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Podcasting From The Pumpkin Patch · The Accounting Podcast

• Attention: This is a machine-generated transcript. As such, there may be spelling, grammar, and accuracy errors. Thank you! David Leary: [00:00:00] What is accounting practice management software? Is it the operating system for your accounting practice? Is it an all in one software solution for accountants? Is it the crucial tech standing between your practice and utter chaos? Accounting practice management software should bring together all of your practices mission critical functions in one place to make your life and your practice easier. Stay tuned to hear more from our sponsor Canopy later in the episode and how you can receive a $40 Amazon gift card. Blake Oliver: [00:00:31] I feel like there's this sort of divide in our profession where you've got the people who are like, Really? I'm going to play by the rules. But then you have all these people that are out there doing crazy tax credit stuff and really aggressive stuff and conservation easements and R&D tax credits without really checking things. And they're making bundles of money. They are. They're they're growing fast because they're giving the business owners what they want. David Leary: [00:00:58] Coming to you weekly from the on pay recording studio. This is The Cloud Accounting Podcast. Blake Oliver: [00:01:07] Welcome to The Cloud Accounting Podcast. I'm Blake Oliver. David Leary: [00:01:11] And I'm David Leary. Blake Oliver: [00:01:12] And our special guest this week is Jeremy Wells. Hey, Jeremy. How you doing? Jeremy Wells: [00:01:16] Doing all right, Blake. Thanks for having me. Blake Oliver: [00:01:18] It looks like you're out on the road. Where are you at this week? Jeremy Wells: [00:01:21] I am actually at the AICPA offices in New York City. I am here for a small group meetup, and we just got finished with that just in time to come join you guys. Blake Oliver: [00:01:32] Well, thanks for jumping on. I know I tweeted at you or I DM'd you maybe an hour or two ago and I said, Hey Jeremy, there's been a lot of chatter on Twitter about pumpkin patches and I'm thinking about carving a pumpkin this weekend. I found the whole thing to be really interesting and I want to talk about it. But, you know, David and I are not tax people. Well, I guess everybody is a tax person according to some marketing campaigns. But we are not tax people in that we don't prepare taxes. We aren't tax experts. I'm a CPA, but I'm on the financial accounting side, the bookkeeping side. So we thought maybe we should have somebody who actually knows what they're talking about on this episode to kind of give some takeaways and context. And I don't know, just chat about it. So. Yeah. Jeremy Wells: [00:02:19] All right. Well, I'm not sure I'm exactly qualified for that job, but I'll do my best for sure. I did jump into that for a little bit. Tried to at least until I got blocked by the original poster. But yeah, it definitely kept up with that conversation. David Leary: [00:02:33] Do you want to share the tweet? Blake Oliver: [00:02:35] Yeah. So let's look at this original tweet. And Jeremy, would you mind reading this tweet for our listeners who are not on the live stream? Jeremy Wells: [00:02:44] Absolutely so. This is from pink text underscore CPE. And her tweet is make your pumpkin patch trip tax deductible. Step one, hire your kids and or spouse and your business. Right. Seems legit. Step two, have a family business meeting at the patch now. What she means by family business meeting. I'm not sure that I don't think that's a technical term there, but we can talk about that. Step three Take videos for business posts and ads. All right. I think I'm seeing what you're driving at here. Step four, Discuss business over snacks, presumably snacks you purchased there at the pumpkin patch. And then step five, keep your receipts and record of work done. And and according to this tweet, if you do those five things, then you've got yourself a tax deductible family trip to the pumpkin patch. What could be better? Blake Oliver: [00:03:43] Oh, that's very exciting. I always love being able to deduct vacations and family trips and enter. Jeremy Wells: [00:03:51] Absolutely. Blake Oliver: [00:03:52] And this. David Leary: [00:03:52] Is interesting. This, too, is if I go back to scaling new heights. So we're at the conference going new heights, and it's in Orlando. And the day after the conference, you know, obviously that was all business trip. And my son was with me and he worked the booth and he's on the payroll of the of the LLC. We went to what's that place called Universal Studios where our Cloud accounting podcast shirts and I asked to Twitter. I was like, Can I claim the cost to get in? Everybody's like, No, you can't do it. Even though they had now they actually read off the shirts and sit it over the loudspeaker. But it doesn't matter. Blake Oliver: [00:04:23] Nobody, nobody, nobody. Back to you on that one. David Leary: [00:04:25] I didn't find any, but I'm talking there on people, though. Maybe I need to get with a different set of Twitter people. Jeremy Wells: [00:04:31] You just need a fire tax Twitter and go hire a CPA that will agree with you. Blake Oliver: [00:04:34] Well, yeah. So? So I find this interesting because I kind of found myself in these questionable tax deduction situations as a bookkeeper because I would be putting together the books for my clients and I would see all sorts of stuff come through that was of questionable nature, like, should this really be a business expense? And when I first started doing that kind of work, it bothered me a bit. I'm also studying for my CPA and I'm learning all about ethics and professional responsibility. And here I am coding. I don't know, like, just like I can't even think of an example right at the moment, but just obviously, you know, stuff that's like a personal credit card that's getting paid through the business and it would bother me. But then at a certain point I just said, you know what? I'm not the one preparing the tax return. Whoever does that can go ahead and re class. These entries, You know, my job is just to do the books according to how the business owner wants them done. And so that's how I made my peace with it. And I'd be surprised if everybody who does this kind of work doesn't see this all the time. Like at least unless. Jeremy Wells: [00:05:36] And as a as a tax professional, you know, I understand that. And I have I have customers in my firm where we're doing both. We're doing the books and and the the tax return. So, you know, we'll see transactions come through. And, you know, you got to understand from our perspective, we're just seeing that that little bit of cryptic information that's included on the bank statement. Right. So, you know, we'll see Target come through or Walmart or Starbucks and we have no idea what that transaction actually was. So we need some help from the customer to get some context. Right. Did did you just accidentally use the business card for this personal transaction? Did you actually meet one of your clients or customers at Starbucks? Those kinds of things. Now, as the tax preparer, if I'm not doing the bookkeeping, you know, then there's the issue of, okay, you know, you prepared the statements according or you prepared the the books according to the client's wishes or just based on the best information you had. Now, as the tax preparer, it's still on me to do some due diligence as to whether, you know, all of this stuff is truly deductible, whether it's correctly categorized. So, you know, what am I going to do in the middle of tax season? Am I still going to go through the goal line by line and figure out all of those target transactions were, in fact, business expenses? If all of those Starbucks purchases were in fact, you know, meeting clients at Starbucks. So it can get it can get interesting, it can it can be a tough ordeal on both sides for both the bookkeeper and the tax preparer. Blake Oliver: [00:07:03] Yeah. So there's two things going on that I want to talk about. It's that what is our responsibility as CPAs or just as EA's or tax professionals in general? What is our obligation to investigate this and allow it or disallow it? Because that can create a lot of tension with clients. And there's a penalty really in a business sense for being super ethical As a tax preparer. You might piss off clients, they might leave you because you're not willing to stretch the envelope or completely rip up the envelope as many of them want. But then there's also just. David Leary: [00:07:39] This whole cost segregation Twitter thread that also happened this week where he's like. Blake Oliver: [00:07:43] You're jumping ahead. Because that was. That's the other one on this theme. Right. So so but and the the other aspect of this whole thing is the just bad tax advice thing that happens on social media or super aggressive or completely incorrect. Tick tock. Tax advice. Twitter. Tax advice. You know, from people who maybe don't really understand what the rules are, right? Jeremy Wells: [00:08:07] Yeah. And so that was, you know, a lot of the the reaction once the sort of initial reaction to this tweet came out where a bunch of, you know, CPAs, tax professionals, jumped in and responded directly to her and said, hey, hey, wait a minute, slow down. You know, you're you're glazing over. You know, you're glossing over a lot of stuff. You're you're kind of simplifying this too much. Each one of these steps can be in and of itself related to a legitimate tax strategy. And you're conflating some of these things. You're also, again, glossing over that, that there's some nuance to a lot of these things. But then, you know, pretty quickly, the conversation turned and I actually appreciated this. The conversation turned from just, you know, it is her advice here, right or wrong, is what we should be telling clients more toward, you know, how should we even respond to we as an industry, Right? We as CPAs, we as tax professionals, enrolled agents, you know, whatever our role and our credentials are, you know, how should we as the trusted professionals, that's the ones who who's actually working with our clients and customers. Jeremy Wells: [00:09:17] And it's going to have to go back and explain whether this is actually true or not. Right. Or whether we'll actually apply any of these strategies or not in our own clients cases. You know, what's our role both in terms of dealing with customers when they bring us this kind of fun, nuanced advice that they've seen out in the wild? Right? That's one aspect of it. The other aspect of it is, you know, how do we directly engage with this kind of advice out there? Do we do we reply right? Do we directly get in here and get into a debate, you know, which can easily devolve into a pissing match of whether this is right or wrong or, you know, do we not directly engage, but maybe we just try to, you know, flood the ocean with our own content that's actually saying the right things. The only problem is there is anybody actually going to listen to us, you know, when we're dealing when we're up against. David Leary: [00:10:05] This kind of thing, it's like saying like it doesn't feel like you're going to see me some money and the other. Blake Oliver: [00:10:10] I have to say, I have to say like, this is a good tweet from the original poster. Like, it's a very appealing tweet. It's got a nice five step process to getting that deduction that you may not have known you had. Jeremy Wells: [00:10:23] This is great copywriting. David Leary: [00:10:25] This is a great chance of an Instagram video. Advice or not, it's the same tweet on Instagram or it's on Instagram as a video where it's all the things she talks about in that post. But the other thing that was in this thread is she kind of felt attacked, kind of the the old school accounting, white males jumping on a minority, younger female. That's new the industry. And I'm kind of like trying to digest that a little bit because I can see her point of view why she feels like that. But I'm like, I know we knock big firms a lot, right? But we live in a day and age where in theory, you could graduate college now and get your degree, start an accounting firm and not go to work for another firm. Right. And I'm wondering if I'm like, I'm actually going to come up with a reason maybe why you should go to work for a firm. Possibly. And I don't know her background if she did it or not. I can't find her actual website, her business, which is actually the big flaw in this whole thing. Like if you're in have social media accounts, don't you want to drive people to your website so they can engage you as a client? But that's another question. But my bigger question is, so I'm a young green CPA. Are these the types of things where I would learn these nuances? I think you said that word right? Jeremy I learn these in my first two or three years out of firm. Is that kind of is that the right vibe? Is that is that what this really is? It's just it's green. It's just inexperience. Jeremy Wells: [00:11:41] Well, it's interesting, David, the way the way you you frame that sort of background because that's actually my background, you know, about five years ago was when I decided to, you know, when I really committed to becoming an accountant. And, you know, I followed the absolute nontraditional path of, you know, I did not go to meet the firms and I did not compete for internships. I did not try to get a big four job. I found a mentor who was an experienced CPA who focused on tax. And, you know, I relied on him for the first couple of years to help me get started with my firm. So I had guidance. It just wasn't in that traditional format of, you know, I'm working for a firm and I'm being assigned work and I've got a senior and manager and partner overseeing my work. But to your to your question, this is what is difficult about our profession is no, there's nothing in the education that, you know, is offered by an accounting program at a university. There's nothing even in the testing that you would get. Whether it's the special enrollment exam for an enrolled agent or the reg exam, the regulation exam for the CPA that deals with taxes. Right. You're never going to see a question about hiring your kids, Right. In your business, you're just not going to. And so, yes, these are things that, you know, in your first couple years, probably either either through your own client, seeing stuff like this and bringing it to you or, you know, you've been assigned a tax return if you're working in a firm. And so it involves that. And then you've got to go through the learning process If you're on your own, hopefully that means going and doing research, right? Or you have a mentor, you have, you know, an experienced professional that you're not working with that you can run these questions. David Leary: [00:13:28] By and they'll. Jeremy Wells: [00:13:28] Steer you in the right direction. Yeah, exactly. Exactly. Yeah. You know, or you're getting that guidance at work somehow. David Leary: [00:13:39] This episode of The Cloud Accounting Podcast is sponsored by Zoho. I'm sure you've heard of Zoho before. We've probably even mentioned Zoho CRM or Zoho Books on this podcast in the past, but you really know about Zoho. Did you know that Zoho offers an entire suite of solutions to run your firm, including a CRM expense tracking bookkeeping, a full office suite, a support ticket system, and workflow automation? Did you know that Zoho offers a suite of solutions for your clients bookkeeping, including bookkeeping, inventory invoicing, subscription management, and a checkout app? Did you know that Zoho has an accountants program? Did you know that Zoho advisors get free access to eight Zoho applications and a dedicated account manager? If you want to learn more about becoming a Zoho advisor, head over to Cloudaccountingpodcast.com or promo slash Zoho. That is Cloudaccountingpodcast.com Promo for Access Zoho. Blake Oliver: [00:14:33] So I want to actually talk about what is wrong with this or what is right with this point of view. The idea of making a family pumpkin patch trip tax deductible. So, Matt Foreman, we should give him credit for kicking this whole thing off. He loves to stir the pot, doesn't he? Yes, absolutely. He said he took a screenshot of the tweet. And this tweet I should also give credit to is from pink tacks on Twitter. Say you don't know how, quote, ordinary and necessary, unquote, is defined by tax law without saying you don't know how ordinary and necessary is defined by tax law. And that made me think back to that phrase, which I did learn about ordinary and necessary as part of my income tax courses. And the IRS has definitions for ordinary and necessary. And that's sort of the broad way that we decide what we are supposed to decide anyway, what expense qualifies as a business expense as a deduction or not. And so, you know, what is like let's let's let's dissect this, Jeremy. What is not ordinary and necessary about this strategy? Jeremy Wells: [00:15:41] Yeah, right. And I primarily work with small business owners and, you know, this is probably the most common question I get. Can I deduct this? Right. You know, I did the thing and then very slightly differently is, you know, I've got all these personal expenses that I'm paying. What of that? Should I be using the business card to pay for? Right. You know, those kinds of things. And so that's the guideline for that is ordinary and necessary. Ordinary means. Is this common throughout your throughout your industry, really? And so the way I phrase this with my own client is if I polled 100 people that were doing the same thing you're doing right as self-employed people, as business owners, would most of them also be spending money on this thing. So is this just common in your industry for them to be doing that? That's that's half of it, right? And then you've got to meet the other half of that which is necessary, I think. I think this is an unfortunate label for this part of it because, you know, necessary implies that it's somehow, you know, it's required. Right. That that it's you would have to be spending money on this in order to stay in business. It's not quite that strict. It's really is this something that's useful? Is this something that's beneficial to your business? Is it going to increase revenue? Is it going to make your business operate more efficiently? Right. Those kinds of things. So if you can meet those two criteria, right. Most people in your industry are also spending money on this and at the same time, you've got a legitimate business, you know, purpose for this expense that you're going to increase revenue, you're going to make your business more efficient. Then as long as there's not somewhere else in the tax code or regulations or court cases that says, no, actually this is not a deductible expense, then we generally say, yes, this is deductible, right? Blake Oliver: [00:17:32] So I find that helpful that you said, Well, for ordinary it means common. I Googled this and Investopedia says that the IRS defines ordinary as anything that is, quote, common and accepted, unquote. So you said if you polled 100 people, a certain number of them would say yes to that. But like the IRS hasn't actually defined a standard for what is common and accepted, have they? Jeremy Wells: [00:18:01] No, no. And this is true of so many things that are both critical to the work we're doing and also really confusing and frustrating for our customers and client is that we just don't have good working definitions of these things because there are so many edge cases. There are so many times where in your industry, right, you know, you're running a business that, you know, that's publishing podcast, so your microphone is probably ordinary and necessary for that. On the other hand, if I'm running an accounting firm, do I really need a microphone in that business? Well, I don't know, right? Like, can I make a business case for it? And so there are so many edge cases where we need looser definitions so that it's our job as professionals to make cases for whether or not this is actually a deductible expense or not. Blake Oliver: [00:18:51] So is it fair to say then, that the only time the definition matters is if I am in tax court or if I'm talking with an auditor? Because if the IRS doesn't define it further, then it's only going to like the meaning of it is going to come down to what a judge decides or what an auditor decides. Jeremy Wells: [00:19:10] This is why we have an entire we call it the U.S. tax court. It's actually a system of courts. It's a it's a few dozen judges that meet throughout the country. And it's one way that if a taxpayer and IRS disagree on a point and it's worth it to the taxpayer to pursue the matter further, you know, there's some substantial. Financial, you know, cost at stake to letting the IRS have its way on this. Then you can under certain circumstances, you can appeal that to the tax court. And it's a court system at the federal level that exists solely to hash out these kinds of issues. You know, what do we really mean by ordinary and necessary? What do we mean by reasonable compensation? What do we mean by all these different terms by income? Right. You know, we don't have a great definition of income. And it's the most basic concept to our entire tax system, which is based on the income tax. Blake Oliver: [00:20:05] So similar to the definition of ordinary, the IRS definition of necessary is also rather vague. It's, quote, helpful and appropriate, unquote, but not indispensable. Like you said, it doesn't have to be required to run my business. It simply has to be helpful and appropriate. And you define that as does it help me increase revenue? Does it have a business purpose in that sense, which I would agree with? But, you know, I'm trying to see this from the original author's point of view from pink tax point of view. These are so vague that I could I could make an argument like I'm looking at her argument, make your pumpkin patch trip tax deductible if I'm an influencer and, you know, hey, I think I've got a podcast, right, I could make an argument that social media and podcasting is part of my that is my job. It's my main source of income. If I hire my son as a model in my business and I put them all over my social media accounts and then we go to the pumpkin patch and I'm posting all that stuff and I talk about it on the podcast. Why is that not ordinary and necessary? There's plenty of other influencers exploiting their children in this fashion, and if it helps me increase my listenership and my viewers, that leads to revenue, right? So that would be necessary. I mean, and everyone came, you know, people people really came down hard on pink tax here for this. Jeremy Wells: [00:21:33] Yeah. Oh, absolutely. Absolutely. And the way I think about this is and, you know, I don't in my own firm I don't work with any clients that are to the point at which, you know, I would really go to bat for them on on some silly things that they throw out there they or they see on on social media. But part of the both the both the beauty and the frustration with our with our tax code and our in our tax system is that there is so much vagueness, there is so much leeway. And I think a lot of taxpayers, the vast, overwhelming majority of taxpayers and therefore the tax payers and tax advisers working with them don't necessarily either appreciate that or understand that or on the other end, on the other hand, really have reason to take advantage of that. So, you know, what do I mean by that? If you're a big enough player, right? If you've got you've got millions and millions of dollars that you're playing with, and so you've got tax bills that are in the millions of dollars and you want to take a swing at a tax strategy that has, you know, relatively low chance of succeeding. And so we have we have thresholds, right, that we're taught, you know, whether this is reasonable, whether there's substantial authority for this. Jeremy Wells: [00:22:52] We've got all these terms, we've got all these different definitions of what it means, right. To where we as a profession deem this tax strategy viable or not. And it's actually a spectrum. Right. So the question then for us is professionals is, one, do we want to advise our client to put themselves at potential risk by pursuing this strategy? Right. And then to do we want to risk our own professional reputation and license by advising them in that direction and going down that route with them right now. What the what the real joke of of all this is, is that, you know, what what Pentax are suggesting here is probably going to save you something like 15 or 20 bucks in tax. Right. And the reason you get such a strong response of no is that almost no tax professional in his or her right mind is going to go to bat for a client to save them 15 or 20 bucks in tax. It's just not worth it. It's not worth it to the client. It's not worth it to us. Right. And so that's really why you get such a vehement, strong no response to this. Blake Oliver: [00:24:00] So it's not really about could I defend this or is this right or wrong or is this correct or incorrect? It's is this worth my time? And. Jeremy Wells: [00:24:11] Exactly. Blake Oliver: [00:24:12] It's a really for for this amount of money. And then the potential problem it causes you in an audit because you're doing this kind of stuff. I imagine that if an auditor goes into the books and finds the pumpkin patch trip, that's like a red flag. Now I'm going to dig further, right? So I think that kind of got missed in all of this is that's like. What it's really about. Jeremy Wells: [00:24:33] And, you know, there are. It's just you've got to you've got to think about this, right? You've got to look at the return on investment of this. Is this something that if it were to get picked up in an audit and here's another thing, is that the the the the regulations that govern the things that we can think about when it comes to advising our clients on tax matters and representing them, If this got pulled for audit and we, you know, were going to IRS and and you know, trying to hash out whether this was, you know, viable or not, the regulations tell us we can't take the likelihood of whether this would be audited or not and whether we would succeed in an audit or not into account when we're advising the client. So we can't sit there and say, wait, hold on. Oh, well. Blake Oliver: [00:25:25] But that's the core thing that matters. Jeremy Wells: [00:25:27] I know, I know, but okay, so this is what the ethical regulations say. I'm not saying it doesn't happen. Blake Oliver: [00:25:33] Yeah, I know. I get it. Jeremy Wells: [00:25:34] But the ethical regulations say that I can't sit here and say, You know what, Blake? I can save you $5,000 on your next tax return. And I know the IRS is so backlogged, they'll never catch it. So let's just go ahead and do it. That is me being unethical as a tax preparer and tax advisor. David Leary: [00:25:50] What ends up happening, though, is, oh, well, it's very great. Jeremy Wells: [00:25:57] I don't think that's happening out loud. Blake Oliver: [00:25:59] Yeah, but I know. Jeremy Wells: [00:26:00] That that's happening out. Blake Oliver: [00:26:01] Loud. I mean, that happens. Jeremy Wells: [00:26:02] Oh, absolutely. Blake Oliver: [00:26:03] Private conversations. People talk. Jeremy Wells: [00:26:04] So the way I think the way I think it gets phrased probably more often and a little bit more legitimately is that, you know, we can try this strategy. I can't guarantee the IRS will agree with us, but I would be willing to wager that more often than not, and that's generally the threshold we use more often than not any given day that an IRS auditor would pull this. They'd let us, they'd let us do it, they'd agree with it. Right. And that's a legitimate way of thinking about it. Blake Oliver: [00:26:33] But are we allowed to think that way? Jeremy Wells: [00:26:36] We are. We are. We can think of it. In fact, we're told to write like the tax strategies that we're advising to our clients. We need to have we need to meet that more often than not threshold. More often than not, this expense would be allowed. Blake Oliver: [00:26:49] Okay, Got it. Jeremy Wells: [00:26:50] That's that's the. Blake Oliver: [00:26:51] Rule. Jeremy Wells: [00:26:51] But I can't or this this strategy would be allowed. Blake Oliver: [00:26:55] But we're not supposed to advise based on a risk assessment of whether or not. Jeremy Wells: [00:27:00] Exactly like so. So we can't sit there and say, well, IRS is so backlogged, if we filed the return, they'd never catch it anyway. Right. Your return. There's a there's a there's a there's a 0.2% chance your return is going to get pulled for audit anyway. So let's just go with it. Even though we know it's wrong, even though we know it wouldn't pass muster. Right. Yeah, they probably won't catch it anyway, so let's go with it. We can't do. Blake Oliver: [00:27:22] That as CPAs. Jeremy Wells: [00:27:24] As but as, as as anyone who is going to be in the position of advising clients on how to deal with the IRS. Right. We call this the IRS called this practice before the. Blake Oliver: [00:27:35] Irs, unless I'm an unlicensed tax preparer, in which case I can do whatever I want, right? Jeremy Wells: [00:27:41] Absolutely. Yeah. Right. And really, so the IRS distinguishes between preparation and what they call practice or actual representation. Right. And this is this is way beyond what any client is going to worry about. Right. But but you're right in that the because unlicensed preparers aren't going through the the ethical and practical training of how to be good tax preparers and tax advisors, they're probably not going to be thinking in these terms anyway. David Leary: [00:28:18] This episode of The Cloud Accounting Podcast is sponsored by Canopy. As you've heard in previous ads, Canopy brings together all of your firm's mission critical functions in one place client management, document management, workflow time and billing and payments to keep your team organized. And having your team organized is great, but having your team spend less time on mundane tasks is even better. Did you know that Canopy has automation built in? Sure, you can still use an app like Zapier with Canopy, but for most firms, the built in automation in Canopy's workflow module is plenty sophisticated enough. Your team can create trigger automations based on status tasks and subtasks as well as dates, be it upcoming, reached or past. Then Canopy can complete the mundane tasks for your team, like automatically ascending client requests or automatically assigning the next task or subtasks to a member of your team as they complete work for each client. Or how about a really nice email to the client after all the work's been completed? Can it be integrates with QuickBooks Online? Xero FreshBooks Crm's form builder, spreadsheets, calendars, email and of course, Zapier. They have a mobile app, centralized file management filled with PDFs, a client portable task management, and the list goes on and on. To get a demo of Canopy and to receive a $40 Amazon gift card, head over to Cloudaccountingpodcast.com promo slash canopy that is Cloudaccountingpodcast.com promo forward slash canopy. Why? It's time to streamline your firm with Canopy. Blake Oliver: [00:29:46] All right. I got another tweet for us to digest here. This is another gem from Matt Foreman this week at Foreman Tax Law. Tell me you're on a roll. He is, man. Tell me you're taking incredibly aggressive tax positions that won't withstand audit without saying you're taking incredibly aggressive tax positions that won't withstand audit. I'm looking at you at Sweaty Startup and he is sub tweeting a tweet from sweaty startup Nick Huber, who wrote, Most CPAs act like they work for the IRS. Instead of building a case and getting aggressive within the laws, they take the easy road and encourage their clients to pay more than necessary. Easier for them and less headache when an audit does come, fire those CPAs. And I think this one set off an even bigger firestorm. David Leary: [00:30:31] And that guys right see it's like 250,000 followers. He's got a significant audience. I guess he falls into that. People were starting to say it's a real estate voice. The real estate bro's like it's in that space, which is actually kind of funny because I would argue that he just described most real estate agents, right? Like, they are very like, Oh, we got to follow the laws this way. They're not very aggressive on when you go to purchase your house or sell the house. It's kind of I find that actually the most ironic about his tweet. Jeremy Wells: [00:30:57] But but but then on the business side and I have had and have a lot of real estate agents and brokers as clients when it comes to their own businesses. They're a lot closer to what Nick is saying. There are a lot closer to we want to be able to deduct all these things. We want to be able to defer some of this income or not report it and these kinds of things. So they're pretty aggressive when it comes to their own businesses and taxes. And then just like us in our profession, Right. Like you're saying, they have to do their due diligence when it comes to their work for their license and those kind of things. David Leary: [00:31:26] And I apologize. That's an internal storage space. He's like a self-storage bro. He's one of those guys. Blake Oliver: [00:31:31] Yeah. So which has a lot to do with real estate, right? Yeah. So if you're building those self storage units. So one just went up in my neighborhood, by the way, People have a lot of crap, right? Like, I don't I don't want to own enough crap where I have to have a separate space to go put it. Jeremy Wells: [00:31:47] Yeah, yeah. But I can. It's like they build one and then a few blocks down, they start building another one. I mean, they're just kind of out of control. Blake Oliver: [00:31:54] The stats on how much stuff people have in storage in this country is just insane. It's like the only place in the world where we have so much crap that we have this entire multibillion dollar industry. But I digress. Yeah. Okay. So this is related to me in my mind. This is related to the previous tweet. It's just a different variation on a theme, which is, I think, a lot of clients well, some clients get frustrated with accountants and tax payers and CPAs because we we say no a lot. We say, nope, can't take that deduction. I ask you, you're like, nope, not a business expense. I want to stretch the envelope. I know, I know that my friend is deducting the Porsche. You know, I want to do that too, right? And my my CPA won't do it. Now, this is a much bigger thing. This is talking about cost, segregation and taking aggressive, being aggressive with cost, segregation, real estate, which is basically, if I understand it correctly, like accelerating depreciation so that you get like a big deduction in your initial years of owning something. And like you can basically avoid paying tax for a long time. Right. And hopefully until you even sell the property. So it's sort of like just deferring all that crap forward and really save can can really help you a lot with cash flow, right? Jeremy Wells: [00:33:08] Absolutely. Blake Oliver: [00:33:09] But also can like is complex and we get people doing these cost segregation studies that don't really know what they're doing and it you know, they do it the wrong way anyway. But like that's I want to get the details of like cost segregation and all that. But I just want to get into the the thinking around this whole mentality, right. Which is, you know, what's my job as a CPA or an E.A. when it comes to clients is like, I don't want to be the one saying no. I'm thinking as a business owner, right? I'm representing these clients. I'm helping them save money. I want to be able to tell them yes. I want to be able to say yes and help them save as much money as possible. And I feel like there's this sort of divide in our profession where you've got the people who are like, Really? I'm going to play by the rules. But then you have all these people that are out there doing crazy tax credit stuff and really aggressive stuff and conservation easements and R&D tax credits without really checking things. And they're making bundles of money. They are they're they're growing fast because they're giving the business owners what they want. And those of us who are say, more ethical, if you want to call it that, or more by the rules. Like we we don't grow as fast. Right. Because you're at a disadvantage potentially. David Leary: [00:34:23] Well, then not even this guy. The this this Nick Huber guy, the sweaty startup on Twitter, he eventually in this thread talks about how he found this other accountant. He found Mitchell Baldridge Baldridge, CPA on Twitter. He's got like 50,000 followers that like he found somebody like you said, said yes. Right? Jeremy Wells: [00:34:46] Yeah, that's right. If you're if you're if you keep firing your your advisers, you know enough. You'll eventually hire one that will go along with you. And that's when you know you are not hiring an adviser. You're hiring someone to execute. Right. And this is something that I think we in general as a profession can can fall into the trap of is not clearly distinguishing for ourselves and for our client what our you know, the difference between those two roles. Sometimes we're executing work for you, right? Sometimes we're doing your bookkeeping, sometimes we're, you know, preparing your tax return. Sometimes we're running payroll for you. But then other times we're advising you, right? Other times we're telling you, look, these are some tax strategies we can consider. These are some business strategies we can consider. And those are two very different things. And if, you know, you could be doing a great job on the bookkeeping and preparing the tax return, and if the customer or client doesn't like the advice that they're getting or, you know, the response that they're getting when they bring these ideas to you, then everything on the execution side doesn't matter right to them anymore because they just want to get their way. But, you know, you got to think about it, right? Like even the Mafia, Right. They've got they've got CPAs working for them, they've got attorneys working for them. They've got real estate and insurance agents and bankers working for them. Right. You know, eventually you will find somebody who will work for you and carry out the strategies that you want to carry out if you're a client. David Leary: [00:36:18] And I imagine going back to like you talked about the risk, right, of, oh, this is maybe $25 may not be worth it. But like this guy, he's he claims he has this pin tweet how in the last 36 months, he and his partner, they've sourced finance and acquired $64 million worth of self-storage. Right. And raised $21 million investor capital. At some point, the accountants also got to be like, oh, the money I'm going to get from this client is worth my risk of these tricky strategies. Is that a decision made at firms? Jeremy Wells: [00:36:47] Yeah, well, I mean, absolutely. Think about it. You know, if you're if you're a small firm owner and you're running a primarily, you know, tax prep firm for, you know, mostly 1040s and small businesses, you know, and you're charging, you know, and I mean, the fees are out of control. And this is this is on the low end to me. But, you know, this was a topic for a whole other show. And another topic you guys discuss a lot before. But let's just say, you know, you're running a tax firm that charges four or 500 bucks for a 1040. Right now, if you a personal tax return and you file that that return for a client and then six months later, they bring you a notice saying that, you know, you left something off, you left a form off and it's going to make a 10000 to 20000 different difference in tax. And you've already been paid the $400 for the 1040. That was six months ago. You've moved on, right? You've got other clients who need you to do work for them and all that. Now you're sitting here and the cost of having to deal with that notice of having to deal with that potentially angry client relative to the work you did for them and the price you charge them for that work. Jeremy Wells: [00:37:55] It's much greater than if you're an accountant working with clients like Nick where you know, they're doing multimillion dollar deals and they're paying you, you know, five, six figures a year in fees and he might get the same. Notice the number, you know, on the notice of what he owes might be different. But, you know, responding to that one notice, which because it was such a much bigger transaction and a much bigger portfolio of transaction in the first place, you probably anticipated that notice. So you built that into your fee structure, your capacity planning, you know, your business model. And so you're more prepared for that. And so you can have a relatively simple, straightforward notice coming into a small tax firm that just blows their capacity planning out of the water where somebody like Mitch Baldridge can get a notice, you know, a 10 to 20 times bigger in terms of the financial impact to his client. But he's ready for it. Blake Oliver: [00:38:49] That's a really good point, Jeremy. Like, it really depends on the the type of client you got, the the the fee structure, how much they're paying you and like your capacity and your firm, larger firms can do this kind of stuff because they have the capacity to deal with the fallout of something going wrong. David Leary: [00:39:07] Maybe it's your to the. Jeremy Wells: [00:39:08] Model I don't know anything about. Well, and I don't know anything about Mitch's firm and how he runs his firm. But, you know, if I were in Mitch's position, I probably wouldn't be the one directly handling that notice. I would have referral partners, I would have attorneys. I would have tax resolution specialists. Right. If not inside my firm, then definitely in firms that I'm working with. And so, again, you know, I would have the strategies in place to handle this kind of thing to where to me, you know, it's just it's a blip on the radar. It's part of it's part of the cost. David Leary: [00:39:43] So so if I'm pricing my services, I could. Have. We can do our aggressive tax strategies, but that plan is more expensive than our regular tax plan because there's a high probability I'm going to incur a bunch of other costs with that down the road. Jeremy Wells: [00:39:58] And and the client probably knows this, right? Like, you know, Nick knows some of the things that he's doing that he's talking about. They run into, you know, this is another thing that, you know, your typical W-2 earner who maybe has they've got some wages in salary, they maybe have some interest in dividends on their tax return. But that's it. There's very small, almost nonexistent margin of error there. There's no room to play with. There are no aggressive tax positions to take on that return. You get somebody like Nick where he's doing, you know, seven, eight, nine figure transactions multiple times a year. Well, the way we're reporting these things, the way we're taking deductions against that, the way we're trying to apply credits to all of this that are so on the spectrum of aggressiveness, you know that you use his word, right. You can go much higher on that spectrum. And so therefore, his accountants are going to build that in or decide whether they want to build that into the fee structure. David Leary: [00:41:01] And that makes a lot of sense. This episode of The Cloud Accounting Podcast is sponsored by Alicia Blake, and I talk a lot in the show about client experience. A great client experience may be the biggest impact on a firm success. Did you know that Alicia is so focused on improving the client experience that they have even gone as far as trademarking and I quote client experience 2.0 licious all in one client experience starts with your own firm's experience by allowing your team to do more together, having everything in one place, like secure messaging, client facing task file exchange and storage, electronic signatures, client invoicing and client emails. When you improve your team's experience, your client's experience will follow with Lucio. Clients can use the app on their phone to easily assign anything, scan and send you documents from anywhere. Send messages and best of all, pay you if you want to save 40% of your time by having everything in one place and start delivering a client experience. 2.0. Cloudaccountingpodcast.com Promo slash Lucio That is Cloudaccountingpodcast.com Promo Forward slash Elyse CIO. Blake Oliver: [00:42:16] It's like we have in this country. We have two economies. We have the economy of the wealthy and we have the economy of the middle class. Right. And the the the people who serve the truly wealthy and the tax professionals and the accountants. And, you know, that's like that's a lot of most CPAs don't serve the middle class, really. Right? Like, it's not it's not a thing. And so there's a lot of confusion, I think, when we talk about this stuff online, like you're pointing out, Jeremy, that it really depends on who you're talking about, what business you're talking about, what kind of firm you're talking about, because the same it doesn't apply equally. There's no but that's what's happening here is we're having a debate. Yeah, we're having a debate between like small preparers who are serving average Americans and an entrepreneur who is, like you said, doing multi million dollar deals throughout the year constantly. And what they need and what they can get is is different. And unfortunately, the tax code is set up so that unless you are a millionaire, it's kind of hard to take advantage of a lot of these strategies. But then you've got people pitching these strategies that are for millionaires to average Americans. David Leary: [00:43:19] That you just. Bridget That's it. Blake Oliver: [00:43:21] Right? Jeremy Wells: [00:43:22] Or they're just posting about it on Twitter. And so you've got, you know, starry eyed clients that are chasing the American dream and they come across a tweet or an Instagram post or a TikTok video telling them about this, you know, cool new tax strategy, like they just discovered it and that no CPA knows about it, even though. Yeah, we all know about it, right? Yeah. And you know, it'll you know, it saved them 30 grand in taxes last year. It saved them 50 grand in taxes last year. And their CPA, you know, helped them get it. And you know, you can sue as a as a layperson, right, As a as your average taxpayer, you're consuming this and then you're going to your CPA and you're saying, wait, my guy told me I owed last year. What's up with that? Right. Like, how do I get this strategy? Well, there's the tax strategies for somebody who's there, who's where you want to be, and where maybe you'll be there in five, ten, 15 years. And then there's the tax strategies available to you today. And I'm sorry if you're bringing home a W-2 with high five, low six figures and that's really it. You're not self-employed. You don't own a real estate portfolio. You're not day trading on the stock market or in crypto, right? You're not doing these things to the degree with the level of intensity. You know, the the five, six, seven, eight, nine figures that that these heavy, heavy hitters are playing at those strategies. They're just not there. And the core even if you were eligible, even on the very low end you were eligible for some of these strategies. The administrative and professional cost of actually implementing them in your case would far exceed any potential profit you could ever hope to get off of them. And it's just not ever going to be worth it to you. And that's what we're saying no to. We're saying no to you right now, given your situation. I'm not saying no. This is a bad strategy, Right? I'm saying, no, this strategy isn't advantageous to you today. Blake Oliver: [00:45:17] But the problem is the way and I understand that. And the problem is the way people hear that is they say like it sounds like you're saying I'm too poor. You know, like I. Jeremy Wells: [00:45:26] Yeah. Blake Oliver: [00:45:26] And nobody wants to hear that. Jeremy Wells: [00:45:28] Exactly. You know, go, go, go, go. Put together a $54 million, you know, real estate transaction. Right. And then come back to me and we'll and we'll talk. Blake Oliver: [00:45:37] Well, Jeremy, thank you so much for joining us for this segment on tax Twitter drama. Perhaps we can make this a regular segment if it continues. We'll have to see if. Jeremy Wells: [00:45:47] I think that's a great idea. David Leary: [00:45:48] Yeah, it could be its own podcast. Jeremy Wells: [00:45:49] I'm I'm a fan. David Leary: [00:45:51] False tech tax nerds. Blake Oliver: [00:45:54] There should be there should be a tax Twitter podcast. We should we should develop that. David When someday when we. Jeremy Wells: [00:45:59] Go to. Blake Oliver: [00:46:00] Jeremy, though, you have your own podcast that we can direct folks to the CPA Advisory show by Jeremy Wells, CPA EY and Chris, how do you say Chris last name? Jeremy Wells: [00:46:11] Chris Hirschhorn. Blake Oliver: [00:46:12] Chris Hirschhorn, CPA. Cva It's a show about advisory services, building and running an advisory firm and how we use advisory services to help our clients. We look forward to sharing many great episodes with you so you can listen to that on Spotify. You can listen on Apple Podcasts. Jeremy How long have you been doing your own show? Jeremy Wells: [00:46:32] All right, So Chris and I started this back over the summer, and I think, you know, as of today, we're about 20, I want to say 20 to maybe 23 episodes into it. So I think we're past the threshold of where most podcasts die. We're not quite to the threshold of, you know, we're we're we're competing with you guys. Definitely not anywhere near that yet. But, you know, it's not a competition, right? We're all we're all trying to, like we say in the tagline there, you know, we're trying to come at this from the perspective of helping based on our own perspectives and based on those of the gas trying to help CPAs and farm owners, even non CPAs, to run better practices and businesses. We've actually had some guests that aren't. A lot of our guests so far have been CPA's, but some of them aren't. You know, we've had attorneys, we've had those working in the industry who aren't credentialed. So and even some non accountants as guests. We've had some people come on, talk about operations, talk about different aspects of running a business and ways that, you know, we as advisors can help our clients. Blake Oliver: [00:47:33] And I was just listening to the episode, the most recent one on October 26th with Kelly Mann talking about how she went from being an auditor to starting her own firm, a niche firm in is it it's audits of are they for one case Yeah. Jeremy Wells: [00:47:50] Employee benefit programs. Blake Oliver: [00:47:52] Audits of employee benefit programs only and then building software because she couldn't find software to help her run that type of practice. So that was pretty cool. And I think the app is called Kelly's. Jeremy Wells: [00:48:00] Story is incredibly inspiring. That was a really fun episode to do with her and talk about that. She actually benefited from the AICPA Start up accelerator and and manage to build a piece of software that yeah, is changing the way her firm operates and lots of other firms. So it's some pretty impressive stuff that she's doing with that. Blake Oliver: [00:48:21] Well, Jeremy, thanks for joining us. We're going to keep on going with app News. I know you're busy. You're in New York, you're at an AICPA firm Get together. So we'll let you go back to that. David Leary: [00:48:31] To everybody. We say hi. Blake Oliver: [00:48:33] Yeah, tell everyone we said hi. Jeremy Wells: [00:48:35] Absolutely. All right. Thanks, guys. I appreciate you having me. This is a this is an honor and privilege. David Leary: [00:48:39] Thank you, sir. Blake Oliver: [00:48:40] Thanks, Jeremy. Hope to see you again soon. Jeremy Wells: [00:48:42] Awesome. David Leary: [00:48:43] Do you have any non app news before you jump into app news or is that kind of the big one? Let's scroll. Blake Oliver: [00:48:48] Let's see. What do I have? David Leary: [00:48:51] I have the. Blake Oliver: [00:48:52] Most. David Leary: [00:48:52] Stories you could touch on, but we could even do that next week or unless you want to do that next. Blake Oliver: [00:48:58] I think we should just go into news because we only have about stat news. 10 minutes left, so. Yeah. Okay, so, uh, let's do it. Kick it off. David Leary: [00:49:12] David So app news, this isn't kind of app news because apps are going to use this service, but I think we've talked about this before. For the last year, year and a half, how the feds are building a new program called FedNow. Blake Oliver: [00:49:26] Yeah, they're building their own instant payment network. David Leary: [00:49:30] Along with I think the cousin products are they want to make the post office banks and they want to have their own digital their digital currency. And so the reason this came up this week, so the big money 2020 conference was happening in Vegas and that's all the fintechs get there and talk about all the great things they're building. Well, the feds were there and they had a whole booth and there's pictures on Twitter and they were there pushing this and they had a big keynote. And they're talking about and I'll let you play the video, but essentially they're saying they're 6 to 8 months from launch. So if you think about you have your OCC right, which has been around since the seventies, the clearinghouse, which everybody's very familiar with, it's kind of big batch text files moving money around. And then the banks recently tried to get together and they built something called RTP real time payments, but they're not letting everybody play. There's like 20 banks, so that's 1000 banks. Blake Oliver: [00:50:17] That's like Zelle. That's what Zelle. David Leary: [00:50:18] And Zelle and that stuff. Exactly. They don't let all the banks play. And so the credit unions are cut out, etc.. So I'll let you play this video because it kind of paints a picture of what's one piece of this that's coming very soon. Blake Oliver: [00:50:29] Okay. So this says how the FedNow service will work. FedNow Presentation: [00:50:34] In today's fast paced world. Time is money. More people, businesses and organizations are demanding instant payments. That's why the Federal Reserve is developing. The FedNow service a safe and efficient instant payments infrastructure that will modernize the US payment system. The FedNow service will give financial institutions the opportunity to innovate, enabling their customers to send and receive money in seconds, 24 hours a day, seven days a week, 365 days a year. Funds will settle between financial institutions in real time, which means there's no buildup of interbank obligations, and end users will have access to the funds in seconds. How will the Fed and service work? Blake Oliver: [00:51:18] Okay. And then it goes on for a few minutes talking about how it actually worked with the example of a coffee company that needs to send a quick payment to a vendor to make a quick order. And I mean, basically, it sounds a lot like what we've got now. David Leary: [00:51:32] I would, except for the French. Blake Oliver: [00:51:33] Understand. David Leary: [00:51:34] That's the difference. So instead of using a Bill.com and all these app payments processing products and it's all instant payments now built on their rails. Blake Oliver: [00:51:44] And what seems to be different is that the FedNow system actually debits and credits the accounts at the two institutions, the credit union and the bank, the sender and the receiver. It actually goes in and makes the entry and eliminates the need for inter-company bank reconciliations. And that's what leads to the delay with the FX network, as I understand it, is that there's these reconciliations that have to happen on a daily basis, whereas this is instant. They're actually no more reconciliation accounts happening. David Leary: [00:52:19] So that's how you batches anymore. It's individual transactions. Blake Oliver: [00:52:23] It's individual individual debits and credits, direct intermediary. David Leary: [00:52:28] Yeah. And they were there like practically. Blake Oliver: [00:52:30] Practically speaking, like the only difference between this from the endpoint user standpoint is going to be it's instant. David Leary: [00:52:39] Yeah, I think that in theory the apps won't change their UI, so they'll just be using a different rail underneath the covers. But what's interesting about this is yes, the examples it gives the credit union, smaller banks, they're all going to be on board. But who they're really speaking to at these conference? At this conference, money. Money are the third party app developers, all of these apps that we use. And so if this really is going to be available 6 to 8 months from now and they're telling developers to get on now, this is going to change everything. It's going to change business models because like some of these apps charge, if you want, you know, QuickBooks, you know, you're paying whatever, $10 to get next day or same day, right? All these business models are making money on one day are going to go away. Right. Blake Oliver: [00:53:18] And then what they don't talk about here. David Leary: [00:53:19] Is a fee. Yeah. Blake Oliver: [00:53:21] They don't talk about how much it costs. So how much is it going to cost an app to use the FedNow network that's not in here. I'd be curious to know if it will be cheaper. I feel like unless somebody comes along and somehow disrupts QuickBooks, like QuickBooks makes a ton of money from payments, they're not going to make it cheaper. David Leary: [00:53:38] Yeah, but they're trying to treat this like a utility, right? It's like it's it's this it's infrastructure of the country is the way they're kind of thinking about this. Because if not, people are going to use alternative means Bitcoin blockchain. They're going to bypass the banks and bypass the rail. So it's just really interesting that there they came so hard, they had a booth, you know, they're giving out schwag, right? Like the whole thing. So it's coming. So we'll keep an eye on it the next 6 to 8 months here. Blake Oliver: [00:54:06] Hey, this is not app news, but I have a fun, a fun story that I want to share with you because it's just too good and it's on the tax topic. So we'll see if this video plays here. This is a tweet from Dionne Grant. Tyler Perry revealed he once fired his accounting team after learning the IRS owed him $9 million in business. It's okay to make mistakes. It's okay to learn, but do learn. I'll let you make a million mistakes. But you can't do the same thing over and over. And so then here's this video of Tyler Perry speaking. Let's see if let's see if I can play it for you. And here we go. Tyler Perry: [00:54:46] So this audit went on for three years. I'm spending hundreds of thousands of dollars in accounting accountants for the audit. And I was getting so mad and so frustrated, I was like, Why the hell is this going on? What is it? And what I realized in my frustration is that, wait a minute, there's something to learn here. Sit back and just see where it goes. We get to the end of the audit and the IRS owed me $9 billion. They owed me $9 million. And and all my accountants come running say, Oh, my God, isn't that great? Isn't that great? I was like, No, hell no. How did you miss me paying $9 million? Everybody goes, So I had to stop going to H&R BLOCK for my taxes as someone. I learned in progress. And it's okay. Listen to me. In business, it's okay to make mistakes. It's okay to. To learn. To have to learn. But. But do learn. Don't let it keep happening over and over again. And that's one thing about me. I'll let you make a million mistakes. But you can't do the same thing over and over again. And that's how I run my business. Okay, here's the mistake. Let's fix it. Let's move forward. Blake Oliver: [00:55:58] So that's the ultimate insult. He called his accountants H&R BLOCK. David Leary: [00:56:02] That's pretty funny. Blake Oliver: [00:56:04] Yeah. Yeah. But maybe, hey, tying this back to our discussion, maybe his accountants were being too conservative and they were overpaying tax, and they. They didn't realize he qualified for all of these credits and deductions. And here he is angry that he overpaid his taxes. David Leary: [00:56:22] Yeah, they're trying to meet that 110% threshold of the previous years or who knows, right? Blake Oliver: [00:56:27] I don't know. Right? David Leary: [00:56:28] Yeah. Blake Oliver: [00:56:29] I mean, Tyler Perry makes Tyler Perry makes a lot of money, though. So, yeah, it could it might not be actually a big deal. But for him it was And. David Leary: [00:56:35] I'm glad. Blake Oliver: [00:56:36] It's such a big. David Leary: [00:56:37] Because there's a lot of articles that keep flying by and they click in the article and there's nothing there calling the article. I see the headline is great, but. But you found the video on that. I saw something a little concerning in a way. Yeah. So this was an article that was in another Bitcoin kind of pumping site called Coin Gap Coin. And the title of the article is this big four accounting firm. Much is Metaverse client experience. And it's talking about how Ernst and Young it's going to provide metaverse based network experience to their clients. Right? And it's very all the UI. This is UI bragging about the metaverse and it's a PR release essentially. Right. But the danger in this this happening, the danger and I'm starting to feel like it's irresponsible if you're big accounting firms. I get it. You want to pretend you are all crypto friendly and you're all of this. But what it's happening is, is that's becoming marketing material for the scammers and the latest crypto scheme to show how legit crypto is. Right? Like they're they're using they're utilizing they're stealing the reputation of UI to show. People are safe. Blake Oliver: [00:57:49] Right. So as I was preparing for this show this morning, I was looking at these YouTube videos and an ad came on and it was some guy pitching digital real estate investments and it was buying land in the metaverse. David Leary: [00:58:08] You use an accounting firm as an example of who's done this to make everybody feel safe. I didn't I didn't want to watch it. He should put that in his video. Blake Oliver: [00:58:15] I didn't want to watch the whole ad or like click, because if you click on that, then I'm going to get all of the scammers in my ads. But it did make me think back to this other story that I saw in accounting today. Wolters Kluwer Plants Flag in Metaverse Tax Accounting and Compliance software provider Wolters Kluwer announced that it is now established a presence in the metaverse. Specifically, it has bought virtual land in the blockchain based platforms decentraland insomniac space. David Leary: [00:58:45] And so so when they do this, this is exactly my point, because now that guy who made that video trying to get you to buy land, look, this this accounting firm did it must be okay, right? Blake Oliver: [00:58:55] So it legitimizes something that's completely idiotic because we talked about how a lot of these metaverse platforms have maybe dozens or at most, hundreds of users a day. And it's not like a real thing. Nobody's doing this right now. And so if you buy land in the metaverse, you're wasting your money or you're just spending it on PR. But I think the funniest thing about this whole thing is that Wolters Kluwer is like the tax software provider that does not have a true cloud tax product. So instead of investing, instead of investing and making their product cloud compatible and cloud first, they're freaking buying land in the metaverse. Like what a complete disconnect. Like, Oh, so maybe I can go into the metaverse and I can interact with the servers virtual like servers in my office that I'm using to host your software. Like, you know, like, what's the. David Leary: [00:59:56] Yeah, I don't get it. It just beat it. But I do think that these publicity stunts accounting firms are doing with crypto in the Metaverse and Bitcoin and all this stuff they're doing because they want to look like we're hip and we're cool and we're on top of stuff and get all the buzzwords on our blog post are being exploited by the scammers. Blake Oliver: [01:00:14] Yeah, well, I got another one here and then we're almost out of time, so I'll let you take the last story the IRS is going to put call and Q out of business. They are eliminating lawn cutting. David Leary: [01:00:26] Good to go. Blake Oliver: [01:00:27] Yeah. So the practitioner priority service line has been clogged up by this service called Call and Q, which puts bots in the in the queue and then you can pay Colin. Q hundreds of dollars a month. And by those you're by your way to cut in line essentially. And the IRS said in an email on Friday to tax professionals that it has initiated a pilot program that now requires callers to repeat certain phrases before they're transferred to an IRS phone. A sister. They're using speech recognition technology to ensure a live person is calling and not a mechanical advice and call. And Q said basically on its website that it's suspending its service, it's shutting down because it can't deal with. David Leary: [01:01:08] This sort of blogpost. And he has some quotes on this. But apparently, you know, they sent this letter that said soon, but apparently it meant four days later, because this is a quote that we said it looks like they started this morning on the with the practitioner line. They are now asking questions like what is the sum of four plus one because that's how they'll know you're an accountant. You'll have to answer the question correctly. Blake Oliver: [01:01:31] I'm a bit disappointed that Colin Q doesn't have AI speech technology where it can defeat this verification because it's it's pretty good now, but I guess they don't. David Leary: [01:01:42] So but I think the next step is they're going to you're going to you're going to record your voice, your voice. But even that eventually could get hacked because calling you could call you record your voice and then have that re-engineered. There's probably ways to do it. Blake Oliver: [01:01:56] It's like the the editing software we use script has this ability where you can feed it 20 minutes of your voice speaking, and then it creates a model, your voice and it can it can, you know, speak what you type. It's not totally perfect, but it's pretty darn good. David Leary: [01:02:11] It's probably say five. It could probably say five good enough. Blake Oliver: [01:02:14] Yeah. See five in your in your voice. David Leary: [01:02:17] Yeah. Blake Oliver: [01:02:17] Yeah. So I got lots more stories, but they're going to have to wait until next week because that's, that's all we got. That's all the time we got for this week. Tax for everyone who joined. David Leary: [01:02:29] Us for a week. Just give us a break. It's just too much. Blake Oliver: [01:02:33] Thanks to everyone who joined us on the live stream on YouTube. Subscribe to our YouTube channel The Cloud Accounting Podcast to get notified when we go live. We usually do it Fridays at 10 a.m. Pacific. And so you hit that. Subscribe button, you'll get a notification on your. David Leary: [01:02:49] Phone and it works. I got it after I forgot to put Do Not Disturb on, so I just got it today. It happens right away. And you see, we're live. Blake Oliver: [01:02:57] And that way you're getting the news ahead of everybody else because it takes us a few days to get these episodes out on to the regular feed. I'll see you here next week, David. All right. David Leary: [01:03:08] Bye bye, everybody. Time for the classifieds. Are you still paying 1% for A to receive money from your customers? With you collect, you can pay as little as $0.30 per transaction. 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