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BOI On Again Off Again, Bench Shuts Down, Dying Language of Accounting · The Accounting Podcast

• Attention: This is a machine-generated transcript. As such, there may be spelling, grammar, and accuracy errors throughout. Thank you for your understanding! Blake Oliver: Lyft Inc. has filed a lawsuit against the city of San Francisco, alleging that the city overcharged the company by $100 million in taxes between 2019 and 2023. David Leary: Coming to you weekly from the OnPay Recording Studio. Blake Oliver: Hello, and welcome back to the Accounting Podcast, the number one podcast for accountants in the world, your weekly news roundup in the accounting profession. I'm Blake Oliver. David Leary: And I'm David Leary. And Blake. Every time you hold your arm up, it looks like you're holding an additional microphone. What is going on here? Blake Oliver: It's my hand brace. I broke my hand, David, this week when you got. David Leary: You heard about the. That boy was back on. You slammed your hand on the desk. Blake Oliver: Yeah, I was, I was I was running to to file our boy report on uh what was it, December 23rd, just a few days ago, when the Fifth Circuit Court of Appeals granted the government's emergency emergency motion to stay. The injunction for Bowie, which reinstated the reporting requirements. And and then I heard, uh, yesterday that the same court vacated the order, and I stopped really fast. I was I was about to go fill it out, and I stopped and I fell. I was on my bike and I broke my hand. So thanks a lot. Beneficial ownership information reporting. That's I was writing my my mountain bike. Uh, of course, I had nothing to actually do with Bowie, but we're going to talk about that today. Uh, we are going to talk about Bowie's on again, off again situation. What is happening with that breaking news. We've also got bench shutting down accounting. Startup bench announced that it is closing its doors with very little notice as of this morning hours ago. Thanks, Michael Li, for sending us that. Um, and we'll talk about that. I got some Billy Long stuff. The new IRS commissioner. Welcome everyone who has joined us on this Friday, December 27th, uh, as we head into the new year. Uh, a good number of you in the office, I take it in the home office, perhaps. Great to. Great to have you all with us, David. How's your how are your holidays going? David Leary: Pretty good. A lot of recovery. I had a little minor back surgery. So both of us are hobbling a little bit right now. And with injuries. Yeah. Um, I had a microdiscectomy to try to pull a disc away that was pushing on static nerves. You might, if you watch really closely some of our previous episodes, you might see my face and my face wince in pain occasionally on some old episodes standing here, but I think I'm doing okay, all things considered. I'm not on drugs anymore. I'm. I have a, you know, a little no more pain meds, so I'm tapering off. Blake Oliver: Unfortunately, I'm gonna have to get surgery on my hand. So that's on. That's my New Year's. That's what I'll be doing. I'll be watching the fireworks at home on painkillers, I hope. Uh, welcome, Luke. Luke says sad, sad day. Lots of people who need jobs and bookkeeping and tax. Yes, regarding the bench shutdown. And we'll talk about that. But first let's talk about beneficial ownership information reporting boy reporting. So like I said it is now on hold. The nationwide injunction that pauses boy reporting requirements is back in effect. So there is currently no requirement to do so to file. And I think David it's a good thing I didn't do anything yet. I didn't make it to actually file because we're going to we're just going to hold. We're going to. David Leary: Wait, put it on our to do list and took it off and put it back on again, because I thought for sure we had to do it this time. Blake Oliver: Yes. Um, and a quick go ahead. I said. David Leary: The months. It's been interesting month because we talked about this way back in March of last year. I was looking back at old stories. That's when it was declared unconstitutional. So way back in March of 2024, it was. Blake Oliver: In a very narrow way. It was an Alabama federal court, and it was a limited injunction only applying to the plaintiffs in the case, which were the National Small Business Association and its members. But that was the first hint that something might be coming bigger than that. David Leary: And so it's been this dance. Not a lot of people have been filing it. And then December 3rd, we actually talked about this, what, two weeks ago, we named the episode when POI was off. It was dead. And then I think during the compromise on the shutdown, there was some Boy Vincent news in there. But just the last this week. So December 23rd, they lifted the injunction reinstating the requirement. So as of December 23rd, we were supposed to file again, and then as of December 26th, which was yesterday, they reinstated the injunction, pausing the requirement to file. But as of right now, the deadline did get extended from Vincent to January 13th. If you actually have to file, it's now a January 31st or 13th deadline instead of. Right. But we don't. Blake Oliver: We don't have to file. David Leary: There's no filing as of this second. Correct. Blake Oliver: Right. So there's where we're at. Uh, yeah. Hopefully we don't have to do this. As I've said on the show before, I feel like this law is unconstitutional. Uh, just given how broad it is, an LLC that only operates in one state should not have to file with a federal agency based on the Commerce clause in the Constitution. It just doesn't. It doesn't add up for me. But we'll see. We'll see what the federal courts think. Maybe this will go to the Supreme Court. We'll find out. Um. David Leary: Vincent should have pushed this out to January 21st. Then they could have had maybe Trump put this on his little day one agenda. He could have shut down. Shut it down. Yeah, I'm. Blake Oliver: Pretty sure that the bureaucrats at FinCEN are not in favor of shutting down the program they've worked so hard to create. That, of course, will not detect any fraud. You know, the funny thing about it is, and this is why I tell accountants not to stress about this. And and business owners too. Is that to be eligible for these fines of $500 a day, whatever it is, which seems ridiculous, it has to be willful. You have to willfully misreport the beneficial owners. So that means you've created legally. It means you've created like some sort of trail evidence that you intended to get it wrong. So as long as you just do your best effort, you're most likely going to be fine, right? That's what that's what FinCEN has has said, in essence, is just do your best. It's like 1099 reporting, right? When was the last time anyone got in trouble for doing their 1099 wrong? You get in trouble for not doing them. You don't get in trouble for the wrong amount or just file it the wrong way. Or like getting somebody tin wrong. I mean, I've seen ten mismatched numbers come back from the IRS for years and years and nothing ever happens. So just do it. All right. Welcome, drew. Drew says hi, dudes. Starting my second busy season internship in a short couple weeks here. Wish me luck, I need it. You're gonna do great, drew. Good luck. Uh, Sean says good luck. Drew. I'm working two jobs now. I'm both in accounting, so I feel you. All right, let's talk about bench. David Leary: Yeah. That's good. So Luke Frye, CPA, who's in the who joined us in watching the live stream on LinkedIn. He actually was Bench's first accountant. No way. It's nice that he's in the audience here. And then I think after that he went to pilot. And I think right now he's at puzzle. So he's had a lot of experience in this. So Luke would be great if you could chime in on some of your thoughts. What are the reasoning for this shutdown at bench? It'd be great. Blake Oliver: Here's the homepage of bench. Bench Co notice of service closure. So it's right on the homepage. We regret to inform you that as of December 27th, 2024, the bench platform will no longer be accessible. We know this news is abrupt and may cause disruption, so we're committed to helping bench customers navigate through the transition from the entire team. At bench, it has been an absolute privilege to serve small businesses for the last 13 years. Thank you for being part of our journey. The bench team. And then there's a timeline of what will happen next. They're saying that by December 30th, customers will receive further information about how to access their bench data. They are recommending kick a modern accounting software to, I guess, continue doing your bookkeeping to get support. I don't know what kick is. And then there's some frequently asked questions. Do you have any information about kick David? David Leary: Yeah. So kick is an accounting software that does the work for you. So it's a new startup that recently took money as well. Um, they're using an AI. It looks like bank feed accounting at the end of the day. It's a it's a small it's it's startup bookkeeping, if you want to call it that. Um, they have about a thousand customers, but the fact that they're offering a discount for bench and these ducks are in order, and they basically have a landing page for the bench people to come over, tells me this wasn't something bench decided this morning to shut down. Obviously there's been chatter or talk about this with the kick people to refer them over here. I kicked prices are pretty low compared to what bench was. I had to go to bench. Um, on the Wayback machine to go find the old bench website. And bench prices were up there a little bit. Where were they at? Let's. It was 299 a month and or 599 a month, depending on if you wanted bookkeeper or bookkeeping in tax. So it wasn't like they weren't doing it for 50 bucks a month, like a lot of these startups were trying to do. They were charging a arguably a normal monthly cash fee, 300 bucks a month. Blake Oliver: Bench was a bookkeeping firm, an accounting firm. They even did taxes, right. Luke says. Bench was in Techstars and the messaging was to, quote, automate bookkeeping, unquote. They pivoted and ended up just going to a cheap way to deliver labor arbitrage. In Canada, salaries are lower exchange rate benefits the US. And Rafi says, who would have thought charging only 100 to $300 a month for bookkeeping is not profitable? Well, Rafi, I do think it can be. And there are companies that do this at scale. They have thousands of clients. Uh, bookkeeping Express BC would be an example of that. They're doing well. They're profitable. Right. Keith Mueller, I believe. Keith Mueller when he says that CEO there. Um, I think my guess is that if I have to speculate on this, David, I'd love to hear your thoughts. Is that bench over leveraged or they they in startup land they spent too much on customer acquisition and they couldn't make the economics work. And usually the reason it doesn't work is because your costs are high, you have high cost of goods. And this is what happens when you're running a service organization and you have high churn. You have high churn, both on the cog side of things, the bookkeepers that you were hiring. And then you have high churn on the customer side. And if you're spending a lot of money on digital ads and partnerships to acquire customers. You're paying a lot of money to advertise, to acquire customers, to grow quickly. The and the churn is high. You just cannot get that lifetime value above what you're spending to get those customers and you run out of money. David Leary: My understanding is there's a lot of churn. You talk to other accountants, they get people from bench. They're constantly having to get new customers to keep the model going. And Luke could confirm for us in the chat, it'd be great if there's if that's actually true. Now what's amazing about this is bench. They raised over $100 million to to build this as a business. And the early days of basically the business the theory would was they had bookkeepers here in one room and the room next door engineers. So over time the bookkeeper has to do something. The engineers watch, figure out how to possibly automate it. That was the bet. That's the concept. You're going to automate the processes and the bookkeeping and make it super efficient. I mean, we've seen this story over and over again, but so as of in 2021, when they were about nine years old, they raised $60 million in their series C, and what I'm thinking is why? How did it take 13 years for this model not to work? Right? Were there any they kept raising money. They kept? Yes. Kept raising money. But you know, when you start doing series C and you start doing the rounds after that, that means you're on the march to become a real company and to go public, possibly. Right. Have an IPO. Well, where's the due diligence of is this a business? That model should have been vetted out earlier is my point of view. Blake Oliver: Well, there's a misunderstanding about automated bookkeeping in the tech world. In the VC world is it's sort of like, um, I don't know, it's like Uber in a sense, in that what you're betting on is, is if you invest in Uber, you're betting on Uber, figuring out how to get rid of the drivers. Yeah. And bench didn't figure out how to get rid of the human bookkeepers or to leverage them quickly enough so their costs are simply too high to support SaaS, a SaaS business model. David Leary: Because I'm paying bookkeepers and I'm paying engineers, which is the worst model. I'm paying double the cost. Blake Oliver: Exactly the R&D. Right. So if you're a software company, your cost of goods is hopefully like ten, no more than 20%. And so you have really high margins or you have a really high gross margin, and then you can invest in R&D and you can take money from investors to then invest more in R&D. But bench also had this really high cost structure. Even being in Canada, you know, they would have been way better off doing this offshore in terms of cost structure than in Vancouver. I mean, sure, I guess Canada is a little cheaper, but like Vancouver is a very expensive place. So I have a hard time imagining that with like with an office in Vancouver, with people coming in, they could make this work. Um. You know, somebody commented here in the chat about like, their firm not being able to do it. Yeah. Sean said the firm I'm moving to working on at the moment doesn't even think about you before $500 a month. And my experience at a mid-size firm in LA was that we couldn't serve a client for less than $1,000 a month. It was really hard to make the economics work. So unless you're doing it somehow with like, offshore labor, that complements the automation that you're building, you know, this is just not going to work from a cost standpoint. So it's it's kind of sad because, I mean, it is sad. And I feel sorry for the folks at bench who are surprised by this, the people who are going to lose their jobs, they have over, uh, sounds like 650 employees and they serve over 10,000 business owners. I'm seeing numbers like anywhere from 10 to 30,000. And that's a lot of people now who are just, like, Busy season is coming. Tax season is coming and they may not have their books closed. They may not have their data. Who knows. David Leary: And they were helpful for customers that were using them successfully. I saw a quote about their partnership with FreshBooks. So when FreshBooks would get somebody to sign up for bench, they would not turn off a FreshBooks. They would stay on FreshBooks 80% more successful essentially by having an accountant helping them at bench. So they. And I'm not seeing nightmare stories like we've seen with some of these other startups that have folded, these bookkeeping plays that have folded on Twitter where, oh, they didn't. I found out they didn't file my tax returns for three years. I'm not seeing those types of nightmare stories online other than people. Hey, I just signed up. You know, this week I paid for a year of service and now they're shutting down. Now, what are some posts like that on social? But I'm not seeing a lot of accusations of complete incompetence happening at bench, which we've seen in the other previous scale factor. We saw that we saw that with some of these previous startups. Visor Tax. Blake Oliver: David, let's take a break and thank our sponsors and read our first sponsor message. Yeah. David Leary: So our sponsor is Live Flow Sharelink cloud Accountant Staffing and Tax Bandits. So we'll do the first ad for Live Flow here. Are you a QuickBooks fan or do you prefer Xero. Well, I've got some exciting news for you. Live flow now syncs QuickBooks and Xero to Google Sheets and Excel. You might already know that Live Flow has been a game changer for thousands of accountants and their clients. Automating automating financial reporting from QuickBooks Online to Google Sheets. But if you were an Excel user or on Xero, you were kind of left out until now. Here's something that'll blow your mind. You can create consolidated reports for clients who have one entity on QuickBooks online and another on Xero Live. Flow can speak to both at the same time, and your reports and custom dashboards automatically sync in real time. Also, there's even more Live flow news. Live flow now has dashboards built in. So instead of you having to create charts and graphs from scratch in Google Sheets or Excel, Live Flow gives you the ability to create beautiful, customizable dashboards for your clients. You can even give the client a PDF of the data or the dashboard as a PDF. It's that's your client's thing. If you're ready to take your financial reporting to the next level and to get 25% off your first three months, head over to The Accounting Podcast dot promo slash Live Flow. That's The Accounting Podcast dot promo forward slash l I v e f l o w. Thank you. Live flow. Blake Oliver: Thank you. So, did you see the news about Rafael Alvarez? We covered this on the show before. David Leary: He's with the tax magician. Is that who that is? Blake Oliver: Yes. The tax preparer known as the magician. Pled guilty to orchestrating a massive tax fraud scheme that defrauded the IRS of $145 million. Operating from his Bronx based company a attacks. Alvarez was nicknamed the Magician by clients for seemingly making their tax liabilities vanish. This is one of the largest cases of individual tax fraud in U.S. history. Over several decades. Go ahead. David Leary: You said you've met him before at a conference. Blake Oliver: Yeah, he was working with zero. I think zero partnered with attacks to offer zero to all of their customers. And so Raphael was at the conferences speaking, and, uh, he's like, extremely charming guy. Like, it's strange to have met a fraudster of this magnitude. And I can totally see how his charisma enabled him to do this for so long. But it wasn't sophisticated. Over several decades, he filed thousands of tax returns with falsified information, including fake deductions, business expenses, capital losses and tax credits, and he secured inflated refunds for his clients. He recruited employees without legal status, intimidating them into participating in the scheme. Some were instructed to impersonate licensed tax preparers using their identification numbers, and when confronted by employees about these fraudulent activities, Alvarez would threaten them and implement policies preventing corrections. So he pled guilty to one count of conspiracy to defraud and steal government funds, and one count of assisting in the preparation of a false tax return. He's going to pay that $145 million in restitution to the IRS. He agreed to do it. Who knows if he has the money, and he's going to also forfeit close to $12 million in fraudulent proceeds. So he facilitated $145 million in IRS losses, fraud. And he himself made $12 million. He is facing up to eight years in prison and is scheduled for sentencing on April 11th. David Leary: And if I remember before we spoke about attacks in the past, individual franchises were being accused of helping to do questionable returns. Is it sounds like this is a rolled up? Uh, it's not a conspiracy, but, um, when there's multiple people involved. Blake Oliver: Uh, I mean that. Yeah. David Leary: I know the word. That's not a conspiracy. Trump on. They tried to get Trump on that. The and they get the mob on that. The um what is the C word I'm looking for. Do you have, uh. Blake Oliver: It's conspiracy. David Leary: It's conspiracy. But the it's not the legal word they use. Um. My goodness. How do they get the mob? They get the mob on that. It's not racketeering, either. Um. Blake Oliver: Not racketeering. That's a good one. Collusion. David Leary: Collusion. Blake Oliver: That's the. Thank you. Rafi. Rafi says collusion. So it was a franchise, but it wasn't the franchisees that got hit with this. It was Rafael Alvarez and his locations. Him. So I feel sorry for the franchisees, because now they've got this brand name that's tainted by massive fraud. Wow. All right. David, shall we move on, or are you going to. Are you are you like. It looks like it looks like you're like, deep into googling what collusion is. David Leary: Yeah. The Rico, they get them on those Rico charges. Are you sure. Blake Oliver: You're not on drugs for your back, are you? Are you okay? David Leary: I'm good today. I'm good today because. Blake Oliver: I don't I don't get to have any pain medication for my hand until, uh, until I get surgery. David Leary: I'm only on Tylenol, which is not a fun drug. No. Blake Oliver: I feel like Tylenol doesn't do anything. I don't know, like I said, it does anything either. David Leary: Advil. So much better. Tylenol is useless, but you. Blake Oliver: Can't take Advil before a surgery. Thins your blood out. Uh. All right. David Leary: Related note we could pivot over to some other raises. So obviously we just talked about bench going away. They're pushing people to that new company Kik, which is an AI accounting automated startup. There's two other huge raises in our space. So a win if that's how it's pronounced I win. They raised $113 million to build a client portal essentially. And then how much money? $113 million. Wow. So the nice thing is like about this is at least with a win, I can tell what they do. On the other hand, there's another company that had a raise basis, so basis had a raise. They raised $34 million to create AI agents. And it's not really clear what they do. But let's just talk about a win first. So a win I think. Blake Oliver: It's I win. David Leary: I win like my firm wins I don't know I win. Blake Oliver: I win. Yeah it's a it's a I win. David Leary: Yeah. Blake Oliver: Is there, is there like how to pronounce it in the about page. David Leary: I didn't see that. Blake Oliver: Go for it. All right. Are you asking. Forget it. Forget it. Just keep going. David Leary: Okay. So they raised $113 million in funding from KKR and Bessemer Venture Partners to enhance its accounting technology platform. It will support their goal of evolving its payments and collection suite to a comprehensive practice management platform incorporating artificial intelligence and cloud technologies. So as of right now, the product automates manual payments, collections and invoices from clients. So essentially, you know, you send your engagement letter, it gets accepted, provide your credit card, they collect the payment, and they're automating that part of your firm. And they've gotten into 130 of the top 500, uh, CPA firms with this software. It's really just revenue management. Life cycle is essentially what they're in, but what they're. Blake Oliver: Going to do large accounting firms, large. David Leary: Accounting firms. But now they want to create a universal client experience portal. So they're going to build a client portal with this money. And they also want to launch an advanced tax solution. So now that they have their in with firms they're discovering these problems firms are having which we've talked about is clients don't like the portals. Now they're going to go spend all this money on a new on a portal, which I don't know if that's the best use of the money. We'll see how how that comes out, but I just feels like a huge amount of money for a company that the problem's already been solved over and over again. This engagement letter contract, you know, practice ignition, solves it. I think it's built into canopy now. Right. Blake Oliver: But those are all solutions for small firms. I win is focusing it looks like on larger firms. And what does that mean. That probably means integrating into their practice management software their time and billing solution which does not connect via APIs to anything. There's a lot of value in that, right? Allowing firms to I mean, in my firm and when I worked at the large firm, we. We couldn't send an electronic invoice. We had to print them and mail them. That's how old our software was. But we couldn't move off of the software. Because that's what everyone in the firm used for time and billing. David Leary: So I could see that they're they're working with big firms, they're rolling out their software, and now they're trying to connect it to all these other crappy software packages that are in the firms. And they're like, why don't we just build better versions of this software they're using? And that's the march they're on. So I get that and I could see that makes sense. It's a monster amount of money though. Blake Oliver: Um, and should we read our second ad, David? David Leary: Yeah. Are you ready? Second ad is for sure. A link will bring up the link here. Blake Oliver: Would you like me to read this one, David? David Leary: If you want to. That's fine. Blake Oliver: Thank you. Sure. Link for sponsoring this episode. 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Whether it's a massive QuickBooks backup or an obscure compressed file, Sharelink handles any file size or type. No limitations, no headaches. Here's what's really impressive firms using Sharelink report cutting their document gathering time by up to 50%. That's time you can spend actually serving your clients. So if you're ready to simplify your document management and focus on what you do best providing top notch accounting services, head over to The Accounting Podcast promotion link. That is The Accounting Podcast dot promo forward slash s u r a l I n k. David Leary: And we recently did an earmark expo with sure link, so go check that out. Get in the earmark app. You can find the the Expo for sure link or on the earmark YouTube channel. You can go to the expos and see the demo. They're super clean app. Very impressed with the demo that we experienced. Blake Oliver: The press continues to dig into Billy Long, IRS commissioner nominee, and ProPublica dug into a credential that Billy Long puts after his name. Billy Long is a certified tax and business advisor. Ctba. Have you ever heard of that, David? David Leary: I've never heard of that. Blake Oliver: I have never heard of it either. Apparently, the Ctba designation is offered by a company called Excel Empire, a small firm requiring only a three day seminar attendance. I thought it would be interesting to go take a look at at this credential, David. I mean, maybe maybe I should consider getting it, I don't know. Let's let's take a look here. Matthew Pearson Clip: Matthew Pearson with Excel Empire. I'm excited to introduce you to the Certified Tax and Business Advisor course offered exclusively through Excel Empire. Yes. We can help you differentiate yourself from the over 1 million other United States insurance agents. Blake Oliver: That's weird. He says insurance agents, right? Like, I thought that was strange. Matthew Pearson Clip: Your time to look at what the course has to offer. Realize how you can go and help business owners, investors, those that are selling their businesses for highly appreciated assets, reduce their taxes so that you can come alongside them and help them reach their goals of financial freedom. We look forward to seeing you at our next Certified Tax and Business Advisor course. Blake Oliver: And that's it. The video just cuts off on the homepage. So we're looking at the homepage of Excel Empire. Com the next live and in-person certification is February 23rd to 26th in Southlake, Texas. You can become a certified tax and business advisor like IRS Commissioner nominee Billy Long, and. David Leary: You get a little badge to put on your website. Blake Oliver: I don't know what you get, but it costs you $4,997. Oh, registration is closed, it looks like, but it says registration closes in 18 days. There's a little countdown here on the website, but then it also says registration is closed. It says, interestingly, it says who? This is for insurance agents, financial advisors and real estate agents. David Leary: And what are they teaching in this like tricks to, you know, like the magician would use to hide some taxable income for your clients. Blake Oliver: I don't know. Like what? I'm really curious. Like, it doesn't really. It just says, okay, uh, we're going to learn. We're going to differentiate ourselves from the competition, and then we're going to learn tax planning, exit strategy and asset protection. Maybe, maybe we'll learn how to file for the irtc. I'm not sure. Um. David Leary: So it's a questionable certification at best. Blake Oliver: Yeah. I mean, not very many people have it. It's definitely like, uh, just a few, but it's funny. Like, anybody can create any certification they want, right? So, um. You know, think about this. Like you spend all this time, years and energy to get a CPA. That means something, right? And then here comes Excel empire and just creates a certification. Certified tax and business advisor. Boring accountant says I will certify Blake and David in professional accounting podcasting after this episode wraps for the low cost of $777. Hurry, hurry. Act now. Eight of ten slots are filled and going. Quick link in the bio. Thank you. Boring accountant. Uh, you know what's funny is like, here we are, the Friday after Christmas before New Year's. And I think this is like the largest live stream audience we've had. I mean, people really don't have anything better to do. All right. Accountants. I'm just. I'm. This is this is amazing. Thank you. And, of course, David and I are, like, totally out of it. Like, this is probably our worst episode we've ever done. I can it feels that way anyway. I don't feel like I'm on top of things. David Leary: So there's kind of other news about Billy Long. We got, uh, a reporter after episode last week reached out from the Washington Post asking for a link to that podcast episode that we talked about in linked in our show notes, because there's some scrubbing going on. They've pulled this down. So the podcast where we played the clip from of Billy Long pumping the Irtc and saying, accountants aren't on top of the laws and the code. That whole episode is now on, no longer to be found on the internet. I had searched temporary folders on my hard drive, cannot find the internet, or can't find the file anywhere of that podcast. So there's some scrubbing going on of his peddling IRC and that's out there. So if you have any videos of him or podcast episodes, save those off to your hard drive. Don't delete them, because I would love to get Ahold of the actual original audio files if you have that by any chance. Blake Oliver: Uh, media has also been digging into Lifetime Advisors, one of the consulting firms that was doing the irtc that Billy Long was affiliated with as a salesperson. And, um, I guess it was. Yeah. New York Times dug into this And the way it worked is Billy Long would refer clients to lifetime, and they would prepare the irtc applications in exchange for a percentage of the tax credit. So like an example would be 20% of the $300,000 credit, and then long would get a piece of that. Um, lifetime advisors helped clients obtain $1.3 billion in tax refunds. David Leary: So you got a you got a nice chunk then. Blake Oliver: Yeah, right. If he was getting I don't know how much he was getting. Right. But if lifetime was getting 20%, what are they kicking over to Billy Long now this is interesting. Two of lifetime's leaders, John Lucas and Jeffrey Mohlman. They were previously barred from working as securities brokers. We don't know. I don't know why, but they were barred from working as securities brokers and apparently multiple CPAs hired by lifetime left after raising concerns about the firm's tax preparation practices. And there's one story in particular about a nonprofit that received $300,000 but returned it after auditors questioned the claim, stating. And the auditor said that lifetime's interpretation of Irtc eligibility, quote, borders on absurdity, unquote. David Leary: I think that was the claim on the Better Business Bureau that I found when I was doing the research. Blake Oliver: Mhm. So definitely like sketchy. Very sketchy situation. David, we should probably thank another sponsor. Right. We got quite a few sponsors in this episode. David Leary: I'm changing tabs now. Blake Oliver: This is Cloud Accountant Staffing I believe I got the banner up there. You want to read the ad? David Leary: Yeah. 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That is The Accounting Podcast dot promo forward slash CAS. Thank you. Cloud accountant staffing. Blake Oliver: Ceo of KPMG, Paul Knopp wrote an op ed in The Wall Street Journal that was published earlier this month, December 10th, and the headline is The Dying Language of Accounting. I saw this and I thought, oh, man, they're finally they're finally paying attention to this, this, this issue that I've been talking about, that accounting is outdated, that it's based in a world of tangible assets and that, you know, we need to modernize accounting to consider intangibles, right. We're too cost based and all that stuff. Unfortunately, that is that is not what the article is about. It's good though. Um, but it's not about the actual language of accounting. It's Paul Knopp saying, hey, you know, we've got a decline in CPA candidates and accounting degrees. He mentions the stats. We always talk about that. The number of CPA exam takers in 2022 reached a 17 year low. Bachelor's degrees in accounting have decreased, uh, over, you know, 2020 to 2022 by like almost 8%, continuing a downward trend since 2018. He mentions the material weaknesses that were reported by over nearly 600 US listed companies and its related to personnel not having enough accountants, and that municipalities are risking credit rating downgrades due to delayed financial disclosures. Blake Oliver: And what he calls for to solve this is actually reforming the CPA licensure process. What we've been talking about, eliminating the 150 hour rule or creating alternative pathways, focusing on experience rather than extra academic credits. Um, he does say that salaries are increasing because of this labor shortage and that starting salaries at KPMG have outpaced inflation. Uh, and, you know, says the typical thing, which is we need to reposition accounting as not being boring. That's actually an exciting career, which of course accounting sexy. We know it can be. It can be. Um, and the CPA opens a variety of doors to a variety of careers. So, I mean, I think it's really great that we've got the CEO of a big four firm advocating for change to the 150 hour rule. The alternative? It seems like this is where we are headed. We are going there. It is going to be happening. But like I feel like he missed the opportunity there to go bigger. And he didn't really address the the major issue that is actually causing accountants to not want to be accountants or students to not want to major in accounting. Right. Which David is. Do you remember. David Leary: The working conditions? Blake Oliver: That's right. And in a follow up, Wall Street Journal posted letters from CPAs. I guess this this opinion piece by Paul Knopp stimulated a lot of letter writing, and I've kind of summarized those. And the number one issue that the writers, the actual CPAs who wrote in cite is the long hours and insufficient pay, the grueling hours required, coupled with compensation that does not feel commensurate with the workload. Several described accounting firms as sweatshops, mentioning that while juniors put in investment banking hours, they don't get investment banking pay. And that's the the number one way that we could increase the accounting pipeline is, is pay people for the hours that they're working. Right. Um, also, the letter writers mention the excessive regulation, the ever increasing complexity of accounting rules, especially around financial reporting. Examples include lease accounting, changing tax laws constantly. And it means that we're focusing on compliance rather than creating strategic or managerial insight. And that discourages people. People don't want to just be doing compliance with their careers. Um, and I feel like that is is a big one It's like the declining relevance of accounting standards. We have an economy that has changed from being rooted in tangible assets to one that is now like, if you look at the S&P 500 market value, it's almost entirely intangible assets. It's brand value, it's intellectual property. And this is not on the balance sheet. Right. It's very difficult to value these things. Um, so the the 150 hour rule is listed as the third most popular item in the letter writers. The one that Paul highlighted. And then last is the public image. You know, the reputation of the profession is boring or dull. And I've always felt like, well, you know, I say this, David, that it doesn't matter what you do from an image standpoint, if the job itself is not satisfying, right? If you make the job satisfying, then the image will take care of itself. Yeah, because you. David Leary: Can make it as sexy as possible and fill the top of the funnel with millions of accounting students, but as soon as they discover the job is not fulfilling, they're not going to stay. Exactly. It doesn't matter how sexy we make it. If the fundamentally, the day to day of the job is not fun to do. Blake Oliver: You can't fix the product problem with marketing. So I think we're making progress. Not as fast as I would love as I would like. Right. We're now we're now as a profession. We are now over the 150 hour rule and we're going to find a solution. But what is that solution? We still can't seem to agree. Um, Cal CPA, like we talked about in previous episodes, they came out against the AICPA and Naspa's plan to create an overly complicated CPA licensure process. Um, and I and the center for Audit Quality has also now come out against that. So we need but we need something we need we need an alternative. We need a simplified alternative. And I hope that California will work on that. David Leary: David was reviewing or I was reviewing our stories for 2024, looking at our episodes, you know, just going back in time and reminiscing, if you want to call it that. So in 2024, we had just under 300,000 downloads, 297,422 across all our podcast episodes. We published 51 regular episodes in 2024. This will be episode 52 and 21 bonus episodes we released during the year. And if you step back and think about it more like a narrative or a story, we started out the year talking about 150 hour rule, and now we're just still finishing up the year talking about 150 hour rule. But in the beginning of the year, we're really talking about the winds of change have started. Do you remember you brought to the show the paper Arizona CPA society, and they had a survey that said 80% of the Arizona CPAs supported 150 hour rule alternatives. Do you remember that? Yeah. And that was the start of the the wave of change for 150. That kind of kept rolling from the rest of the year that we had, um, you know, for a lot of the episodes in the beginning of the year, there was about the labor shortage and emergence of AI. David Leary: That was the first few months. But then the late, early, late spring, early summer, we started focusing on the PCAOB fines and audit quality. Do you remember list typo in their financial statements? Right. We had these the audit quality. And then in March that was the start of the boy drama because the Corporate Transparency Act was ruled unconstitutional. But when we really started focusing on the bad audits in April. So episode 379, we titled the episode get Rich Doing Bad Audits, mind you. Four episodes later, the SEC charged Trump's audit firm with a massive fraud. And that was in May. So like, we were on top of the news pretty tight that we we saw these audit failures coming and they kept getting worse as the year went on and the fines that were hitting firms. But a lot of it was bad quality audits were just out there. And that's really now in that letter that he wrote. Did he address that or was that in any of the the op ed piece? Blake Oliver: Nope. Yeah. David Leary: No, nothing. Blake Oliver: None of these like, root issues. Right. These 150 is important, but it's not the root issue. Like, people would be happy to do the extra education if the reward justified it, but we haven't had salaries go up. They've just plateaued. David Leary: Arguably they've they've gone down with inflation. Blake Oliver: Potentially depending on where you live. Right. With inflation yeah it may have gone down. David Leary: And obviously we spoke with Trump a lot. And on a lot of the episodes, starting with the bookkeeping trial for the hush money. We talked about that was a big story. The election in general was huge. And then wrapping up the year with Doge wanting to build their own IRS filing app, and members of Congress asking Trump to kill IRS direct file. So these are these are kind of the main themes. It was, uh, audit quality, one 50 hour rule is changing. And then Trump was a huge impact on the news for us this year. There's a lot of the episodes, um, trying to think of other memories. I think we, uh. The the bank crash FTX was in 2023, right. And so was Silicon Valley Bank. I think they were the end of 2023. They didn't happen in 2024. But those were those would have been stories that. Blake Oliver: We talked about them in 2024. David Leary: We talked about it. Yeah. But mostly it was audit quality. I think audit quality really drove a lot of the discussion this year. And it's also tied to the labor shortage. Right. A lot of this and the working conditions. Blake Oliver: So getting back to pay I have a story here that I've been saving for a little while from cfo.com about how much money Americans feel they need to make to consider themselves a financial success. The average American believes that a salary of $270,000 denotes success. But there is a big range among generations. Baby boomers think you only need to make $100,000 in yearly income, and have a net worth of $1 million to be a success. So only $100,000 a year. Now, if you take that and you apply that to the CPA profession, to the accounting profession, CPAs make, depending on where they live, you know, six figures, low six figures is on average what a CPA makes. So according to the baby boomer generation, CPAs should be happy. They should be successful. Right. And that's kind of what you hear from the, you know, retiring partners who don't understand why people don't want to be accountants anymore. We're not as many wannabe is. David Leary: About about how much you need to make to be successful. It's not. What do you need to make to just make ends meet? This is a different. Blake Oliver: Successful to consider yourself a success. Yes. Now. So so boomers believe that it's $100,000. Gen Z says you have to make $588,000 a year and have a net worth of $9 million to be successful. So like think about that range. They need five times- David Leary: -wildly successful. If I was at those numbers. Blake Oliver: Right. I mean, that's pretty great. Um, and then, you know, millennials are somewhere in between along with Gen X. Yeah. Uh. While high salaries are desired, most Americans prioritize other measures of success. According to this survey, happiness cited by 59% as the top indicator. It's kind of crazy to me that only 59% of Americans think that happiness is the top indicator of success. So like, I guess you can be successful but not be happy. I don't even see how that's possible. I mean, I guess, I guess, I guess we see a lot of that on, like in, like TV shows, right? You watch shows like succession. These are very successful people who are not happy. But I wouldn't want that I don't I, you know, I, you could hand me $1 billion. And if you say you're going to here's $1 billion, but you're never going to be happy. I don't- I wouldn't take the money- Speaker5: What's the point of taking it at that rate? Blake Oliver: Right, what's the point of taking the money? Um, free time for personal passions. That's valued by 35% as their top physical well-being. 35%? Um, only 27% consider wealth as the highest measure of success. But again, that's still, like, disturbing to me that you would consider wealth the most important measure of success above happiness and physical well-being. In time for personal passions. I don't get it. But hey, if you're in the If you're in the live stream here and you disagree with me, I want to know why you think like, I guess if you're going for the partner track, right at a traditional accounting firm where you're going to work 60 hours a week for your whole career, then you might that you might be one of those people who values the the financial aspect more. Uh, hard work, though, is still viewed as the most critical factor of obtaining success. 84% of Americans believe that hard work leads to success. I think that's a good thing. That's very much like an American attitude. And it's true. In my experience, you work hard. Generally, you'll be successful. Uh, talent, 65% say that's important. Networking considered by 55%. But, you know, a sad thing about this is that only 47% believe they will achieve their desired levels of success. Yeah. Um, and it actually goes down as you get older, maybe because you have less time to get there. But 71% of Gen Z's are confident, and 70% of millennials believe that they will be able to achieve their desired level of success. But it's closer to 50% for Gen X and baby boomers, so- David Leary: But life's easy. When you're young, it's easy. It's just it's all upside. Blake Oliver: So, you know, let's put this in context, right. Like the average American thinks you need $270,000 a year in income to be considered a success. We're pretty far off from that in the accounting profession. Right? With like, I guess, two accountants, two CPAs together earning an average CPA salary could get there, but you're not going to do it on one. And that's a big challenge because well, then, you know, raising a family is very difficult. And that's a lot of people have that goal, right. You want to have a family. Hard to have two working professionals working lots of hours just piecing together the income to be considered successful. What's next David? Should we talk about intangible assets? David Leary: Did you see Walmart was accused of illegally forcing a million of his drivers to open bank accounts? Blake Oliver: No. David Leary: So? So Walmart has. Just like with Amazon Prime, you have people that just deliver goods for you. Right. These drivers, they just show up in their car, kind of like they're almost like gig workers or an Uber driver that in between Uber trips, they're delivering a package for Walmart or for Amazon. You know, they're they're they're gig workers. Well, they the Consumer Financial Protection Bureau is suing Walmart because they forced these delivery drivers to open a bank account, um, in their in order to get paid. In order to get paid, they had to open a bank account through a bank that they called branch, a branch messenger. So it was a technology company that had the built in bank account. And this this bank would take out fees. So they were extracting low balance fees and just pulling money out. And it basically added up to $10 million in junk fees through this Walmart spark driving program. So they you can basically get the app, you know, sign up to be a delivery driver for Walmart. They force you to get the bank account, and then they put the money in there, and then they slowly extract the money back out of the account. It's like, yeah, at least we're not doing that to accountants that come into firms. We force them to get a bank account at the firm, and then you feed them to death on this. Um. I'm surprised like, this can't be legal. Or maybe it is legal, but it seems crazy. Blake Oliver: Making your contractor sign up for a bank account to get paid by you. David Leary: Yes. Blake Oliver: Yeah. I don't know. I guess it would be state by state, right? Probably the state set these rules, But it doesn't seem very like friendly to them to make them do that. David Leary: And I feel like, if I remember correctly, Uber did something like this similar. So when you signed up, be an Uber driver, they would instantly spin you up a square account and you're getting paid through that. So I understand the convenience factor of this, but it's questionable at best. Definitely not ethical. Blake Oliver: Let's thank our last sponsor of this episode, Tax Bandits. If you're feeling the pressure juggling 1099 W-2s and ACH 1095 forms, listen up. Tax bandits is the solution you've been waiting for. They've got over a decade of experience and support 100 plus tax forms, including everything from your 94 X series to those tricky state filings. Tax bandits handles both federal and state e-filing seamlessly, so you're set no matter how many states your clients are operating in. Tax bandits is IRS certified, meaning they offer instant processing of your forms and provide real time status updates, ensuring accuracy and eliminating the risk of being notices for additional peace of mind. Tax bandits also offers tin matching and USPS validations to ensure your filings are precise and your IRS requirement is met. Plus, delivering recipient copies is a breeze. Go with traditional postal mail or give clients online access with their forms. It's all about flexibility. As an accounting professional, you'll love Tax Bandits Pro features like a secure client portal, team management tools, and full branding customization. Everything you need to streamline your workflow and provide top tier service. And when it's late, you're tired and you need a helping hand. Tax bandits support team is actually there via phone, email or live chat whenever you need them. If you are ready to take control of tax season and join thousands of tax professionals who trust tax bandits, head over to The Accounting Podcast promo Tax Bandits that is The Accounting Podcast dot promo forward slash tax A n d I t s. David Leary: And if boy is back on again, you, uh. They offer a tools to help you do that. Boy. Reporting for your clients as well. So you can check out tax bandits. If tomorrow we wake up and you have to do the boy reporting again. Blake Oliver: We got a comment here from the rogue independent. Uh, hey, I'm a little late to the stream, but I'd like to get your opinion on OpenAI developing AGI. Do you think it'll affect the accounting profession within the next two years? Well, great question. Rogue. Um, the limiting factor in AGI, according to Elon Musk, is power cost, electricity, which equals cost. Uh, it's very expensive to run a model that can think constantly like a human being. You're running prompts Many, many prompts per second. The human brain is like doing this. Like we don't. I don't even know if there's like a way to calculate how many times we are running our own prompts in our brains. But it's a lot. It's like, think about hundreds of times a second. And if you're using a giant LLM like what OpenAI has developed, it's incredibly inefficient. And so it's very expensive. So what I'm trying to say is that it's the cost that is a big limiting factor in this. Um, so maybe in OpenAI they'll have access to this AGI that can think like a human. But it seems unlikely to me that we will have access to it for accounting applications anytime soon. But I do think that AI is going to start impacting us in the sense that we are going to get, um, like chatbots that work like in Microsoft Teams or in slack. Helping us in a lot of ways, this is going to be like having an offshore team that you talk to, mainly via chat that handles tasks for you. It's just the work that is being offshored now is going to be pieced out to perhaps AI instead. And there's a lot of like low hanging fruit, accounts payable processing, payroll processing, uh, you know, manual journal entries that need to happen for specific stuff. Reconciliations. I really picture yourself instead of managing like a team of ten people as a manager in a large firm, now you've got a team of people and AI bots that are doing the work. That's where I see this going in the near term. David Leary: That's how Basis, who just raised $34 million- that's how they described their product. The product, which functions like a junior accountant, allows staff accountants to spend time reviewing the AI agents work rather than doing the work manually. Right. So so you're right. It's like it's like managing a team or another body, but instead it's going to be an AI agent. You're going to manage and supervise the work of. Blake Oliver: Yeah. It's like if you, um, if you write content, if you create content as an incredible tool, you're probably already using it. You know, I don't I don't write anything from scratch anymore. I will talk through what I want to do in voice mode with ChatGPT or, um, in a transcript that I'll then use to create whatever it is I want to create. And it just speeds up the whole process much faster. It's like having a staff writer always available on the team, and you might say, okay, well, what does that have to do with accounting? Well, let's say you've got this journal entry that you have to do every week or every day, and you have like an input spreadsheet. You've got like this report that you get that you have to turn it into the journal entry. Well, you can pretty easily train a project in Claude or in ChatGPT. Now give it examples of work you've done, tell it what you want to do and the instruction set. And every time you then feed it that report, it'll generate the journal entry. So that's the kind of work that is getting automated that would have been incredibly difficult to program. Probably not worth it for your company to do that in the past, but now you can basically create that. It's a program, right? It it does a specific function. And I've tried this I've done this with like journal entries. Blake Oliver: I'll take a payroll report from Onpay. And I'll give it an example of the journal entry that I did. And it'll take the new numbers and plug it in. And it's very reliable. The key is you got to give it examples. So Shawn says always need somebody to run the I who knows what to do. So it'll automate certain things. But you still need someone who knows what to tell it to do. Yeah. And review the work. It's just like when we had the cloud revolution in accounting. It didn't reduce the need for bookkeepers entirely. Sure, it cut the need by, like, cut the hours by, like 80%, but you still needed people who could do the rest oversee the work, and those people now make a lot more money operating as outsourced controllers, accountants. It's a great career. It's what I would be doing if I wasn't podcasting. I'd have like five clients doing outsourced controllership for, uh, you know, helping them run their payroll, pay their bills, do their books, you know, do the accruals that would be, you know, fun. I like that kind of work. And, you know, I can automate so much of it with AI now. I mean, that's what Dave and I are doing with the books for our earmark businesses, right? We don't have to outsource it because we just do it all with tech, with tech,but I stay in the weeds. Like we should outsource it. Blake Oliver: Eventually. David Leary: It's really not an efficient use. The only reason we do it is to stay in touch with the apps so we can speak intelligently on the podcast. Outside of that, do not recommend doing your own books. You should outsource it to one of our listeners for sure. Blake Oliver: I got one final story to take us out. This is about San Francisco. The city of San Francisco. Back in the news. Overcharging companies for taxes. Remember, we were talking about GM suing the city of San Francisco because San Francisco tried to claim, like, share of GM's total, like global revenues, because GM's. David Leary: Gm had a self-driving car division that they bought cruise. That's right. Blake Oliver: Apparently San Francisco is doing the same thing to Lyft. Lyft Inc. has filed a lawsuit against the city of San Francisco, alleging that the city overcharged the company by $100 million in taxes between 2019 and 2023. San Francisco calculated taxes based on the total payments riders made for Lyft rides. Lyft says that's wrong because it only recognizes revenue from fees paid by drivers to Lyft, not the full amount paid by riders. Lyft considers its drivers as independent contractors and views them as customers of the platform, not employees. The company argues that driver earnings should not be counted as Lyft's revenue for tax purposes. Lyft takes the fee paid by the rider, passes it along to the driver and deducts its share of the fee. So Lyft's share is considered revenue in their accounting, and that part that's paid to the driver is not. That's just pass through from the rider. David Leary: But usually sales tax is usually calculated on the total receipts. Right. You don't you don't subtract out your expenses. Or if I'm a restaurant and I'm buying tomatoes, I don't get to deduct that first before I pay my sales tax. It's off the top [CROSSTALK] Blake Oliver: -the retail price, right? [CROSSTALK] But that's also like sales tax if you think about it, is sort of similar. It's a pass through, right. It's paid by the customer, collected by the business, and remitted by the business to the tax authority. It's not revenue to the business. David Leary: Exactly. Blake Oliver: So Lyft, to support its argument- Lyft is saying, hey, the SEC doesn't consider driver compensation part of our revenue, nor is it recognized as gross income for federal and state income taxes. So apparently only the city of San Francisco is trying to do this. Uh, they have not commented. The city has not commented on the lawsuit. Um, and I guess we'll see what happens here. But, you know, San Francisco is really stretching to bolster their tax revenues, it seems, on this one. David Leary: -looks like it's having a similar battle with the state of Georgia. Um, basically, the state of Georgia is claiming that Uber, uh. Failed to collect about $9 million from drivers. Uber should have been. Blake Oliver: Because it should have been collecting sales tax. It should have been collecting- David Leary: Yeah. It's a similar argument. Blake Oliver: Interesting. Um, a little bit more follow up news. Irs, this is something nice the IRS is doing. The IRS is going to issue special payments to 1 million taxpayers. So be on the lookout for a check from the IRS. I guess a lot of people did not claim the Recovery Rebate credit on their 2021 tax returns, and the IRS has announced plans to issue automatic payments to those who were eligible but did not claim it. You don't have to do anything. Payments are going to be sent automatically in December and should arrive by late January of 2025. You could get up to $1,400 per individual, and this is a total payout of about $2.4 billion to taxpayers. So again, if you filed a 2021 tax return but did not claim the Recovery Rebate Credit despite being eligible, you will receive this payment. I'm pretty sure that I claim this, so I don't think I'm going to get anything. David Leary: And hopefully you claim this for your clients because they're going to be upset. Why you do this when you filed the return- Blake Oliver: Just, just tell them, hey, you know, if you get a check in the mail, that's I'll take credit for it. David Leary: Yeah, that's for the work I did or didn't do. Blake Oliver: Exactly. There you go. All right. David. Well, um, always a pleasure chatting with you. It's kind of weird. Always this week between Christmas and New Years. I'm kind of out of it. I. I hope our listeners enjoyed this slightly discombobulated live stream. Um, wish me luck on my hand surgery. David, I hope your back recovers soon. God, we sound like like two, like old partners. Just like complaining about our medical issues. I mean, we're really embracing this vision of the accounting profession here. Um, I forgot to mention that FASB is working on, uh, soliciting comments for a new treatment of intangible assets. That's exciting. Maybe we'll talk about that next time. Thank you everyone. David Leary: I definitely want to go through a lot of the prediction articles I've been collecting and talk about the 2025 predictions. Are we going. Blake Oliver: To make predictions for 2025? Is that what we're going to do next week? David Leary: We could try. Blake Oliver: Did we do it last year? [CROSSTALK] David Leary: We did not do it last year. We've done it in previous years though. We're always right. It's just our timing is always off. We're always right about things. The timing is always off on our predictions. That's the problem. Blake Oliver: Well, shall I predict the, uh, the collapse of Bitcoin due to. I just. I couldn't believe this. Okay, so I have been critical of Bitcoin because I say, uh, maybe this is a stupid argument, but I just say there's never been anything in history that could not be broken from a tech standpoint, right? We like in Bitcoin it's called a cryptocurrency because it is based on cryptography. The whole thing works because of cryptography that you can have a public blockchain that can't be hacked because it's encrypted, like the keys are encrypted to access wallets and all that. But now Google apparently has come out with a quantum computer that could break all known encryption. David Leary: In minutes versus years- Blake Oliver: Yeah, like in a reasonable amount of time [CROSSTALK] David Leary: Decades. Blake Oliver: So so like if somebody figures out how to build a quantum computer, like what Google has built and then applies it to the blockchain to steal people's money, you know, like, this is why I'm like, why would we build a global financial system on top of cryptocurrency if that's a risk? There's no people in the loop anyway. Maybe that'll be my prediction. David Leary: The collapse. Blake Oliver: I'd like to have a little more optimistic one, but like, I feel like the next financial crisis is going to be because we end up creating all these derivatives based on cryptocurrencies. You know, just like we did derivatives based on the housing market. And then something goes wrong. And then, you know ... Everything collapses. Like you actually can see that happening now with Supermicro, um, which is the one that's invested in all the Bitcoin. David Leary: It's not Supermicro, it's MicroStrategy I think is that company MicroStrategy. Blake Oliver: They're borrowing money. They're they're levering up with convertible notes to buy Bitcoin. So which then drives up the price of bitcoin which allows them to buy more, to sell more convertible notes, to issue more convertible notes, to get cash, to buy more Bitcoin. Like this is this is where we get into the whole derivative situation where the value balloons beyond what is reasonable. And then it all comes crashing down at some point. But I don't know, maybe I'm way too early. David Leary: And people are buying that stock in a way like it's an investment vehicle. Like this is a way to buy coins and digital assets without actually buying it. Instead, just buy that company's stock who is very heavily weighted into. Blake Oliver: Oh yeah, it's like the whole company is just like Bitcoin now, right? It's just a bitcoin investment vehicle. Something like that. Um all right David I will see you here next week. Thanks everyone who joined us live. Don't forget you can earn free CPE with the earmark app. You've got a few days left to do it. If you have a December 31st deadline. If you want to support us in our work, do subscribe for just a low, low price of $150 a year for unlimited CPE. David Leary: If you're getting any clients that are coming in from bench, they have interesting stories, let us know. Be interesting to keep track of what the downfall of bench really means for the industry. Blake Oliver: See you here next week. Bye everyone. Bye.