Hi there, everybody. This is April, the host of the Tax Section Odyssey podcast that you're getting ready to listen to. I wanted to provide a quick update on BOI, which we will talk about later in the episode. Today is March 4. A few days ago on March 2, Department of Treasury announced that it won't enforce any penalties or fine associated with this filing. We know that FinCEN a few days before that, said that they were going to extend the deadline. That was originally March 21.
They hadn't said what that deadline is yet. Between now and March 21, we do expect formal changes. We're continuing to monitoring this issue, but as of now, that's where we stand. No penalties or fines being enforced per treasury and FinCEN waiting to hear the final information. Thanks and continue to listen.
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On today's podcast strategies for surviving tax season. Hello, everyone, and welcome back to the AICPA's Tax Section Odyssey podcast, where we offer thought leadership on all things tax-facing the profession. I'm April Walker, a Lead Manager from the Tax Section, and I'm excited to be here today with Mark Gallegos. He's been a guest before. Welcome back, Mark.
Thanks for having me, April. April Walker: Mark's a partner at Porte Brown in the Chicago area. And here we are. The end of February is when we're recording this. We're really in the heart of tax season and I thought it would be a nice time to talk about what's on our minds today and in the coming months, as well as some strategies for surviving and thriving, more than just surviving [LAUGHTER] in the next six weeks or so as we get over the hump of April 15.
To start off, what challenges are you facing and how are you addressing them? April, it's tax season, and it's always those biggest challenges revolving around gathering client data, meeting with clients, managing this compressed work window that we're dealing with, and ensuring that from my perspective, timely preparation of tax returns, and extensions and keeping things organized and moving more efficiently.
Beyond the workflow itself, one of the biggest areas as a firm we're focused on is supporting our newer staff members. As a firm, we have a lot of new staff this year that are right out of college, and we also have a lot of staff, I feel like that are 1-3 years in experience, so very inexperienced, very young. We invest a lot in training throughout the year, but we just got to put a lot of things together in order to make sure that they're given the best benefit to succeed.
Mark is on the Tax Practice management committee, and we were talking the other day about some challenges that other fellow tax practitioners were experiencing, and I know that dealing with the IRS or thinking about how it's going to be to deal with the IRS is definitely top of mind for people. Do you have any thoughts around that or ways you're thinking about that with your firm?
I get this question quite a bit, especially in the last month. You can call the IRS. You still have your hold times, but getting correspondence processed has been a challenge for us. What I mean by that, let's just say taxpayer has a notice saying, "Hey, you owe a bunch of money," and you review it and you say, "No, they don't owe the money," and you send in a response letter. In the meantime, the taxpayer is receiving a notice from collections saying, "Hey, you've got to pay this."
Maybe then you're having to get on the phone with the IRS saying, "Hey, we've sent in a correspondence. Can you please put the account on hold," and they give you a 30-day hold? It's taken months and even in some cases, years to get correspondence to resolve this, even looked at or assigned to a manager. That's been a huge issue we've experienced. Again, it's frustrating because we're stuck in the middle.
We don't get to dictate to the IRS when to process this or when to assign this, but at the same time, the client is relying on us to be that bridge to the IRS. It's just constant communication from both directions, and that is frustrating, depending on how you manage it.
Sure. Is it a standard practice of yours to do a power of attorney in a lot of those cases or just across the board or how do you handle that?
Anytime we got to get involved like that, whether it's at the IRS level or any of the state revenue levels, then yes, our procedure is to get a power of attorney. Just because at some point in time, you're going to get on the phone, and they're going to say, "Do you have a power of attorney?'
[OVERLAPPING] Of course. Have you used or have you heard people at your firm talking about using the upload of the power of attorney to the portal or to the taxpayer pro account?
Yes, we have that and we use that and we have our admin do that. If I need a power of attorney for a client, I'll have admin prepare the power of attorney, and maybe I'll look at it or someone else will look at it and then get it to the client to sign, get it back to us, and then the admin will upload it. It's fast, it's efficient. I've had no complaints over that.
That's good to hear. [LAUGHTER] Hopefully, the ways to correspond with the IRS will expand with that electronic account. I guess we'll just have to wait and see how that works.
In the perfect world, I would love to see it where you can just upload or email a particular email address your correspondence and then get notification that it's been received and that it gets assigned. In the state of Illinois, in many cases, they have a portal called MyTax Illinois that you could upload your notices to. You even have email addresses you can send to, and you know someone's received it because you always get a confirmation, so it is nice.
I would love to see if the IRS can get there one day.
Again, just to reiterate, we're recording this on February 26, so things are changing with this topic. Sometimes daily, sometimes hourly, BOI and the Corporate Transparency Act. As we speak, as we're recording, the upcoming deadline is March 21 for reporting that was originally due January 1 of 2025.
March 21, that is not a very convenient time for our tax practitioners, those who might be helping or those who might be on the front lines trying to remind our clients about this, a lot of noise around this issue. How are you handling this topic right now?
The good news, at least from our perspective, is we're not preparing those BOI reports. At our firm, we made a decision in early 2024 that we would not prepare the BOI reports for our clients. Instead, our approach has been to educate ourselves on the rules, which, as you mentioned, seem to be daily.
Understand the deadlines, understand the challenges and how do we advise our clients in that and then really be more of just educational to our clients, directing them to the right legal counsel or a referral source that can do that for them. And that's been good. However, talking to other colleagues in other firms, I can see that with a March 21 deadline and a March 15/17 deadline coming up for the business returns or extensions, it's a nightmare.
Obviously, like you mentioned earlier, it's a moving target. You flip a coin one day and wherever it lands that's what we're doing. I suspect it could change, but needless to say, it's a lot of pressure on the accounting community to stay up to that, whether you're preparing it, whether you're advising your clients on what to do, or just, "Hey, the clients are calling and saying, 'What do I need to do?"' I know I've told my clients since last year, "Go ahead and get it done."
Many of them have just sat on the sidelines because they also hear in the news the various flip-flopping on this. We just have to take the approach of like, "Just make sure you're up to speed, but advise in a way that just helps your clients stay compliant." April Walker: That's good advice. The fun keeps going. These are just turbulent times, and I feel like every time I look at the news or open my email, I hear something else, new and different. I'm sure our clients are hearing that, as well.
You might be getting more and more calls around what's happening with this? What's happening with the tax bill? What's happening with the government shut down? What's happening with all of the above? A lot of anxiety, probably from your clients, from your colleagues, all the things. How are you approaching this and how are you handling those conversations?
Not to lead the witness, but at a certain point, you just have to get work done, and so you have to be the voice of calm, be the voice of reason, but I'm just curious how you're approaching this. There's a lot happening right now. My phone is flying off the hook daily, whether it's the cell phone or the work phone, but we have a new administration in DC since January. We have a large tax reconciliation bill on the horizon now.
We have the introduction of the Department of Government Efficiency that seems to be making news stories daily. On top of everything else, these changes create a lot of questions and discussions staff in my firm, clients, industry, colleagues, just people I talk to on a daily basis. My approach has been more twofold with this one is to stay educated and informed.
Take a 50,000-foot view of a lot of the things that are developing, just look at it, educate myself, try to understand the broad impact that it has without really getting lost in all the speculation and all the fodder that's out there and then I focus on what I can control. I break it into two categories, in my opinion, what I can control. What is my response to that, my communication, my attitude, whether I agree or disagree?
Then what I cannot control, like legislative changes, political dynamics, regulatory shifts. That's out of my control, so I need to understand where I compartmentalize all that. Then recognizing this distinction helps basically me avoid that unnecessary stress and anxiety and keeps me focused on the practical steps to just go about my day.
I take that approach, April, of leading with a positive attitude and a mindfulness, so I know that I can react and talk about these issues and with people around me, but maintaining a calm, solution-oriented approach versus just getting overwhelmed with it and just throwing darts everywhere and just getting wrapped up in all the minutia.
It's a good approach. Sometimes I take that approach, sometimes a little bit of chaos and panic over here in my world. [LAUGHTER] You guys are on the front lines talking to clients, but we're over here trying to help make sure our members are educated on all the things, which seems like a lot of things. Working hard, too for you, our listeners. You mentioned earlier, one thing that is a challenge or an opportunity, as they might say, is staff.
Do you have any strategies to share about managing your team effectively during this so-busy time?
There's a lot there, especially with all the staff at different levels, but really it's providing that hands-on guidance, identifying where we need to help advise or coach them in real time versus some sort of passive way and then prioritize check-in. Every staff member in our firm is given a mentor and a manager, two separate people. The mentors check in with them frequently. The managers check in probably weekly right now.
It's just more focused on how they're doing, making sure they're handling the stress of tax season in a healthy way. Are there things that they need, concerns, issues, whether it's in their learning, in their development? Whatever they're doing, really reinforce our cultural learning here as a firm. We do things, I think, in a very good way as a one-firm approach. We're a very process and procedure-oriented firm and I love that.
Why I love that is that it just gives us that ability to say, "We're going to do it one way." All year, we have a development committee that literally focuses on how do we take a basic task like a tax return from the moment the information comes in to preparing it, reviewing it, signing it, getting it out the door, and making sure the client is satisfied. All of that seems like redundancy, but how do you do it in a way that overcharging, not overbilling, and just making profit in the process?
With all that, you're narrowing it down to like, "We got to get down to the nuts and bolts. Someone's preparing it, young staff. How do we make sure that they have the trust in us to learn and grow, and they feel that security? I think that streamlining of workflow and processes is huge.
I'm sure they appreciate that.
There's many different models out there, and many of them are very successful, but I know as a firm, we completely avoidance of the silo approach as a partner, I'm not going to work with a staff, and they're going to be like, "When I work with Mark, this is how I do a tax return, but then if I work with Joe, I do it this way." That is a no-no in our firm.
We've given staff and managers and everyone else the ability to the open-door policy to say, "Hey, if you see something that doesn't seem right or someone says something, let us know." Because even if it's a misunderstanding, we want to make sure we nip all that, chatter in the bud, and make sure, "Hey, this is how we're doing it." Let's say you're working, April, you're like, "Mark the way you guys do things doesn't make any sense.
I love that." I'm always like, "That's great, but tell me what else we can be doing to get better." That's important.
Come with a solution , not just the problem. What are some other ways that you help foster a spirit of collaboration and keeping your staff motivated throughout this time?
Prioritize well-being and team support. One of the things we do throughout the busy seasons, we bring in professional massage therapists every Wednesday in all our offices so that basically people can sign up for a 20-minute chair massage. It's a small massage, but the reality is in the midst of the day, it's great to go and be like, "Wow, this is great." We definitely feed people [LAUGHTER] whether it's a good thing or a bad thing, but people love food.
I don't miss that busy Season 15 or whatever it was that I used to get. [LAUGHTER] But it's still appreciated.
Plenty of food and everyone seems to really enjoy it. What I like to do when we eat, go sit in the conference room, whoever wants to, and we're not working while we're eating. Let's just chat a little bit. Another thing we do is a couple of times during busy season, we'll have events later in the day just for the firm, say, "Hey we run out of a restaurant or we're going to go bowling or whatever we're going to do," just to take people away from the stress of work, which is good.
Like I said before, I think the mentor program is great here. It's not perfect, but I think the idea is when they're drowning in that moment of whatever it is, maybe I just don't understand anything about a partnership return and all these allocations, there's someone there to help them, whether it's the tax department, but also someone that can really guide them to whatever issue they're dealing with, which is great.
I know you pretty well, Mark. I know that even though you like to have fun, you're always thinking about work and things. Could you share some tips and tricks on how you stay on top of your task and deadlines so that you're not surprised by something?
One of the things that we've done is managing our workflow. The one thing that makes tax season the hardest that I've learned in my career is the fact that you have this small window of time to do a massive amount of work. The goal posts start probably getting moved, so we got to figure out how to make our time more efficient without burning ourselves out.
One of the things we made this year is a huge push for smaller clients, get those books closed early, whether it was December or early January, especially like small businesses, rental real estate partnerships, there's no sense in waiting until now or even March to get that stuff. Why can't we get that then?
We did a huge push on this this past year, and it has been hugely successful because we were starting to file returns right when tax season opened at the end of January, and we've been moving fast and furious when it comes to that kind of stuff. We also encouraged our clients from last tax season to get their stuff in earlier and set some deadlines. Nothing that's like, "If I don't get it by this date, you'll never get your return."
I don't make it that hardened, but really, the more you communicate with them, the more they start to adapt to a policy. Last year was great. This year is even better. People are already getting their stuff in a more formable fashion. What I mean by that is not everyone has all their K-1s or 1099s, but don't send me one piece of mail a day. There are some that do. I could say from some of the stuff that we've put in place in the last couple of years, we're really seeing the rewards of it now.
I know, from a filing standpoint, we're already ahead from last year in returns that are out the door versus the same time last year, work that's being done, so we're on a good position right now for tax season. Again, we've had this internal goal of being like, "Hey, let's get done by April 10." Again, that's probably not realistic. We'll probably be there till the 15th, but we will not be working till midnight on the 15th. I can tell you that. It's just things to look at
the workflow. Where does this all start? This all starts in the off season when you go, "How do we do? What can we do better?" Then really get everyone's input as to what do we need to be doing to make it better and try to come up with a solution and see if it works.
Mark, this has been a great conversation. We talked about a lot of different things. Any final thoughts?
I would say, as we push through the heart of tax season, remember that you're not alone in this journey. We're all in this together, balancing deadlines, managing our clients' expectations, and supporting our teams along the way, but it's easy to get caught up in the pressure and the stress of it, but don't lose sight of the bigger picture, I'd say, and stay focused, stay resilient, and take care of yourself.
The work we do matters, and at the end of the day, we will come out stronger, more experienced and ready for whatever comes next. Keep pushing forward.
I love you saying that. That's one of our themes also at the AICPA, is what we do matters, and what we do matters because this profession matters. That's really inspiring words. Mark, you've been on our podcast before, so you know this question is coming, but it's what we got to do. We got to talk about a journey together towards a better profession. I would like to hear about any journeys you have planned, maybe for upcoming year.
Once we get beyond the busy season here, I have season tickets to the Chicago Fire FC, which is the MLS soccer program in Chicago. That's fun to go to games. I love going to other sporting events, too. Conferences is always fun to go to, whether it's Engage or the national tax conference. I love being around people every year. I rent a beach house at the Outer Banks, North Carolina that's already set, and I'm very, very excited because I have so much fun in North Carolina at the beach.
It's great place to be. I'm telling you. Mark Gallegos: Absolutely. Then there's a lot of other trips along the way, whether it's going to New York or going to Miami, Las Vegas. I have a lot of things, and I'm very excited about that. It's fun to keep things on the horizon. Thanks again, Mark. I appreciate your time as always. Again, this is April Walker from the AICPA's Tax Section.
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