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On this episode of Practical Tax, Congressman Jared Huffman joins us to discuss green tax initiatives and Chris Westfall joins us to discuss side husltles for businesses.
Episode Transcript
Intro:
Welcome to the Practical Tax podcast, with tax attorney Steve Moskowitz. The Practical Tax podcast is brought to you by Moskowitz, LLP, a tax law firm.
Disclaimer:
The information contained in this podcast is based upon information available as of date of recording and will not be updated for changes in law regulation. Any information is not to be considered tax advice or legal advice and does not form an attorney/client relationship. Further, this podcast may be construed as attorney advertising. You should see professional consultation for your individual tax and legal situation.
Chip Franklin:
Hello and welcome again to another edition of Practical Tax with tax attorney, Steve Moskowitz. Steve, hope all is well.
Steve Moskowitz:
All is well and there is so much going on in the tax world. It just keeps us happy because we’re getting back so much money for our clients. For example, this ERC program, employee retention credits where the federal government is giving away their grants, they’re not loans, up to $26,000 for every employee that you have that qualified is tremendous and is helping out so many small businesses.
Chip Franklin:
We have been talking about this for four years, right? That’s been going on for a while.
Steve Moskowitz:
It hasn’t been that long. It may seem that long, but it hasn’t. And the bottom line is that… The important part is you have to know, and there are some real differences of opinion, who qualifies and who doesn’t. There are two tests. One test is a certain drop in gross revenue. That’s easy. It’s math, either above or below a certain number. But there’s a second test called full or partial closure. And that’s really a facts and circumstances test. For example, even an essential business like Safeway could only use 25% of the inside of their business, as was mandated by the state of California for all businesses from the beginning of the pandemic until 6/15/21. That may qualify them supply chain disruptions and so on. But it takes some work to figure that out and a lot of firms are ignoring that. If you don’t meet the math, they say no ERC for you, that’s wrong because the test is either/or.
On the other hand, the IRS is warning that there are a bunch of fraudulent firms just making stuff up and like anything else in your tax, obviously, you want to take everything to which you’re legally entitled, no more and no less. You’d never want to put anything on any tax return or anything you give to the government is fraudulent, yet some companies are doing that. And there are these popup companies, they just came into existence to file ERC and then they’re going to be gone when the IRS is asking questions whereas we’re a law firm and we’ve been around for over 30 years.
Chip Franklin:
Well, all of these trails lead to Washington DC eventually, right? I mean-
Steve Moskowitz:
Yes, they do.
Chip Franklin:
… [inaudible 00:02:28]. And we’re nice enough to be joined today by US representative from California, Second Congressional district since back in 2013, Congressman Jared Huffman. Congressman, good to have you here.
Jared Huffman:
Good to be with you.
Chip Franklin:
I understand-
Steve Moskowitz:
Congressman, thanks so much for joining us.
Jared Huffman:
Thank you, Steve.
Chip Franklin:
And you’re in the neighborhood just a little north of us and enjoying again, California. Whenever I hear about people saying, “Oh, we’re moving to Texas.” I’m like, “Don’t let the door hit you on the way out.” I love it here, right?
Jared Huffman:
Yeah. Yeah. California is still going strong despite the detractors out there who don’t wish us well.
Steve Moskowitz:
You know there are always detractors for everything. You can have the greatest product in the world and somebody is saying it’s horrible. But I live in California, the weather is great, it’s so much physical beauty, there is so much here, and I know the taxes are high.
However, as a tax attorney and one of the things that you do in Washington, I tell everybody that when we talk about the tax code, there are two purposes. One everybody knows is to collect money from us to run the government. But the other thing is, in a democracy, the government can’t order us to do something, even if it’s good for the economy and the government wants it. So how does the government get us to do something that they can’t order us to do? They pay us and they give us tax incentives. And that’s what tax planning is all about. When you see sometimes the Fortune 500, they’re making billions with a B in profit and not paying taxes because they’re doing something else that’s worthwhile for the country through the form of tax incentives and that’s why I went to law school. I was a CPA first and I said, “Hey, I want to be able to do those secret things that I see the Fortune 500 is doing.” And that just fascinates me.
Chip Franklin:
So Congressman, your district goes essentially almost right up the coast to Oregon and it’s a unique environment here in California. Some of the most beautiful shoreline in the world, I would argue. But to Steve’s point about incentives, I know that you’re a big supporter, if not of legislation, but in general towards green initiatives, which like anything, whether it’s the early parts of DARPA where we were trying to inspire companies to build or to create things that would help the entire nation and then lead the world, which I think we have an opportunity now to do because climate change is a real thing. There are real obstacles we face because of that. We have the kind of people and brain power here in California within 15 miles where we sit right now to really make that sort of change.
How does Congress look at this and are we moving toward really rewarding those minds, many of them here in California, that want to create; are we helping them with tax incentives?
Jared Huffman:
I think so, Chip, and it has been a busy two years in that regard. We have put some really powerful incentives on the table for all sorts of clean energy and domestic manufacturing. I believe we are finally beginning to reimagine what a decarbonized economy should look like and to put things on the table that match the scale of this climate crisis. We got a lot more work to do, but the work we have done in the last couple years is way more than anything we have ever seen before.
Steve Moskowitz:
And Congressman, you’ve done so many good things like with the new credits in the new inflation act where you’re saying, “Hey, be more efficient with energy in your new building and we’ll reward you.” That’s terrific.
Jared Huffman:
Or buy an electric vehicle, including a used electric vehicle. It’s great to now have a tax credit available for working class folks to liberate them from the tyranny of the pump. We have got incentives to decarbonize your own home with heat pumps and other electric appliances, incentives at the industrial policy level to try to drive the investments in grid modernization and battery storage and other things. It’s a really thoughtful package that kind of covers all parts of this challenge.
Chip Franklin:
Congressman, but the truth is, without the rest of the world, we can’t even begin to get our hands around climate change. And I get back to my original point, I think that we have to become industrial leaders in this new technology. And to do that, it kind of pushes against… And I’m more left than these days, but it kind of pushes against the left. Always saying, “Oh, you’re giving these companies these big breaks.” Some of these companies, the right companies, are the ones that are going to make this happen that are going to change the world. How do you make that argument? How do you differentiate that?
Jared Huffman:
Well, I don’t ever want to just light money on fire and give it to people who don’t need it. But I think we can do things like loan guarantees that leverage private capital and direct it in the right way to invest in the right kind of technologies and there’s an awful lot of that in this batch. The tax incentives though, or the other ones, Steve knows how these work far better than me. But what I know is that we heard from the folks who develop renewables and clean technology and they told us that these are the incentives that will have the greatest impact. And so I’m hoping that plays out and that it works well. But if it does, we’re going to see massive amounts of private capital flood into this space. We’re going to see innovation, we’re going to see breakthroughs, and hopefully we will preserve a livable planet for our kids and grandkids. That’s what this is all about.
Chip Franklin:
Yeah, obviously, I know that China wants to change. I know the young people there… I read a lot of the blogs that come from around Beijing where you can’t even breathe on a midday. But it’s not just there. Obviously, as we see developing nations in Africa and South America, we want them to do it right. We want to be those leaders. Al Gore was talking about it 40 years ago and even though we didn’t know what it was going to look like, and it’s still hard to tell what the immediate future is going to be like, we do know here in the North County about fires. We know that these wildfires wiped out a town. They threaten it every year. Knock on wood, we didn’t have it this year is bad. Yeah, right?
I mean, what can we do before we get to that point that might be 20, 30 years away? What can the federal government do to help Northern California stem the wildfire issue?
Jared Huffman:
Well, look, it has been decades of mismanagement that have put us in this catch up mode on fuel load reduction and healthy forests and other things. And also frankly, a lot of communities that were developed in pretty thoughtless ways into the wild land urban interface. So there is nothing we can do immediately. It’s going to take years, I think, to stabilize the situation. The other piece of it is that the conditions are going to get worse while we’re trying to catch up because it’s hotter, it’s drier, and climate change is doing a lot of this.
So it’s going to be a challenge that is with us probably for the long haul. But I do want to emphasize that it’s not like anything is going on. In the last few years, starting with some of the wake-up calls that we’ve gotten over the last six, seven years in California, we are pouring record amounts of money at the federal, state, and local level into resilience. We are hiring more firefighters, the federal government, we’re changing the way we approach wild land fire, partnering with the state much better, getting much more aggressive on prescribed burns and vegetation management. So that is happening and I could show you numbers that I think would impress you in terms of the dollars and the number of people and the projects and the square miles covered, but it’s going to take years of that to catch us up to where we need to be.
Chip Franklin:
Steve, I remember right after the fires, there were people trying to rebuild and there seemed to be some state and federal dollars that assisted in that process. You and others were philanthropic in your work to try to help people find out where they stood because I mean, it’s just a horrible time. You know you lose everything. Where does that stand right now? I’m going to ask both of you. I will start with Steve and maybe you Congressman for people that… They’re going to be more fires and they’re going to be people that’ll lose their homes. Do we have in place now something that will help them rebuild quickly with federal aid and/or state aid?
Steve Moskowitz:
So I always say, “But it’s never enough.” And what you have to do is these are people’s lives here. I mean, we’re not just talking at the traditional bricks and mortar. Sometimes you go to somebody’s house and they show you some marks on the wall and that’s where little Johnny was two feet tall and that’s where he was three feet tall and this is where he was six feet tall. And the memories and the Christmases and everything else, that’s not just bricks and mortar.
I have clients that their grandparents were born in the house and the parents and them. That’s a big deal. And yes, of course, money to rebuild is good and I recommend that. But I like what the congressman was saying is all the preventative measures, I would really rather spend $10 in my tax money preventing the fire than a hundred dollars of my money trying to rebuild something and you can’t rebuild somebody’s dreams and memories that are gone.
Jared Huffman:
Yeah.
Chip Franklin:
Yeah. I mean, but we can give them encouragement and help them in the process along the way. And that-
Steve Moskowitz:
Not to mention, you want to encourage them to build in the same area that they just got wiped out in and what kind of guarantee they’re not going to be wiped out again.
Chip Franklin:
Yeah.
Jared Huffman:
You know the other piece of this… We talked about the conditions that drive these fires and the fuel loads and such, but most of the worst fires we’ve seen in these last five, six years have been caused because we have an electrical grid that sparks fire when the wind blows, so let’s not forget that.
Yes, climate change is making conditions hotter and drier and making us more vulnerable, but it’s not unreasonable to expect electric transmission lines that don’t explode and spark fires. And we are catching up on that too, not fast enough, but PG&Ee and Southern Cal Ed and others around the state are going to need to help us out here.
Chip Franklin:
When I moved to California, having come from the DC area, I was surprised at the animosity and a lot of the confusion around PG&E and their role moving forward and this quasi-private quasi-government relationship, I never really understood, which drove the car. Was it the private side or was it the government side? And I think most people really understand that, but we do… I think we all agree and maybe all three of us would agree that we have to have more of that.
What’s amazing is to have this conversation with a sitting member of Congress in such a pivotal, important time of our lives and not get pulled into politics. We don’t have to do that. There are things we can talk about that we all agree need to be done. I mean, 98% of America would agree that we have to work together in order to solve a lot of these problems. Right?
Steve Moskowitz:
It must be just really more difficult than ever being a congress person because I remember the days when both sides of the aisle would go out to dinner after work and you say, “You know you’re not a bad guy, you might be a little misguided, but you’re not a bad guy.” And the other guy would say the same thing and you’d have a beer. And then, “All right, well I can move a little bit.”
There wasn’t the personal hatred that people were friends. And if you hate somebody, you can’t hear somebody if you’re shouting. And that’s one of the challenges that I admire you for dealing with every day.
Jared Huffman:
Well, I appreciate it. I can have some of those conversations, Steve, with a few of my Republican colleagues, but you’re right, there are probably a much greater number of them that wouldn’t want to be in the same room as me. Frankly, I feel the same way toward a few of them.
Steve Moskowitz:
That’s really bad because the way I think of it is the officers driving a ship and if they don’t want to talk to each other, what’s going to happen to the ship?
Jared Huffman:
Well, but we do talk to each other, the reasonable ones.
Steve Moskowitz:
Well, it might be-
Jared Huffman:
We still interact.
Steve Moskowitz:
Talking about anything like this?
Jared Huffman:
You’ll be surprised. I’ve got some friends across the aisle that, on a personal level, we get along very well. The scenario you just referred to where you kind of have a good friendly conversation and then get into compromise, that’s the part that we can’t get to these days because the incentive structure doesn’t let you.
Chip Franklin:
As a kid, I worked for Tip O’Neill and I also got to work for Connie Morella. I don’t know if you remember Connie. She’s from Montgomery County. She was a Republican, but in Montgomery County, which is like… She was very, very pragmatic and she overwhelmingly defeated any Democrat that ran. And then in Northern Virginia where we grew up, there was a Republican and a Democrat Harris and somebody, this along before you came to town, but every year these two guys would change. One would win, two years later, the other guy would win. This went on for 10 years and it was exactly the way it’s supposed to work. Congressman, thank you so much for your time. Will you come back sometime in the future please?
Jared Huffman:
Of course. Yeah. It’s always good to be with you.
Steve Moskowitz:
Congressman it was a real honor. Thank you so much.
Chip Franklin:
From the second district here in California, Congressman Jared Huffman, you be well my friend. You take care of yourself, all right?
Jared Huffman:
Take care.
Chip Franklin:
Thank you. See ya. Again, that was great. That was fun.
Steve Moskowitz:
Thanks.
Chip Franklin:
We should do that more often. All right, it’s time now for ask a tax attorney.
All right Steve, this is a simple question, but it really involves a lot. And that would be, what if I can’t afford to pay the tax that I owe?
Steve Moskowitz:
Chip that comes up all the time and so many people think they’re alone in this area. And they’ll ask me, “Steve, have you ever done a case like this before?” And the answer is yes. Literally thousands and thousands and thousands. So the first thing is change the mindset. It’s like if you’re sick and you can’t even stand up, a doctor wants to help you and people just feel this tremendous weight on them and they freeze, deer in the headlights.
If you stand there in the road, you’re going to get run over and killed. Go to the left, go to the right, you’ll be fine. And people, it hits them. It’s like they’re pushing them down onto the ground and into quick sand. They don’t know what to do and they make some mistakes. They don’t file the returns or they just say, “Catch me if you can,” or they ignore it, or they wait. All of those are wrong. Basically, what-
Chip Franklin:
Are you saying… Real quick. Sorry to interrupt you. Are you saying that if I can’t pay, I should still file the return and just tell [inaudible 00:17:29]-
Steve Moskowitz:
Absolutely.
Chip Franklin:
Oh, wow.
Steve Moskowitz:
Absolutely. And don’t forget the new 87,000 IRS agents that the government wants to hire. They got to do something. And one of the things they’re going to be doing is chasing after people. The bottom line is what we do is we’ll talk to you. In almost all cases, we can go to the government for the clients, so the client doesn’t have to talk to the government, deal with them, or have anything to do with it. And there’s so much that can be done.
For example, you might qualify for an offer and compromise. That’s where you just pay the government part and they forgive the rest, Chip, or pay in monthly installments or get the penalties forgiven. Or another one, something called the hardship deferral where you just lost your job or you got sick or something bad happened and we go to the government and say, “Look, my guy just lost his job or the business folded, or the spouse was sick. Leave us alone until he or she gets back on her feet. And then when we get the new job or get the new business running, we’ll come to you and we’ll make a deal.”
There’s a lot that can be done. And you have to remember the IRS is… They’re not monsters. They’re human beings. Most of them are reasonable. And if you get the occasional unreasonable person, there’s a whole system to go over their head. It’s really a good system if you understand how to work within it. And then we want to cut you deals so you can have a normal life and what I like to say is, “Sleep the sleep of the innocent.” I’ve seen too many people ruin marriages, lives, businesses over this and it doesn’t have to be. Most of these problems are totally fixable. It is like a medical doctor where so many things are fixable.
Chip Franklin:
And I think the bottom line there is if I had this happened with the IRS, like with me and I came to you, and you went to represent me, the IRS goes, “Oh, this person knows enough to get somebody to come in to try to work an offer and compromise as opposed to somebody that runs.” Because you can run, but there’s a saying that goes, “It’s the IRS, you can’t hide.” That’s ask a tax attorney with tax attorney Steve Moskowitz.
All right, our next guest, Steve, follows a Yahoo News report that 70% of Americans are seeking additional work to combat inflation. And it’s bad here. It’s really bad in the UK. It’s 83% in Turkey, so I guess it’s all relative, but six out of 10 Americans say they’re looking for these short term gig works, these side hustles we call it. That’s good for workers most times, but there are a lot of questions there. And joining us to help us an answer some of those is Chris Westfall. He is a business coach and consultant and author who has helped launch over 60 businesses, raised over a hundred million in capital investment, and he has written several books as well as the latest and new elevator pitch. He’s nice to be with us. Chris, this is Steve Moskowitz. Chris Westfall, Chip Frank-
Steve Moskowitz:
Hi, Chris. Welcome.
Chris Westfall:
Thank you so much guys. It’s great to see you. Thanks for having me on.
Steve Moskowitz:
Always a pleasure.
Chip Franklin:
Crazy times. With inflation, I think I’ve always had two jobs in my life. I’ve always thought it was because I’ve been self-employed, I was in media or something like that. It was always… I didn’t do it for money necessarily, I was just interested. What is driving the side hustle of the last decade or maybe longer? Is it always about money or is it just sometimes interests?
Chris Westfall:
The raging inflation really is the driving factor. I think people are looking for greater personal freedom and that’s part of what’s behind the trend of quitting. But ultimately, people are trying to find an answer for inflation that’s… I mean, as high as it’s been since ET first phoned home. Talking about 40 years ago, right guys? I mean, you know what I’m saying. So people are-
Steve Moskowitz:
Chip and I are too young to remember that, but I wrote in history books.
Chris Westfall:
I worked on that reference. I thought, will Chip get this? Or I don’t know.
Chip Franklin:
Chris, didn’t we… I mean, hadn’t inflation up until the pandemic pretty much been held? Since ’08, we really had not seen any kind of spikes. We actually saw the lowest interest rates I had seen in my life. It wasn’t like 1979 was stagflation. It’s interesting that Steve was telling me this earlier about when he was at Pricewaterhouse, they didn’t want you to get another job unless that job was what Steve?
Steve Moskowitz:
We were actually prohibited. If the company caught you with a job, they’d fire you on the spot. We were prohibited from having a second job. It said it made Pricewaterhouse look bad, it made Pricewaterhouse look like they weren’t paying a living wage, and also it made the employees unavailable because you might say to your boss, “Well, I can’t work tonight. I have to go to my other job.” They didn’t want to hear that. The one exception was teaching. They said, “We all know nobody does teaching for the money. It’s honorable. You want to teach, that’s fine.” That was the sole exception. But again, when I worked there, they had so many strict rules. We had to wear a blue suit and a white shirt. Things that were so past today.
Chris Westfall:
Right. Well, the thing that has changed, and I think the framing for this issue, is really the pandemic. Let people know, particularly knowledge workers, that they could work from home and still be effective. In fact, statistics show productivity increased by working from home.
Some folks are stepping into this trend of what’s called overemployment, where they’re not just having a side gig where they’re teaching on the side or they’re running an Etsy store or something like that. They’re taking on more than one full-time job. And this is a very troubling trend. And it got some traction when a post on LinkedIn from a CEO went viral because he fired two engineers who were twinning their salaries basically. They were working full two full-time jobs, I believe. The question I think for employers… Certainly, the tax implications of what constitutes an employee, but are employers really in tune with what they want done? Are they trying to command and control employees or are they needing to hire gig workers to get a job done? And when people treat full-time employment like a gig, that’s a risky business.
Chip Franklin:
Can I ask both of you this? Do a lot of people take full-time work simply for the health benefits?
Chris Westfall:
You want to swing at that verse, Steve? What do you think?
Steve Moskowitz:
The answer is it depends. Usually, it’s for the money because most of the side gigs are something they’re doing on their own, so they really wouldn’t be like an employer where you have to do it and a lot of employers don’t cover people that are working part-time anyway. So it’s kind of a fill in. If somebody is a driver for Uber or Lyft, they can do it whenever they want and they get cash right away. And then as you get into more sophisticated things, like for example, we have people that are investors and set up a separate company. One of the reasons they do that is you set up a separate company, then you can set up a retirement account and deduct a substantial amount of money with one of the pension plans, there are over 20 different types, and that’s one of the avenues. But again, you’re talking about more substantial income there and you’re setting up the entity to take advantage of some law. The bottom line is… I guess, a lawyer’s answer is it depends.
Chip Franklin:
Well, the reason I brought it up, we have AB five, it’s a piece of legislation here in California, Chris, that tried to get everybody that were the gig workers, Uber and Lyft especially, but others said they had to be employees. And so the company said, “Well we can’t afford that, so you lose your work.” Let me ask you guys both this and Steve, you too.
Would we be better off if… Say we had nationalized healthcare and just say that worked for a second, okay. So a company didn’t have to provide it. What would then be the upside of having to be full-time? You could find your 40 hours wherever, make your nut, and you can then… Obviously, if a company wanted to provide, this is going to sound probably a little Adam Smith, but if a company wanted to provide something, the invisible hand would reach out and get the people that really needed those kinds of… Like a pension or something like that or…
Steve Moskowitz:
Well, it’s not needed, it’s earning because needing… It’s a podcast, so I guess I can say a dirty word. That’s communism. If you have eight kids, you get paid more than a brain surgeon that doesn’t have any kids. That’s not the way capitalism works. But I mean, I’m an employer. I provide healthcare for my employees, I always have. And the reason I did it, I thought it’s something I should do. And I guess in the marketplace… I did it because I wanted to and I couldn’t imagine not doing it because I’m making an investment in these people and these people are making an investment in me.
But what about other things? Well, if somebody is looking for a job, I’m not the only employer in town and if they’re comparing my company to company X and I think everything else is equal and I’m paying healthcare and they don’t, well then that’s the reason why they come to me instead of somebody else.
So I originally did it, because I started practice over 30 years, I thought it was the right thing to do. And when I started off by myself and I had my first employee, I said, “I’m going to pay for your healthcare,” because I couldn’t imagine not doing it. But as the years went on and I added other benefits, that is an important factor in the marketplace. And if you’re looking for a job, that can be a big deal because you talk about healthcare… And I’m talking about we have really good healthcare. I’m not talking about something where it’s a million dollar deductible and then they’ll cover three band-aids.
We have good healthcare and I pay extra to get it because I care about my employees and I want them to have good healthcare. If the company doesn’t pay healthcare and if somebody went out and said, “Well, I want to get a plan that’s comparable for themselves, their spouse, their kids,” they’re going to spend a lot of money. And today, especially with the inflation and everything else, that can make a huge difference when people are scraping just to pay the rent and pay the mortgage.
Chris Westfall:
People today they’re looking for stability and that’s the same thing that employees have been looking for since time began. And it’s scarce. And Chip, just going back to what you were talking about in a scenario where benefits are taken off the table, in other words, they’re handled some other way. It limits I think the attractiveness and the levers that employers have to pull, so.
Chip Franklin:
Or they’ll have to come up with a better elevator pitch to refer to one of your books.
Steve Moskowitz:
Well, there are a few other things too. I mean, I can’t imagine anything more important than health. If you care about somebody, then you want them to have healthcare as a human being. Let’s assume you don’t. Let’s assume you’re just a machine or you think like a machine and you don’t care about people. You still want them healthy and working for you. So what I would say is whether you do it because… And again, when I started out I didn’t even think of that stuff.
I was some brand new young attorney and I hired a secretary and I just wanted to take care of her. I didn’t think about, “Well, wait a minute, what’s the competition?” It was a different time then really. But as time goes on, these are important factors in people’s lives. And now more than… Everything is so expensive and if you’re struggling to pay something… And I feel for people that have to choose between food and medicine or they don’t get healthcare because they can’t afford it. I mean, I remember when I was real young and I couldn’t afford food. I can afford all the food I want now, but I will never ever forget being physically hungry, never, if I live to be a thousand. So that’s why I-
Chip Franklin:
You have passion, Steve. I think that it’s rare for people that have done what you’ve done as long as you have. Generally, they get cynical and they burn out. And I think that part of that is because you look at the people and not just the numbers and you got to be successful. I mean, that’s why you were and others, I think, is people felt like after meeting with you or one of your associates because you hire people with that in mind, I know that they have to have the whole package. I’m going to ask you Chris, about your book, the New Elevator Pitch because I believe everybody should be able to present themselves in a 30-second speech because you never know when you’re going to have to whether it’s a date or it’s a new job or it’s whatever. And I think that you don’t see that you used to.
I don’t think people have a real understanding. If you ask me what I did, I’ve worked it out. I can tell you now. I love to create content. That’s what I do. I enjoy creating content, but with people. I don’t want to do it by myself. So I mean, how important is it for… And the last question too before we all go, I want to get from you as well, is are we moving toward getting rid of 1099 workers because either unions want them or whatever forces behind this movement? So a quick question, how important it is it to both you to be able to describe what you do in 30 seconds? Chris, you start.
Chris Westfall:
It’s vital. It’s crucial. And it’s important to understand that elevator pitch that you’re talking about explaining yourself is really nothing more than a conversation. So being able to start that conversation in a way that kind of calls back to what Steve was talking about that focuses on values such as compassion, caring, and if your business has more than one bottom line, which is what I took from what you were saying, Steve, I think the ability to express that, we are talking about products, businesses, et cetera, is very important.
I mean, in my work coaching clients on television shows like Shark Tank, Dragon’s Den in Canada, even Shark Tank Australia, it’s all about tapping into your values and being able to express those values in a way that creates engagement. And that’s especially true for employers. You ask another question in their Chip that I want to address and it is are 1099 workers going away? And my answer is, I sure hope not.
Steve Moskowitz:
And Chris, I couldn’t agree with you more in… It’s like even in today’s marketplace, I have employees that have worked for me for over 25 years and at all levels: attorneys, assistants, and I know their spouses and their kids and who gets sick and who’s going to college and where they are going. It’s such a major part of my life. And if you think about it, you spend more of your waking hours with the people you work with than your families and your spouses and your own kids. The bottom line is, I guess, I’m different… My whole life everybody has told me I’m different, even physically. I’m six foot eight, so I’m always standing out wherever I go. I don’t see how you can work with people and not get involved with them, yet I see sometimes the penny pinchers and the penny counters, they’re saying, “Well, they can save three bucks by cutting healthcare or getting some el cheapo.”
And when I advise those people, I say, “Look, you’re making a mistake.” There are things that… Back when I started out, I was a professor and one of the courses I taught in law school was accounting for lawyers. Of course, my little joke was there’s no accounting for lawyers. But one of the things I said was the whole story is not told on the financials. And I gave him this example. You have a perfectly well run factory. New factory manager comes in, management only cares about the number. He says, “Stop all maintenance, not a drop of oil, nothing. Stop everything.”
Initially, the profits will go up because you’re not spending any money on maintenance. So under this manager, the company made more money. And then the trick is he has got to get out before everything breaks down and it’s a disaster. I said there’s more to it than the cold numbers on the financial, but because I was a CPA before I was a tax attorney, I understand that. And if you just look at the numbers, you’re going to be sorry.
Chip Franklin:
Yeah, well, I mean-
Chris Westfall:
[inaudible 00:33:58] the whole story. Yeah.
Chip Franklin:
And that’s great coming from… Most people wouldn’t expect that from a tax attorney, but that’s what makes you different, Steve. Chris, will you come back with us please sometime soon?
Chris Westfall:
I’d love it. Great to see you guys. Thanks for having me on.
Chip Franklin:
All right.
Steve Moskowitz:
Thanks so much.
Chip Franklin:
Thank you.
Chris Westfall:
Appreciate it. Cheers.
Chip Franklin:
Chris Westfall. Take care, buddy. All right, coming up. That’s it for this show. As we always say, we have shows coming up and there are so many things to talk about. Obviously, with inflation, we’ll keep you up to date on all those numbers moving forward. Steve, great show buddy.
Steve Moskowitz:
Thanks, Chip.
Chip Franklin:
All right, we’ll see you guys next time.
Outro:
Thanks for joining us on the Practical Tax podcast with tax attorney Steve Moskowitz. To hear more and view more podcasts, go to moskowitzllp.com/practicaltax.