Talk About Your Taxes – Be the Life of the Party!
Are you ready to talk taxes? If you’re running a successful, privately-held business, taxes aren’t the topic for lunch conversation that’s at the top of your list. It may not even rank at the bottom of the list.
I am sure you will agree that a meeting with a tax advisor who recites the Internal Revenue Code is as enjoyable as getting a root canal. Reviewing the bills to see how much you paid for the pleasure of listening to these recitals may also make you cringe.
In my experience, a professional and effective tax advisor helps with you tax-related management, transaction, and cash flow issues, while also being personable and easy to talk to. This is what you can expect from my good friend Dan Giordano, partner at DCG PC, an accounting firm focused exclusively on tax consulting and compliance.
Start with the Basics
For most businesses, the starting point for effective tax consulting involves the owner, the overall business history, the assets used in the business, and the other things that the owner has. Dan helps analyze, in co-consultation with a business lawyer, the business entities currently being used by the owner to conduct the business and related assets, such as real estate. Many of Dan’s clients have 2 or more business entities, including an operating entity and a real estate entity.
For some clients, correcting some of the tax-related mistakes that were made early in the life of the business can take several years to correct. For example, a complete change from being taxed as a “C” corporation to a flow-through “S” corporation takes at least five years. Other fixes, such as separating rental real estate into a separate legal entity, apart from the operating assets of a business, can be accomplished more quickly.
Build a Solid Team
Dan advises that you need to insure you have an engaged and solid record keeper (sometimes called “bookkeeper”) to receive, process, and store records and to create a data source from which Dan can provide effective analysis and consultation. A good record keeper also helps Dan’s firm to be more efficient by using electronic data interchange to begin the compliance function. By making the data-collection and entry process easy, efficient, and error-free, Dan can focus on giving you tax savings, where appropriate. Most clients experience some immediate savings because of Dan’s ability to zero in on things like timing and tax brackets.
The client controls the level of involvement with Dan’s firm, depending on the situation and the other members of the client’s team. For some clients, Dan provides a full spectrum of tax consulting and compliance services. Dan provides training and consultation for record-keepers, controllers, and financial managers. For other clients who are more involved in their company’s finances, Dan provides mostly compliance services with limited consulting services.
As the relationship matures, Dan devotes the necessary time and resources to learn the client’s tendencies and risk tolerance. This familiarity builds a lot of value because Dan can anticipate the character and timing of the client’s transactions and help his clients plan and react accordingly. Dan tells me that an intimate knowledge of a client and the client’s business provides the best value when the client is selling or transferring all or a part of their business because he can help plan for and execute the transaction in a tax efficient, secure, and beneficial way.
Needless to say, developing this kind of relationship takes a significant investment by both Dan and the client. Trust must exist on both sides of the relationship. To be a valuable advisor, Dan must be able to ask the right questions to provide you with the insights you need to complete a successful transaction.
I mentioned earlier that Dan’s firm focusses exclusively on tax consulting and compliance. Since they only provide tax services, they can focus on the records that others prepare and “zero-in” on issues and planning rather than providing retroactive CYA activities.
Dan’s been around, having practiced for over 20 years, and has acquired amazing clients. Some of his first clients are still with him, and the legacy continues with the children of these clients. Dan knew his passion for helping clients with tax consulting when he was in high school, and he worked in industry for 4 years before he even sat for the CPA exam.
90 percent of Dan’s clients are now friends and he takes the time to have a beer and talk about life and business. In addition to mutual trust, Dan enjoys his client’s personalities and their unique businesses. Aside from being a friend, Dan’s perfect client is a business owner with a complex tax situation that requires planning and professional consulting and who is looking to invest in a relationship to receive a lot of value.
If you’d like to meet Dan, or if you’d like some ideas about candidates with these skills to serve on your advisory team, please feel free to call me at 303-831-1411.
Steve Bush, attorney at law, founded Steven M. Bush, a Professional Corporation in 2003 in Littleton, Colorado. The firm specializes in representing privately-held businesses and their owners on a range of legal matters.