Suits, Birthday Reflections & Pursuing Life

First off, I would like to thank every one for the 'happy birthday' messages I received over the last few days. I really appreciate it. I turned 'double 4' or 44. I can't believe it. Mid-forties.

Each birthday, especially as you get older, causes you to reflect on what you have accomplished, how short life is, and what you still want to accomplish. Career wise, I have worked in almost every type of environment as a tax / state tax consultant. I have been self-employed the past 3 1/2 years. I have enjoyed working on my own - the money and the freedom have been great. Recently, I have been missing some things about working at a firm or corporate tax department - the teamwork and working together to solve problems and create opportunities.

My favorite tv show is "Suits." Lately, I have been binge watching the first 3 seasons. I still enjoy watching it over and over. I know it is a tv show, but I enjoy the fast pace, the creative problem solving, having to look at a problem from different angles to arrive at a solution that works. Albeit, in the show, the methods or solutions are not always legal or ethical.

I have been doing a lot of soul searching lately about my next career move, where my practice should focus, should I join a firm, etc. With getting older, we have no guarantee of tomorrow. We have to go for what we really want to do. We cannot go through the motions. We cannot waste time or days or months. We must pursue what we feel called to do. What we were made to do.

Looking back over my career, the times at which I felt the most 'alive' were when I was fixing or preventing a problem - controversy work. I call it 'research' with a purpose. Digging to find support for a position, to reduce an assessment. I want to focus on fixing and preventing state tax problems. I am a creative problem solver. That was what I was meant to do.

I get bored easily. I don't like wasting time on frivolous matters. I don't have time to waste. Life is too short. I have goals to accomplish. 

Even at home, I love fixing and preventing problems. I will kill myself to get a large project done in a day. I don't like dragging things out. If I have a 'honey do' list, I will move like a machine to get things done. I don't like incompleteness.

I leave you with a quote - "you can' keep doing the same thing over and over, and expect a different result." Also, if you want something, you have to take action and pursue it. 

I ask you, what do you really want to do? Are you pursuing it?

DO 'DEEP WORK' AND GET RESULTS

Are you doing 'deep work'? 

Meaning, are you digging into the facts and state tax authority to find what is essential? To find true cash tax savings? To identify, quantify and mitigate risk?

We are all bombarded with the 'fire drill' of the day - compliance or reactive, last-minute advice needed for a transaction. Perhaps a notice or audit assessment out of the blue with a tight deadline. Some of us respond to e-mail constantly.

It's time to do deep work.

To do the projects that others don’t want to do or have time to do. To dig into court cases, rulings, statutes, regulations, audit assessments, transactions, etc. to identify opportunities, risks and tax policy that should be challenged.

To work with tax professionals, and legislators to learn their perspective and shed light on areas that are grey.

To help reduce the unintended consequences of legislation and problems caused by actions taken or the lack thereof.

After we do deep work, we need to turn that ‘deep work’ into intelligence and tools that are practical. To communicate the application of complicated state tax authority into easy to understand terminology which allows clients to make informed decisions and act.

It is too easy to be reactive in life and at work. I seek to live and work proactively, and lead my clients to do so as well. I believe extraordinary efforts are directly determined by how narrow you can make your focus. I also believe in every set of facts or law, something essential is hidden.

I don't just want to be the best at what I do. I want to find the best way to do it.

State tax professionals solve problems through technical arguments, experience, negotiation and contacts. My role is to make it easier.

State taxes are deceptively simple and endlessly complicated. Let's do deep work and get results.

Louisiana's Gross Receipts Tax Proposal - So Good (NOT)

I just finished reading a post by Nicole Kaeding at The Tax Foundation about how confusing and bad the Louisiana Gross Receipts Tax proposal is. I couldn't agree more.

Why do states continually try to raise revenue by making tax calculations more complex which end up producing unintended consequences or unconstitutional tax regimes?

Many answers are possible, but I digress. Back to Louisiana's gross receipts tax proposal.

I had noticed that Louisiana proposed a gross receipts tax, but hadn't drilled down into the details. When I read Nicole's article, I couldn't believe what I was reading. I particularly love the flow chart she provides which shows the complex tax structure under HB628.

As the corporate income tax becomes less of a revenue source, will more states adopt something similar? I hope not, but as history tells us, states like to play copycat.

Here is a link to another post Nicole wrote which discusses what states currently employ gross receipts taxes and other states considering such a tax. 

FREE WEBINAR TOMORROW: STRATEGIC PLANNING FOR STATE NOLS

I will be co-presenting a FREE Bloomberg BNA webinar tomorrow on state net operating losses. I hope you can make it! Sign up here.

Some of the questions we will attempt to answer are:

• Is strategic planning for state net operating losses possible? 
• Do we care about federal NOLs?
• How are state NOLs determined and how can we plan?
• How does group reporting change everything and how can we plan?
• State IRC. Sec. 382 limitations - do they exist?
• How will federal tax reform impact state NOLs?

We will also cover some crazy state NOL rules.

Please join me.

Welcome to SALT CRASHERS! (Home Depot & DIY Meets State Tax)

"You can do it.  We can help."  "More saving. More doing."  These are slogans of the Home Depot home improvement company, but I think they may apply to the state tax consulting industry as well.

"DIY" or "Do It Yourself" has become a popular home improvement network (I think a spin-off of HGTV).  Shows such as, House Crashers, Yard Crashers, etc. come to your house and re-do your yard or house, but you do alot of the work while they direct and support you with a lot of additional workers, etc.  It is a coordinated team effort.  Does this approach sound similar to how you use outside consultants? 

I know some companies may hire outside consultants and totally hand-it off to them to do.  They don't have the expertise in-house and/or don't have the time to spend on the issue.  That is why they are hiring outside consultants.  

Other companies are more "Do It Your-selfers" or "DIYs."  They like to do things themselves and use consultants as an add-on or supplement on an as-needed basis.  However, if you have ever watched Yard Crashers or House Crashers, you may notice that having these outside experts come to the house shaves projects and YEARS off the homeowner's to-do list.  Meaning, the homeowner may have never completed the project without the help of these outside experts.  The homeowner also may have never thought of the ideas (i.e., landscaping plan, remodeling plan, the placement, the fixtures, etc.) for their house or yard.

Therefore, when asking yourself, what kind of person or company am I?  Am I a DIY or do I want to hand-it off?  Also ask yourself, what could I be missing?  Are there ideas and expertise that I could utilize to not only save my company money, but create a more tax-efficient structure?  

Trust me.  I am a DIY.  I like doing things myself.  However, even I have had to learn that I don't always know everything (shocker, I know).  Others can help with their ideas and expertise.  

Just remember, you can always do some things yourself, you just don't have to go it ALL alone.

Truly, in the SALT world, "you can do it," and "we can help" do seem to apply.  SALT consultants can provide "more saving and more doing."  

What kind of company are you?  

How do you prefer to work with outside consultants, and why?

State Taxes and The Compound Effect: Ticking Time-Bomb or Nest-Egg?

Some things change and some things remain the same.  Unfortunately, a lot of the time, the things we want to change, remain the same (and vice versa).  Hence, what can we do about it?  How can we change something, improve, and get the results we desire?  

I read a book a few years ago that I want to encourage you to read as well.  It is called, "The Compound Effect" by Darren Hardy.  It is a great book about how small actions, small differences in behavior or small changes can make a big difference over time.  

I'm sure most of us are aware of the compound effect when it comes to money, i.e., the earlier you start investing in your 401k, the bigger the "pot" in the future.  Well, the same principle applies to any area of your life that you want to change, whether it is relationships, your fitness level, finances, career, etc.  

Small changes made today and every day (completed with consistency) will produce big results at some point in the future.  Consistency is the key.  Hence, you have to have the perseverance and discipline to stick with the small change you are making on a daily basis so you see the result in the future.  The biggest reason people don't get the results they desire is because they give up too soon.  

How does this apply to state and local taxes?  Well, small errors, or areas of neglect (such as nexus, apportionment, inter-company expenses, etc.) can add up over time.  If no action is taken, an audit, a nexus questionnaire, etc. can arrive at your doorstep and the liability can be much greater than if action had been taken years earlier.  

On the flip-side, if action is taken today (i.e., restructuring, voluntary disclosure agreements, planning, etc.) cash tax savings can be achieved not only for one tax year, but on an annual basis creating additional funds (or "nest-egg") to be used in your business.

The compound effect is a great principle.  Just make sure that it is producing a "positive" effect for you and your business, instead of a "ticking time-bomb."

I leave you with this question from the book, "The Compound Effect:"  

"If you were given a choice between taking $3 million in cash this very instant and a single penny that doubles in value every day for 31 days, which would you choose?"