Firm Management
Why I Don’t Talk to Salespeople
The emails always start the same. I’ve read your article in whatever publication. They say that I think differently, and want to talk to me. Like an idiot, I talk to them, and five minutes into the conversation, I am wondering why I took this call.
May. 07, 2018
The emails always start the same. I’ve read your article in whatever publication. They say that I think differently, and want to talk to me. Like an idiot, I talk to them, and five minutes into the conversation, I am wondering why I took this call.
I have been in practice for 24 years. I have seen a lot in that time. I have a certificate from UCLA in taxation. What I hate is when some salesperson quotes a Code Section to me. The call I got the other day was probably my favorite. This guy wanted to sell my clients on non-qualified (non deductible) Defined Benefit Plan. He offers that most Fortune 1000 companies do this. They then invest this money into life insurance.
My clients are business owners. How do I explain to them to put $600,000 away and get no tax deduction. Then the money goes into life insurance. The estate exemption is $5.49 million. Let’s say over a period of time the life insurance exceeds that amount. You have just created a taxable estate. They mention some code section, that I don’t even bothering listening to, where they say they skirt the estate tax. They only way life insurance is protected from the estate tax is an Irrevocable Life Insurance Trust (ILIT).
This strategy may work for an employee, but not a business owner. I could never sell that to my clients.
But that wasn’t the worst. I get a call from a person whose question is, is money from a sexual harassment lawsuit taxable? I explain that unless the money was for unpaid wages it is tax free. The guy starts arguing with me. Saying he did a Google search and I was wrong. I explain to him that he can search Google and find out how to untax himself, and how the 16th Amendment was passed illegally. Then he goes into the fact that he hasn’t filed returns for three years. He adds that he was self-employed and only got a 1099 for $1,500, and his wife didn’t make much money. So I ask the obvious question, what did he and his wife live on. No response. I explain that I have to pull transcripts, and charge a $2,000 retainer. The guy says that he has to speak with his wife, which is code for he doesn’t have the nerve to tell me no, he puts the onus on his wife.
Then, this one I can’t explain. I get an email about the good ole cost segregation studies. I thought the IRS shut these down, but apparently not. If you don’t know, a cost segregation study involves depreciating, and 179ing certain equipment. The good news for us, is we have to file Form 3115, which is always a good day.
Why do salespeople think they know more than a pro? No one can know the entire Internal Revenue Code, but I certainly know how to look code sections up. I don’t take anyone’s word for anything. I look it up.
Now we talk about Captive Insurance. Which is part of the IRS’s Dirty Dozen. I have no interest in those
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Craig W. Smalley, MST, EA, is the Founder and CEO of CWSEAPA, PLLC. He has been admitted to practice before the Internal Revenue Service as an Enrolled Agent and has a Master’s Certificate in Taxation from UCLA. In practice since 1994, Craig is well-versed in U.S Tax Law and U.S. Tax Court cases, and specializes in individual, partnership, and corporate taxation for high-net-worth clients; entity structuring and restructuring; and representation before the IRS regarding negotiations, audits and appeals. Craig is currently a columnist for CPA Practice Advisor and AccountingWEB and has had 12 books published. His articles have been featured in publications including the Wall Street Journal, The New York Times, and Christian Science Monitor, and he has been interviewed and appeared as a featured guest on numerous radio shows and podcasts. Craig can be reached at craig@craigwsmalleyea.com.