Passive Tax Filing to Proactive Tax Planning

Mike Pine: [00:00:00] Welcome to the Hidden Money Podcast. Today, Kevin and I are excited to talk to you about the evolution of our tax practice. The evolution, not just of our tax practice, but, we think, of the entire profession as a whole. CPAs for too long have been proactive tax preparers. CPAs are known as reactive tax preparers, not proactive tax planning partners. We are tax planning partners and we are changing the firm to align with that, aren't we, Kevin?

Kevin Schneider: We are, and we are kicking off Season 3 of our podcast with some huge changes to even lean into that theology a little bit more. 

Mike Pine: Season 3 of Hidden Money. We got some fresh new content for you, and also some big news that we want to share with you.

Some revolutionary news.

Kevin Schneider: Revolutionary news! Revo-lutionary. So, a lot of CPAs are just caught in the past, [00:01:00] right? They're always worried about compliance, and trying to just keep up with the current filing cycle.

 Now, compliance is an important piece- it's something that is needed- but we get passionate, and we drive our business off the planning and saving people their hidden money. And with that, we are going to rebrand the firm to get away from that typical CPA mindset.

So, we're not going to be a CPA firm anymore.

Mike Pine: No, we're not going to be a CPA firm but we're still CPAs. What we are going to be- revolutionary tax planning advisors with our clients. We already have been, um, it's time to just make it official with our name. So same people here, except we're growing. I'm adding more people every week, it seems like.. But same people, same kind of service, but a different name to align with what we've been serving our clients with already.

Revo Taxpayer Advocacy. That's who we are. That's who we've been for a while, and now, we're finally making it official with our [00:02:00] name.

Kevin Schneider: Taking Mike's name off the door... kind of bittersweet. Oh, thank goodness... but we are really revolutionary. That's where the name came from, and that's where Mike and I decided to really lean into that revolutionary thought process, uh, of CPAs, and how we can serve our clients. And that's the number one thing we get from people who come to us for the first year, is, 'My CPA doesn't help me.'

They don't give me any ideas.' --and that's the point of Hidden Money. The Hidden Money is free content that we provide for education. It's just education of letting you people know what is out there, and what is possible with utilizing the tax code for your benefit. That's revolutionary.

Mike Pine: Absolutely, it is.

 It's not just the mindset of being a reactive tax CPAs. That's how the whole business model evolved over the last hundred years. Hey, The government needs taxes. [00:03:00] So they create a tax code. They say, 'Hey, it's getting a little complicated. So we're going to help you find licensed professionals.

We're going to license tax preparers.' --and it's all based around the tax preparation. The entire business model of our industry is based around preparing taxes, and that's really- looking at what's happened in the past- putting it on a form and sending it to the IRS. We don't like it that way. That's no fun.

I mean, it's biblical, Kevin, that we're supposed to let the past lie in the past and focus where we're going on in the future. That's what we're doing with our clients with revolutionary tax planning. You can take advantage of the tax code if you understand it. Again, like Kevin said, Hidden Money is here-

we created it to educate the public, and that's all we really do with our clients. So, we're educating them- Here are the incentives in the tax law. This is how you can utilize them... how you can harvest them for yourself. That's what we do every day, and that's what Revo Taxpayer [00:04:00] Advocacy will be doing for the rest of the future.

Kevin Schneider: If we are advocates for the taxpayer, so taxpayer is just a term. Hopefully, we're not paying a lot of tax. We're paying what we're legally obligated to pay, but if we could utilize the tax and make you a tax non-payer, that's all well and good too. But we are here to represent you, we are not here to represent the IRS.

We are not administrators for the IRS. We're not here to make sure everything is in compliance, 100%, on every line item, and be super just not willing to challenge what is the norm and the status quo. So, there's so much leverage. There's so much gray area in tax. And so long as we have the ability to

develop these tax planning ideas, they could fit you directly, and affect your wealth, short-term and long-term wealth, and that's what we get excited about, and that's why we're so excited to rebrand as Revo [00:05:00] Taxpayer Advocacy.

Mike Pine: Yeah, you mentioned already, we are no longer going to be a licensed CPA firm in the state of Texas. The only reason that's the case is, every state has a board of CPAs or some kind of governing body that rules the CPA world, and in Texas, if you have a licensed CPA firm in the name of your company, it has to have one of the partners, or all the partners in the name.

Um, Mike Pine does not sound very revolutionary to me. Kevin Schneider, a little more, but still not that revolutionary.

Kevin Schneider: Not really.

Mike Pine: Revo Taxpayer Advocacy- now that is revolutionary, and Texas Board says you can't have that as your name if you're a CPA firm. Well, we're no longer going to be licensed as a CPA firm, but Kevin's still a Texas CPA, I'm a CPA.

We have a lot of CPAs... not just Texas CPAs, but all over the country, working with us. We even have attorneys working [00:06:00] with us. But our firm will now just be Revo Taxpayer Advocacy, not a licensed CPA firm in the state of Texas. What does that mean about the service we're providing our clients? Does it change anything, Kevin?

Kevin Schneider: I think it changes the mindset of what a client can feel when they're working with us. They know what our target is. They know why we're here, and they know it straight from the get-go of our name. Because if you are hiding company CPAs, you could be doing payroll. You could be doing accounting. You could be doing

audits, compliance work. You could be doing taxes. Uh, That's your CPA firm. We are not that. So, I think our service model is still going to be the same to where we're proactively planning with our clients, as much as we can, throughout the year to save them taxes. Uh, We're just going to make it a little quicker for public and for people to get to why we're doing what we're doing, and what it is we specifically do, because when people ,call and they say, 'Hey, it's a CPA firm.' --we're going [00:07:00] to really make it clear that we are here to save people taxes.

Mike Pine: Yeah, even though we haven't done bookkeeping or payroll services for years, even this week, I've taken prospective new client calls, and they say, 'Hey, I need some payroll help,'. --or 'Yeah, taxes are kind of important, but more importantly, I need my books to get straight.' --and I have to say, 'I'm sorry, we don't do that.

We're taxpayer advocates, not bookkeepers, not payroll providers.' --Andthere's a lot of confusion. They say, 'But I thought you're a CPA firm.' --Well, again, here's why we're rebranding... one of the reasons... and why we're changing our name. Uh, It's interesting, in most states, I'm familiar with most of the states, especially Texas, California, Montana where I've been licensed. Um, You aren't required to be a CPA to prepare tax returns.

Most tax preparation services aren't CPA firms. H&R Block, that's not a CPA firm. Jackson Hewitt... most aren't CPA firms. You don't need to [00:08:00] be. Now, in order to represent a client in front of the IRS, you have to have some kind of credentials. You either have to be a licensed attorney, you have to be a CPA, you have to be the taxpayer, or you have to be an enrolled agent with, which is a system the IRS allows people to get accredited with them to be tax preparers.

But to prepare someone's tax return, you don't have to be accredited. You ought to be careful though. You don't go down to the handyman and ask him to do brain surgery on you, right? You shouldn't go to someone that actually knows how to run payroll and does it really well, and expect them to understand the Xcode either.

I don't. So again, we're trying to realign what we are presenting to the public as our services, but the services that we're providing our existing clients isn't going to change. The future clients, they're still hiring us to do what we're doing for our clients today, what we did for our clients last year, and that is to leverage the tax code to make sure you

are not paying more money than [00:09:00] you owe in taxes. Not a single penny more. You better pay every dollar you're legally obligated to pay. There's no need to tip the government until the government starts doing a little bit better of a job, if you ask me.

Kevin Schneider: Yeah. And what I really want to also say is our ideal client is going to be the person who has, I guess, the hunger to learn, the ability to stretch their thinking a little bit of what it is, um, what tax planning can even look like. Uh, That pit in your stomach that you feel every March and April,

being self employed, being a high W2 earner, uh, working your tail off day in, day out, and then getting to your tax return and still having to shell out more when you file, but looking at the total tax you paid- up to 37% of your income went out the door? That's not right, and [00:10:00] that feeling that you get when you file that tax return, that's what we're trying to solve.

We're trying to alleviate that feeling the best we can to make tax season for you an enjoyable, and something you actually look forward to because you've been planning, and you get to actually enjoy the filing because you're going to have a great result. It's almost like if you have two people who are getting married, and they don't plan the wedding, but they know, 'Hey, I'm getting married on July 10th.' --and it's July 9th, and they're like, 'Oh, we're getting married tomorrow.'

--and they have zero plan, and they have family coming in, is that wedding going to be stressful? Are they going to be at peace and enjoy the ceremony? I mean, 'Oh, what are we doing with food?' --Well, you know, they're not planning. What if they took the prior year, sat down together, and developed a plan of catering, developed a plan of hotels for their guests, and musicians, and everything?

 And [00:11:00] then, on the wedding day, they have someone already coordinated the plan. They just get to enjoy it. That is what we're trying to solve here to where let's do some work during the year. Let's put in some efforts. Let's stretch ourselves a little bit. But when we get to that filing,

you're going to enjoy it. That I promise you. We have so many clients that come to us and say, 'Is this legal? Can I do this?' --And yes, you can! It's available to anyone, so long as you're willing to accept the gray area of the tax code, which we do, we walk you through it, we defend it, we document it, and we do it safely.

 That's our job is to navigate you through that fog and get you to the other side.

Mike Pine: Absolutely. Um, let's get back to the purpose of Hidden Money, and ultimately, the purpose of Revo Tax as well. It's about educating people, as we've mentioned time and time again, and as we will [00:12:00] continue to mention. Um, As we are coming up with our new website, we've been working with our web designers, our content creators, uh, brand experts.

Wow. It takes a lot of work to really tune in your website for the true services you're trying to offer to explain your services to the public that don't really know what taxes, the details behind what we do. We've had a lot of people come up and say, 'Hey, so the IRS is the enemy..' --Or, 'Those evil IRS people.'

 --I want to rectify that and explain a little bit better. The IRS is not the enemy. The IRS- most of these people are hardworking people just trying to do their job. The IRS does need to exist. Otherwise there's going to be way too many people out there cheating on their taxes, and not paying what they're legally obligated to pay, and not following the rules.

The IRS is not the enemy. As a matter of fact, for most of our clients, we make the IRS almost an extended part of their family... a friend. The enemy is a lack of education, or [00:13:00] ignorance of what the tax code exists for, and how to utilize it. The tax code exists to make sure that we're all paying our fair share,

but even more importantly, it offers incentives to improve our economy, to improve our national security, to make things more fair for people. 

Kevin Schneider: You have to first define what the enemy is. And no matter what that is, in your life, or in your job there, you're always attacking something. You're pushing something forward, and you're usually pushing against something. And now, contrary to people, what they think- they think we're pushing on the IRS.

We're not at war with the IRS. We can't be at war with IRS. Mike and I are two CPAs. What are we going to do against an established, uh, an established government industry like the IRS is, that we have no chance of tackling them, or taking them down? We partner with them.

Mike Pine: Good news is... Yeah, we don't have [00:14:00] to. Like you just said, we partner with the IRS. The IRS is not the enemy. It's uneducation. Granted, there's a really good reason there's a lot of, um, lack of knowledge of the Internal Revenue Code.

The Internal Revenue Code is thousands and thousands of pages. And, even, it doesn't explain how the tax rules work. The treasury department has to interpret the tax code and they come up with tens of thousands of pages of regulations. There's a lot of information out there and most of it is designed, and they're available for the benefit of you, the taxpayer.

You just got to know about it. So, our enemy is a lack of knowledge. It is ignorance of the tax law. And we are doing our best with Hidden Money and with Revo Taxpayer Advocacy to advocate for these taxpayers- for you to know what the rules are, and use them for your benefit. That's what they're intended for.

That's why they were written the way they were written in Congress. They are there for the benefit [00:15:00] of you, and the benefit of our country. Let's work together with the IRS. Again, they are not the enemy. A lot of them are really good, hardworking people, and they're just trying to do their job, and it's not an easy job.

Can you imagine having to work for the Federal government and its inefficiencies, working on 30 year old computers? I mean, there's still some IRS agents having to use those green CRT screens. Not LED screens, not TVs, but the green cathode ray tubes that you can barely read the digits as they come across.

Those poor people are doing the best they can. They are not our enemies. We partner with them to help our clients take advantage of the tax laws as intended by our Congress.

Kevin Schneider: Now, there might be a time where we are at ends, kind of like with any relationship you may have. Like, I have really good friends, and every now and then, I, I get into conflict with them, right? That's part of life. So, with the IRS, it's the same thing. We partner with them utilizing the code they are [00:16:00] translating and we're going to utilize that for your benefit,

but we always say that the tax code is very gray. So, we can make a decision in that gray area that benefits our clients and the IRS could challenge us. Then it's up to us to defend that position. So, we're almost at that point we're in conflict with the IRS. So, there are times we're going to be in conflict with them,

but we're going to do all of our due diligence. We're going to do all of our education on the front end and get ready for it. We prepare almost every tax return that we prepare, assuming it's going to be audited. That is the quality control that we have here. And that is our standard is we're going to assume everyone's going to get audited,

even though, in reality, the audit rate is probably under 1%. I think we had one or two audits all last year, if any. Um, but we want to prepare for the worst case scenario. So, are we going to do a little bit more due diligence and quality control checks on the front end? Yes. But if we're [00:17:00] lopping off half of your income, or even all of your taxable income via tax planning, don't you want that quality control check there?

Don't you want that audit defense ready to go? And then, in the event that you are audited, you can breathe a little easier knowing, 'Okay, we've walked through this process. We know it's defendable. We have a better likelihood of passing this audit. So, I'm not going to get put in jail.

I'm not going to uh, get a slap on the wrist.' --It's just going to be an act of defending that gray position. But even positions- there are so many aggressive positions that the IRS allows for that aren't even gray. They are black and white and we have IRC code to back it all up, and we walk through from A to Z on how to implement those.

So, not everything we do is gray. There's a lot of black and white in the code too. And there's a lot of Hidden Money in that black and white. 

Mike Pine: Absolutely. And this is a reason... one of the many reasons Kevin and I are so excited [00:18:00] about Season 3 of the Hidden Money Podcast, because we're going to get into more of those gray areas. We're going to talk about the black and whites and the grays, and how they impact each other, and how they can impact and work for your benefit.

We've got some great guests lined up. We're still working on some of them, but I'm looking forward to this season. This is going to be our best season yet,

Kevin Schneider: Yeah, it will be. And I feel better... every season we go into, we improve on something, we get better. Going into Season 3, we're getting better, and, uh, you're going to see an improvement across the board uh, on all of our products, all of our podcasts.

And then, we really want you to be proud to be a Revo client.