?  Back when Jared worked in the consumer package goods (CPG) industry, he said they lived and operated by one phrase.  Innovate or die.  What does this mean?  Well, if your competitors are always looking for and introducing the next big thing each year, you better do the same or you’ll get left in the dust.  To that end, if your business isn’t keeping pace with customer/consumer preferences and demands, you might as well just close up shop right now.

Here are twelve things that business owners need to know just don’t hack it in today’s day and age:

Build It and They Will Come.  The days of simply opening up a store or retail location and having customers flock to you ended in the 1950’s and it’s not coming back.  Today’s consumer has a plethora of information at their disposal (mobile access to providers, customer reviews, competitor pricing, etc.) to help them pinpoint who they will purchase from.  The more important goal is to make sure customers can find you when they do their search.  In short, make sure you are doing your marketing.

Expecting That Clients Will Stay With You.  In our industry, many tax professionals don’t feel too compelled to offer “exemplary” service.  Don’t get us wrong, you’ll have a decent experience, but you just may not get the red carpet rolled out for you.  The reason is that many feel their clients won’t leave because it’s too much of a pain to switch accountants, tax preparers, etc.  If you treat your clients like this, don’t be surprised when that up and coming competitor down the street steals them away from you.

Not Making Your Company 24/7 Accessible To Customers.  We’re not saying that you have to interact with your customers in the wee hours of the morning.  We’re just saying that you need to give them a way to contact you when it’s convenient for them.  It’s solely up to you if you want to return their calls at 2AM, or have an email auto responder at least tell them someone will contact them first thing during business hours.  But not having a mechanism for the girl who works the graveyard shift to let you know she’s unhappy during her lunch break isn’t acceptable.

Refusing To Embrace Technology.  If you still rely on yellow page ads to bring you business, we have some news for you; no one uses the yellow pages to find providers anymore.  Technology has made it so much easier for people to interact with one another.  It’s also made it more instantaneous.  Refusing to embrace current trends only does one thing; accelerate the decline in your revenue and ultimately your business.

Not Making Your Website Mobil Friendly.  We’re just as guilty of this as anyone else; but we realize that it needs to be fixed and are working on it.  The truth is, many consumers access your website from their phone or other mobile device.  If your website doesn’t look correct when they pull it up, what type of impression are you sending?  Remember; always put your best foot forward.

Not Offering Flexible Work Solutions.  Certain professions are really big on “face time” or the amount of time you actually spend in the office.  Given that this is 2013 and the various technological advances that we have made in the past 10-15 years; there really is no reason why you need to be in the office ALL of the time.  If employees can’t work remotely, can’t take work home with them and can’t schedule non-critical work around their lives, don’t be surprised when they go and work for your competitor who does offer these things.

Believing That You Don’t Have To Offer Competitive Benefits.  Some “Old Timers” in every company or industry always seem to believe that the “new way” of doing things is just a fad.  Unfortunately, denying current trends exist is just not good business sense.  Thus, if your company isn’t trying to be competitive in this arena, be advised that your employees may not be sticking around too long.

Not Offering A Casual Work Environment (Occasionally).  Only bankers and those who entertain clients wear business professional dress all the time.  Since the early 2000’s many companies offer a business casual environment with Friday even being a day where employees can dress down.  Remember, it’s sometimes the little things that make your employees happy.  Something as simple as altering the dress code when you aren’t meeting with customers can actually go a long way.

Believing That Talented Young Staff Will Wait Their Turn.  Do talented athletes wait their turn to enter the professional arena?  Do gifted individuals waste their brain cells attending all years of college when they know more that all the professors combined?  So the question becomes why would you think your talented young staff would wait to attain roles that they are currently ready for?  The best thing to do is identify your company’s next bright stars and begin to groom them and put them through their paces.  If you don’t, you may wake up one day and find them as your competitor!

Expecting That Employees Will Stay With You.    The day of company loyalty went out the door the day that companies started focusing on “shareholder value” as their guiding light.  Employees nowadays have a lifespan of about 3-5 years before they are on to the next company.  Now this doesn’t mean that you shouldn’t focus on developing your staff, or neglect succession planning.  However, it does mean that you shouldn’t be surprised when one of your prized managers comes and tells you their leaving for their “dream job” in Hawaii.

Seniority Based Rewards System.  Do you remember that college professor you had that was absolutely horrible?  You know the one who did your education a disservice and should have been fired years ago?  Oh yeah, Your State University wouldn’t let them go because they had tenure (i.e. seniority).  Quite simply put, rewarding people SOLELY because they have been around since dirt was invented is NOT a good way to operate.  A better way is to reward those who do a good job AND stay around for the long haul.

Earning The Right To Give Upward Feedback.  Listen, we all have the right to praise and criticize (objectively of course).  But the notion that feedback should only travel downward or laterally (as in the case of your peers) is not conductive to developing a world class operation.  Everyone should have the right to give their opinion.  If you not comfortable hearing what the entry level staff think, then offer them an anonymous way to do so via one of these platforms.  Did you think we were going to say use a suggestion box?  Please go back and read point number four!

Until next time…

Federal Tax Lien Help

Occasionally someone will call our office freaking out about an IRS letter stating that a lien is being filed against them.  In this post, we’ll discuss what a lien is and isn’t and how to deal with it.

What does a lien actually mean/do?

When you owe back taxes to the IRS, they will generally file a tax lien notice against you.  Tax liens are a matter of public record and available for anyone to look up.  They are typically filed for any balance due that exceeds $10,000.  However, new tax liens are usually filed for less than that amount if you continue to pile on additional tax debt in the future.

So what exactly is a tax lien?  Basically, it’s a claim against your property.  A tax lien takes a higher priority over most other kinds of liens, and after 180 days jumps ahead of some lien types it doesn’t automatically supersede.  A Federal tax lien will not jump in front of a mortgage, or a local property tax lien, but it can jump ahead of just about everything else.

The important aspect of a Federal tax lien is that it covers ALL of your property.  For example, the mortgage on your house is usually only secured by the house itself.  But when it comes to a tax lien, it is actually “secured” by everything you own.  This means the clothes on your back, the money in your checking account, your retirement accounts and even your paycheck.  That’s right; a Federal tax lien provides the government with the ability to claim your paycheck.  That doesn’t mean they’re going to take it, it just means that they can.

A Federal tax lien also shows up on your credit report.  This can impact your credit score, and make it difficult to obtain employment, as many employers will use this information in their hiring decisions.

It is important to understand that a lien is NOT a levy.  A levy is an administrative order directing a 3rd party to physically hand over cash or property to the government that is covered by the lien. Thus, for 99% of people, a Federal tax lien is actually harmless, and has zero impact on their life or business.  Sometimes, however, the lien itself creates a bad situation.  In those cases, there are things that can be done with the lien that can help put you in a better position.

Lien Withdrawal

In extremely rare circumstances, it may be possible to obtain the complete removal of a Federal tax lien.  In order to achieve this, the taxpayer (or their hired professional) must demonstrate two things:

  • The lien is creating an undue economic hardship upon the taxpayer
  • Removing the lien will help facilitate collection of the tax debt

Basically, you have so show the IRS that the pure existence of the lien will cause a dramatic loss of income.  For a business, a lien may interrupt a factoring agreement or a line of credit, which is required for them to operate.  For a person, the existence of a lien might mean the loss of a security clearance, and therefore loss of a job.

Typically, if one can prove the first bullet, then they can often prove the second.  For example, if a business continues to operate, and you get to keep your job, then you both can make payments to the IRS, which is what is meant by “facilitate collection.”

Lien Subordination

Another tactic that one can sometimes take is to keep the IRS tax lien in place, but subordinate the government lien to some other lien.  When we do this, we essentially get the IRS to place themselves in second priority position, underneath somebody else.

The most common reason for doing this is to place the IRS lien secondary to a bank financing lien, such as a factoring agreement, line of credit, or an operating capital loan.  Many banks will cut off funding on a loan or line of credit if they are not in first position.  Thus, subordinating the tax lien keeps the bank happy by keeping their lien in first priority over the IRS.  This keeps you operating, and thereby “facilitates collection.”

Lien Discharge

It is not uncommon for somebody to have one particular asset that is worth a bit of money.  Sometimes selling that asset can bring in enough money to help pay down the tax debt, or selling the asset will eliminate the monthly payment on the asset, thereby allowing you to put that money towards the IRS bill each month.  See how this all keeps coming back to that “facilitating collection” point mentioned above?

Let’s say you own a vintage 1957 Chevy.  It’s worth $60,000 but you still owe $25,000 on it.  You’re currently making monthly payments of $500 toward the balance owed.  You obviously don’t want to sell this car, but it will make life a lot easier if you did, since you owe the IRS $100,000 and they are going to start taking your paycheck via wage garnishment if you don’t do something.

So, you decide to sell the Chevy.  The problem is that the IRS lien prevents you from selling it.  Not only does your loan company have a lien on the car, the IRS lien covers it, too.  Thus, we need to remove the IRS lien in order to sell the car.  The process of removing the IRS lien from this one piece of property is called a lien discharge, and you obtain a Certificate of Discharge releasing this one asset only from the lien.

With the Certificate of Discharge in hand, you can sell the car.  This in turn allows you to pay off the loan without the IRS making a stink about that $25K going to the bank.  Furthermore, you then you have $35K profit from the sale that you give to the IRS, plus free up $500 per month to pay the government.  This is not an ideal scenario for most people, giving up a beloved possession.  But it’s far better than the IRS seizing 70% of your paycheck every month.


By itself, an IRS tax lien itself really has no teeth.  It’s the things that come several months after the lien filing (e.g. a tax levy) that really cause trouble.  However if you have a tax lien, it’s probably best to deal with it using one of the options above.  Especially if the path to resolving the tax debt itself involves doing things with assets, banks, keeping financing open or preventing the loss of your job or business revenue.

The Truth About Settling Taxes for “Pennies On The Dollar”

Every year we here from taxpayers who have IRS debt and are looking for a solution.  Inevitably, they will also make a reference to the possibility of settling their debt for less than what they owe.  What usually follows is a conversation about what this actually means and how most people DON’T qualify for it.  Let us elaborate.

In advertising, you’ll hear companies talk about settling back taxes for 20%, 10%, or even less than the original balance.  What these ads, and the sales people whom you talk to on the phone, are trying to sell you is an Offer in Compromise service package.  This package is a reference to the IRS Offer in Compromise (OIC) program, which allows eligible tax debtors to pay the IRS an amount of money that is less than what they owe in order to wipe out their entire tax liability.

The phrase “pennies on the dollar” was actually determined several years ago by the IRS to be a form of deceptive advertising.  As a result, they explicitly instruct licensed practitioners that using this phrase is a violation of Circular 230, which is the handbook us practitioners must follow when working with the IRS.  However, since the IRS doesn’t always have jurisdiction over firms that just market these services, it comes into the FTC’s purview to look out for these deceptive marketing practices.

Some ads, web sites, and salesmen are out there trying to convince taxpayers that what you settle for is some fixed percentage of your tax debt.  However, this is blatantly incorrect. There is absolutely no provision in the tax code for allowing a taxpayer to pay a set percentage of their tax liability and just calling it good.  This has never existed, and most likely never will.

Instead, the amount of your OIC settlement is calculated using a very, very strict formula.  What’s even better is that this formula is NOT secret — it’s available on a worksheet in IRS publication 656B.

Based on this formula, if you have equity in assets that exceed your tax debt, you simply don’t qualify.  Period.  End of story.  For most individuals, the common thing is going to be equity in your house or rental properties, or perhaps equity in a collection of classic cars, stamps, coins, guns, art, etc.  If the value of ANY of that stuff is greater than your tax debt, you do not qualify for the OIC and cannot settle for “pennies on the dollar” – there is no way around this.

In the same vein, if you are a high income earner, it’s also highly unlikely you will qualify for the OIC.  The reason for this is that the IRS only allows certain amounts of money every month as “eligible expenses” for housing, cars, food, etc.  If your lifestyle exceeds these amounts, the IRS doesn’t care — they will only allow you to claim the National Standard expenses. Any monthly income over those amounts gets multiplied by either 48 or 60, and THAT number goes into your offer amount.

In these circumstances, you may qualify for a period of up to 12 months to make a “lifestyle adjustment” and reduce your living expenses to come into line with IRS standards. This will often involve selling luxury homes and getting rid of toys such as cars and boats.  Keep in mind that these items are all covered by your tax lien, so any proceeds from the sale of these items technically is owned by the IRS, and should be paid over to them. A good tax representative can assist you with structuring these sales so that both you and the IRS get something out of it.

In closing, beware of anybody promising that your tax debt can be settled for some fixed percentage.  That’s not the way it works and a skilled professional can show you if you stand a chance at qualifying for the OIC.  Anybody trying to sell you on the percentage idea might as well be selling you swampland in Florida, and you’ll be best served to seek assistance elsewhere.