Ep. 79 | A Day In The Life of A Tax Pro

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Welcome to the Teaching

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Tax Flow podcast where the goal is to empower and educate you to legally and ethically minimize taxes paid over your lifetime.

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Hey, everybody, and welcome back to Teaching Taxville, the podcast episode 79. We got a good one for you today. I am actually gonna be interviewing technically interviewing Chris Pacquero. So I know you’ve heard his voice. Obviously, my cohost here in the podcast, but I get to, as always, play the dumbest guy in the room and ask questions of the smart guy.

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So before we get into it, as always, let’s take a very brief moment and thank our episode sponsor.

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This podcast is brought to you by Strategic Associates. Are you a high income earner, real estate investor, or successful entrepreneur who is frustrated by having to pay $75,000 or more of annual tax liability? If so, Strategic Associates can help. Your first step to saving 1,000, if not 100 of 1,000, is to contact Roger Roundy at roger@strategicag.net or by calling 8 016412956, and be sure to tell them TTF sent you.

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Alright, everybody. I’ve been looking forward to this one here for let’s see. We’re on episode 79, probably 77 episodes where I get to grill this guy on what actually goes on in his brain besides pickleball. We’ll try. Here’s a challenge.

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Chris, let’s not talk about pickleball. Well, you know what? Screw that. We’re we’re gonna talk about pickleball. That’s what goes on in your brain.

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It’s part of your daily life. But, good sir, are you ready for this sit down interview on the day in the life of a tax pro?

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I am, and I’m not gonna mention pickleball. I was not going to, but, of course, you did, which is fine. And I but as much as I love pickleball, I still have only been playing for about 2 years, maybe a hair less, and I’ve been a CPA for well over 20. So the day in the life of a tax pro, I live it live it every day. I like it or not.

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Especially around this time. Right? I mean, literally, the tax actually, Chris, what is the tax deadline this year? I know, you know, obviously, today being April 16th, is it still the 15th every year, or does it kinda fluctuate a little bit?

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Well, as you know, John, the tax deadline is a fictitious date, in my opinion, because you could always file a tax extension and get 6 extra months. Sometimes it is April 15th. This is the quote, unquote, what people call tax day, although I do not like that term. It is, it is so it was yesterday.

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You know, I I’m gonna I’m gonna say this. If if anybody before we get too deep into that one, I challenge anybody else that runs into Chris at an event to come up to him and say, don’t you just love tax season? And I bet you I bet you this guy carries around a taser with him. That every time every time you hear tax season, I know your face turns extremely red. You know, steam starts coming out of the ears.

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I would I mean, you’ll probably just drop somebody to the ground every time you hear that. Right? Well, if I

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have my pickleball paddle, I’ll take it out of the bag and we’ll hit them over the head with it.

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There. Hey. You said pickleball even though I’m the one that said it twice. There it was. So let let’s get into this a

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little bit. Alright. So April 15th is yeah. I know April 15th sometimes it falls on a weekend or we have Emancipation Day and that deadline is bumped. But, John, I think you just had a had a plan for me to mention that that’s your birthday.

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It it was a bay you know what’s funny though too if, I’m kinda curious on why the IRS ended up picking that day. I mean, obviously, it’s it’s a very special day for for me and everybody in my life, but it’s also some very unfortunate days if I remember. It’s the day the Titanic hit the iceberg. It’s, I wanna say it’s Adolf Hitler’s birthday. It’s the day Lincoln got shot.

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So it’s not really a good day. Infomist day. Obviously, though.

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Infomist day. Well, it really comes down to the and we’re the federal budget and and with a and how their fiscal year works. And it’s interesting because we did an episode on quarterly estimated tax payments from a federal side, and they’re you know, the first quarter is due April 15th, yet the second quarter is June 15th, the third September 15th, and then the 4th is January 15th. So it’s just an odd thing. But, yeah, the the what what is commonly referred to as tax day or the original the tax filing deadline or the deadline to file an original tax return or an extension is April 15th.

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That was yesterday. John, happy belated birthday, and, also, happy birthday to my youngest child, Luke, who’s 11 today.

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That’s right. That’s right. And so let’s take a a step back in Chris Picuro history, I guess. So obviously, we we wanna extrapolate as much information as possible from you on what your daily life looks like, right, as a tax pro. But maybe even go back a little bit and tell us how in the world you even got into this industry.

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Right? Because it’s it’s normally not when you hear a lot of people say, oh, you know what? I’m gonna when I grow up, I’m gonna, you know, be be a tax guy. Usually doesn’t happen. Right?

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Yes. It’s it’s funny. I was a guest on another podcast, a long form inter it was like an hour and 10 minute interview, and I said that it’s it’s rare that you have a young boy in the front of his yard throwing his baseball back and forth to his dad or or a daughter, you know, learn maybe doing something with one of her parents in the kitchen making cookies or throwing a softball, kicking the soccer ball, and saying, one day I wanna be a tax professional. It’s very rare, but many of us in this industry fall into it for one reason or another. For me, I’ve always been very, very entrepreneurial even when I was in my early teens, and we will I was a Detroit news paperboy back in the day when you used to drive your little bike around and have to collect the money.

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There’s a tons of lessons that I learned from being a paperboy on running a business. And then I had a knack for numbers, and then, I was lucky in high school. We had accounting as an elective in junior year, and then I did pretty well in that class. And one of a friend of mine’s dad taught AP accounting, which we would go into school early, which it was cool because he opened up the afternoon a little bit. And I took advanced placement accounting as a senior in high school, and at that point, I really, really liked it.

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And I I wasn’t great at every math. I was but algebra clicked for me, and really accounting is algebra. And so I thought, okay, well, if I become a CPA, then no matter what I do in business, it can’t hurt me. And so it allows me to really still be an entrepreneur. I’m more of an entrepreneur that that got into running an accounting or CPA practice than traditional.

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Many CPAs are enrolled agents or tax professionals. They they start working somewhere and their main skill is that they’re a tax professional and then it evolves where they start their own practice. But so I do a lot of consulting with other tax professionals on really how to run their practices more efficiently, how to have better client experiences, and from an entrepreneurial standpoint. So I have a good pulse of, you know, where I when I started, what I’m doing now. And when you proposed this very interesting topic, I I thought, okay.

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Well, how can I explain what we do, yeah, what we do on a daily basis as tax pros? And, obviously, it’s it’s it’s much different in each each from large, large firms to to maybe smaller firms to even tax professionals that work within within organizations. Like, a General Motors or Ford Motor Company or Amazon have tons of tax professionals, even internally, that work on a tax compliance. So I figured I broke this down into 3 components that our tax professionals operate in, and each of us works in in one or more of these a little more. Some tax professionals, many, many really wear all of these hats.

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So I broke it down into you’ve got tax compliance work, tax compliance activities, and under compliance, people might say, well, what lack does that mean? In my mind, that means the stuff you’re required to do. So that could be preparing tax returns. For some, it could be performing bookkeeping services. For some, it could be processing payroll.

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So these are things that have to be done. They have hard deadlines. And then the second bucket is our advisory services. So advisory services are more proactive planning and strategy. So advisory services, that’s what I spend about 95% of my time on professionally, and I help not only people in our private CPA practice, but other people in the teaching tax law community on a 1 on 1 basis and work and collaborate with other tax professionals to help people with planning and strategy, which is under advisory.

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So an example, a common advisory might be a tax pro talks to a potential a taxpayer about what type of entity they should be if they form a business, or should they, if they’re thinking about just selling a property, should they what what options they they have to mitigate their taxes, what type of software they should use. You know? If they should be utilize QuickBooks, what type of people they need to help them implement strategies. So for me, the advisory piece is that’s what I do, after spending most of my career in more in compliance. And then the 3rd part’s practice management.

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So if you’re a large, large firm, you may not spend tons of time in practice management, but under practice management I look at that would include any type of operations, that would include marketing, bringing on new clients, that would mean HR, it would mean continuing continuing education, running the actual business. And, unfortunately, many tax professionals don’t spend enough time in their practice management, in the practice management portion of what they’re doing. And if you don’t spend time you know, we talk about that if you don’t if you don’t plan for your tax, the IRS picks it. Well, if you don’t prep manage your practice, your practice is gonna manage you. And, unfortunately, for me, another story for another episode, it managed my life for a long, long time.

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So I I empathize, and I would say those 3 buckets, compliance, advisory, practice management. Now I’m really tilted into advisory with a little I do a little bit of practice management and not very much tax compliance at all. But I would say the majority of tax pros probably are pretty heavy into tax compliance work. So you

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do a lot of, or a little bit of practice management, but a lot of pickleball. There you go. I dropped it in there again.

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And it’s and really Not enough pickleball. It can never be enough.

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Right. That’s I knew you were gonna say something about that. So it it is interesting now, you know, coming from from my side of the fence. Right? So, obviously, knowing you for well over 3 quarters of my lifetime, you know, I’ve and I know I’ve mentioned this in multiple podcasts before.

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You know, our relationship dates back to you, as my grandmother used to say, doing the books for for them. And then obviously, my parents and myself, and now, obviously, we do a lot together, including have a lot of good times. But I think the most interesting thing, again, from the outside looking in, right, is just how much really your role has pivoted. And not even just that, really y’all’s private CPA practice. Right?

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So you guys have pivoted drastically. I’d say, what, probably over the past 5 5 years maybe or so is when y’all made the biggest shifts?

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Yeah. There’s some major shifts made. You know, the shift started about 10 years ago and really fully got implemented last 5 to 6 years. And and that’s like I said, when you when you’re first starting off and when you’re maybe you know, when I first started off, we were a team of 2. And so we had to wear all the hats, and so I was heavy, heavy tax com heavy heavy, heavy compliance.

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So we had you know, we were performing the bookkeeping services. We were doing what we call after the fact payroll. And and, again, this was 22 years ago, so we don’t we didn’t have the technology that we have now. Now I mean we’re a virtual on the private side. We’re a virtual practice.

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So all of our apps, everything, our entire technology stack is in the cloud, in a secure environment, and that’s just that’s how we operate. And, you know, I went through some some evolutions and and some some scares when we used to have, like, a server in our office or we used to have a computer crash or something like that. So in in in our private CPA practice, yes, we’ve really evolved into narrowing our focus into primarily real estate investors. We have a subnichen is helping estate planning attorneys and and and some entrepreneurs, yet, you know, not not all practices are are you know, I kind of not all practices are niched by industry. I mean, there could be a practice that’s in a smaller town, that’s maybe niched towards just business owners within a 10 mile radius because maybe there’s some very interesting local taxes or local considerations or or an industry that dominates that local market.

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Or it could be where a large, large corporation has a there’s a vast majority of people in that small town work for the that one corporation. So, so a lot of so you want a tax professional that is really familiar with with the those the you know, maybe the 401 k plan with that for that employer and there were and that sort of stuff. So really, yeah, you’re juggling that compliance advisory and practice management. I’d say the most challenging is, in many ways, is practice management because people, you know, like like think about when you go to the dentist or the doctor, and I know I’m kinda wacky as we know. I’m always looking at their processes.

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Right? Because their process is their product. That’s the way we look at things. And, but when you go to your dentist and doctor, are you really focused on the software they’re using, their their scheduling app, their you know, you just know that you probably you might like, hey. This is nice.

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They text me a reminder, and they and it goes right into my calendar. But those are all the practice management things that that a medical practice or dental practice has to consider. They also have HIPAA requirements. So we so we have our own requirements as a as a CPA or an enrolled agent or anyone that that prepares taxes professionally under Circular 230 of the IRS, that we have our own ethical standards. We have our own ways.

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We have to we have to protect client data. So we have a lot of regulatory things that we have to think about. I mean, quite frankly, and you know you’re aware of some of this stuff too. We have some regulatory bodies that we work with. I’m not gonna mention the ones here, but we have to we have to submit every transcript of this podcast, before it gets released.

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And we’ve got we’ve got so there’s a lot of stuff that goes to behind the scenes that people don’t see, and it’s not easy to to master those. And it’s and it’s not really easy to become efficient at those. So you you do a lot of failing forward. So, yeah, I think, you know, back to processes, I’d say, as a tax pro or any business owner. I’m trying to you know, I would say my attitude now is I fail forward a lot and we try to keep a positive attitude that it’s it’s only a problem until there’s a process.

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So if for some reason there’s a glitch in our software, if for some reason a you know, we get 3 emails from our clients that didn’t understand a piece of communication we sent out. If we get multiple people saying, you know, I didn’t really understand this. Maybe it wasn’t worded properly, so maybe it’s something that we did that didn’t clearly communicate what we’re trying to get across. When I think those things go through with any business. Right?

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Most businesses have that, the thing you’re doing and then the operations and the price. So and then also juggling healthfully, juggling, you know, servicing current clients, determining if we should bring on any new clients, making sure those clients are a good fit, making sure that if a client isn’t a great fit anymore that they that there’s a amicable split. You know, there’s there’s a lot of different things that go into it, not just I think the hourly facing thing is I would imagine people think that we probably spend 95% of our time doing tax compliance. Meaning, in when April 15th hits, we’re sitting around twiddling our thumbs, and that’s far from the truth. And and, you know, you know this, Jack, because you’ve been with me and, you know, we the summertime is a it’s a time where a lot of these big, big, tax and accounting conferences take place, and we’re we’re lucky to be part of those conferences and present our role many, many times.

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So, John, you’ve met I mean, you’ve met accountants from all over the country, so I’m interest so, yeah, you you should probably see just by talking to them, like, man, that person’s, like, really technically savvy. They know the tax code well, but, gosh, can you imagine trying to have them log into a Zoom meeting?

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I think I built up the suspense in your mind about the show that I was gonna grill you on all kinds of little nitty gritty stuff and and expose the world, so I promise I’ll be nice. And you know what I’ll do even just to make it worse, kinda keep the, carrot in front of you is I’ll just trickle them out over the next 10 episodes. Maybe I’ll take my questions and, you know, just to keep you on the edge of your seat. But I will let you off the hook, sir. So, you can, you can go take a nap if you want to, but, you know, it’s it is tax season.

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And the only reason I say that is because we’re virtual and, you know, I’m not within taser reach. So you’re not

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in Taser reach. And I would say just to point out, we do know that I’m very involved we don’t know that I’m very but I am very involved with the state of Tennessee CPA Society and Michigan Association of CPAs, and both of them identify that the main challenge, at least in our industry as a CPA is and as CPAs is that we have a talent gap of new people entering our profession. So we have to make this profession more attractive, and and I think we’re I think there I have hope. You know? Over the last couple of years, I’ve met a lot of people at that generation younger than myself or or maybe 10 years younger than me that I really have a lot of hope in.

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So so, yeah, I mean, it’s a great it’s it’s a great profession. If you know someone that’s interested in in learning about it, and, please reach out to us. I’m no matter where you live, I’m sure we can help guide you in the right direction and just kinda have a have a little chat about that.

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Awesome. Awesome. Well, sir, you are off the hook. And in closing, I’ll say one of the most impressive things that I’ve seen, really, you know, Chris, obviously, you and your practice, but, you know, a lot of people, they kinda poke fun of the industry and say, oh, you know, accountants and CPAs, they they’re very good at looking at the rearview mirror and not looking forward where I think now I’m seeing, obviously, you guys again, but I’m seeing more and more of them at these conferences. Either they’re younger, they’ve started this way, or they’re older and they’re transitioning into this is they’re finally starting to look in that windshield a little bit more by way of tax planning and strategy.

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So it is it is great to see that firsthand. Now I haven’t seen a pocket protector at a conference yet, but I’m sure they’re out there. So let’s leave it at that. We will save the rest of the questions for another day, another time. And as I like to always close it.

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We will see everybody back here next week, same time, different topic here on the Teaching Textful guest. Hey, everybody. Thank you for hanging out with us again here on the podcast. I was not kidding when I said I was building up the suspense trying to make Chris a little nervous that I was gonna ask him some very difficult questions to ask, but has anybody that’s ever had a conversation with this guy? You know it is incredibly difficult to stump him.

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The Inappickle Ball, actually, let’s put it that way too. Let’s be honest. He kicks my butt every time I even try to attempt the game, so I leave it at that. But next week, we’ve got a great topic, something that we have actually been asked a lot about. We are gonna jump in to discussing some modern payroll with a fantastic guest as always.

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So no more suspense for it. We’ll see you back here very soon.

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