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Energy CEO Grant Norwood discusses investments in Oil and Gas, while Yoseph West talks with Steve about challenges facing small 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:
Welcome to another edition of Practical Tax with tax attorney, Steve Moskowitz. Steve, you and I were just talking about energy and about electric cars and about the state of California then as we speak with the power grid being stretched to the max. So I thought it’d be an excellent time to bring in our first guest, Grant Norwood. Grant is CEO of Norwood Energy Corporation, which he’ll tell us a little bit about that because that’s down in Texas and he’s nice enough to join us here. He also handles the day-to-day operations and evaluates oil and gas prospects and minerals. It’s a lot.
Steve Moskowitz:
Good old Texas, with no state income taxes.
Grant Norwood:
We love it.
Steve Moskowitz:
I know. It’s a bit different here in California with such high income taxes. And so many people in California are moving to your state.
Grant Norwood:
That’s true. If you moved over here you’d probably have an easier job.
Steve Moskowitz:
Probably would, but people everywhere need me.
Grant Norwood:
That’s true. That’s true.
Chip Franklin:
That’s true. That’s a racket that Congress set up with taxes. What was the 16th Amendment with taxes? What year was that, Steve?
Steve Moskowitz:
Taxes became effect in 1913 and I was not in law practice in 1913. I just want that to be clear. And when the income taxes came in, it came in as a tax on the wealthy. The top tax rate was 6%. And do you know how much income you had to be making in 1913 dollars to hit that top 6% bracket? Half a million bucks.
Chip Franklin:
Wow.
Steve Moskowitz:
In 1913. Do you know how much money half a million dollars was in our dollars in 1913? That’s how our income taxes started out. And that’s what happens when the government starts off with just a little tax that’ll only affect a few people. And look what it is today.
Chip Franklin:
There was a panic of 1913, too. Wasn’t that a run on banks? There was a difficult time, right?
Steve Moskowitz:
There have been all kinds of challenges. But again, I’m focusing on the tax. And there there’s so many taxes that governments start off with, “Oh, let’s vote it in. It’s not going to affect you.” For example, politicians saying, “Oh, we’re going to put this tax on corporations but it won’t affect you.” Well, of course it will, because corporations say, “Okay, my costs are up, therefore I’ll just charge more and consumers pay it.” So that’s why when people think about a tax, they should think, “Well, wait a minute, this could really affect you. What’s the government doing with the money?” And that’s one of the many reasons I became a tax attorney.
Chip Franklin:
Speaking of which, taxes in the state of California on gas, this is your belly whip, Grant, make it so much more expensive here to purchase fuel than it does in other states. Well, let’s talk about where the price of crude and gas is right now for Americans. It seems to be going down since the last time we talked to you appreciably, especially in the last six weeks. Where are we headed, and how long will it take to get wherever that is?
Grant Norwood:
Well, we have seen the prices fall back just a little bit. I would say that it’s a little bit of this renewed Covid fear. We don’t really talk about it over here much in the States, but if you kind of read the publications and some of where demand has a little bit of a retracement, it’s all coming from Asia primarily. So you’ve got a little bit of that issue. There hasn’t been any new, I guess, tension over in the Middle East. So what was driving it before was just the fairly new information about Ukraine and Russia. And then I think we’re about to probably climb back up. So we’ve gotten over kind of these little, I guess, sensational events that drive it one way or the other. Now it’s evident that we’re still far behind on supply from where we need to be. So we saw it climb just a little bit, it looked like we were headed to 100. Today we’re lower, but I think next week you’re going to see it go right back up to if not 100, somewhere in the high nineties.
Steve Moskowitz:
And Chip, the part I look at is from the investor’s point of view. Our Congress has given such tremendous benefits to oil and gas. Look about the exemption from Alt Min taxes, look at all the writeoffs with intangibles. And the bottom line is, Congress has so favored the oil and gas industry that for many people it’s just a tremendous investment. And besides the investment itself, all the tax benefits that go along with it.
Grant Norwood:
Correct. Correct. And they’re buying votes by trying to shame it, but they’re supporting it physically by supporting all the tax benefits because they know we need it. They know it’s not going anywhere. But hey, it’s kind of in vogue to talk about the green initiative and to make it a little bit harder on the oil and gas companies. But the policies and the topics of conversation, they just conflict with each other.
Steve Moskowitz:
Absolutely. And let’s take a look here in California for a second, what we were talking about off air.
Grant Norwood:
Yes.
Steve Moskowitz:
Where California says, “Okay, we want to have all these electric cars” and then they say, “Oh, by the way, but don’t use your electricity.”
Grant Norwood:
Right.
Steve Moskowitz:
So how is that going to work? And oil and gas is so vitally needed. And again, there’s a lot of things that are not considered. For example, somebody says, “Well, look. If you have a commute, you can charge up your car while you’re at work.” And that’s fine, but a good thing about oil and gas is gas stations, filling stations, are all over. What about that good parent who’s very green conscious that drives the car to work and the car has to charge up for some hours, and then that parent gets a call from the school, “Oh, your kid was injured. We sent them off to the hospital.” And the parent wants to go to the hospital, “But wait a minute, the car’s not charged up.”
And although yes, the car could be out of gas, but if it is, that’s five minutes in the filling station, not hours at some charging. So the bottom line is what Congress is really talking about is in the pocketbook, having all these advantages tax wise. So the bottom line is, oil and gas is not only very, very much needed, but also is here to stay and a tremendous investment with all these tax incentives.
Chip Franklin:
Well, aren’t a lot of the oil and gas companies investing in the new technology? I remember reading where Exxon, some people may find it ironic, but they’re really looking to try to get as green as possible because they know that there is something coming about.
Steve Moskowitz:
It’s just like the tobacco companies investing in cannabis. It’s you go ahead and you say, “Let’s make a good investment.” But basically, for all of our lifetimes, oil and gas is alive and well and a tremendous investment.
Grant Norwood:
Right. And just from our end, I’m only got one private equity fund, but from most of my PE back to associates, they’re asked to at least have an ESG component somewhere in their portfolio.
Chip Franklin:
What is an ESG component?
Grant Norwood:
It’s basically something green in the portfolio, just to make it easy. So what they’re doing is tiny investments into it just so they can check the box and get the t-shirt. But they know that’s not where the money is. They know it’s a loser from an investment standpoint, and it’s virtually ineffective if not more detrimental to the environment than actual oil and gas. But just to kind of check the box because if you don’t, there might be a mob outside of your building. They’re just implementing what little bit they have to.
So I think that the bigger companies are doing that as well. There’s so many activists, investors, and they’ve got such strong followings that it actually helps them just to appease a little bit. And kind of in a market like we’re in, where everything’s falling except the energy sector, it’s kind of your only hedge if you don’t want to just pull out the market all together.
Chip Franklin:
What is the status of drilling and new exploration? Where does it stand right now?
Grant Norwood:
I think that we’re slowly going to start seeing a resurgence here in the United States. You’re not really seeing it anywhere else, and it’s lacked for so long that we’re far behind. And I think maybe it turns a corner three, four years from now. But let’s say they really, really get started three or four years from now. Corners have radiuses, and it takes a long time to make those turns. So depending on what you subscribe to, $150, $200 oil. I personally think over the next six to nine months we might even see $70. But then I think it climbs right back, because there’s not really anything to tip the scales and provide enough energy to where we have a low pricing environment again, or even normal pricing environment, it’s just gone with the wind.
Chip Franklin:
Steve, does investing in energy generally require a person to be an accredited investor?
Steve Moskowitz:
Yes. Now it also depends. There’s some things that are riskier than others. Are you talking about royalties? Are you talking about operating? So, yes. But again, we’re talking about investments, so this is something that’s really good for accredited investors.
Chip Franklin:
Well, what about the technology that’s… I would agree with both you guys that it’s not cost effective yet. And your example with the electric car is true. But at some point, just from geopolitics wise, it’s probably smart to have other alternatives. Would you guys agree?
Steve Moskowitz:
Right. Well, what I would say is, that geopolitics is wonderful until you’re in a cold, dark home with no food to heat up, and they say, “Well wait a minute.” Because people, they talk about politics, but also you have to live. They vote their economics, they vote their wallets.
And again, it’s fine to say these things and these are laudable goals, but we have to be practical. If you can’t get from your home to your place of business, if you can’t heat your food, if you can’t take a hot shower, if you can’t light your home, you say, “Well, wait a minute. What’s going on here?” And then you say, “Well wait a minute. What do we need to explore?”
So with green energy, that’s fine and that’s good. But I see it coming in a lot more slowly than, for example, the Governor of the state of California wants it to come in. Yes, eventually we come in. At some point, maybe somebody will invent something where there’s a solar panel on a car and you just drive around. You don’t have to charge anything, the sun just gives you unlimited energy forever. But that’s not going to be in our lifetime or the kids’ lifetime or the grandkids’, maybe the great-grandkids. So right now, we’re talking about say, the investors on the next, should we take a look at how many, 50, 100 years? We have to be practical for what we have now.
Grant Norwood:
Absolutely. Yes.
Chip Franklin:
And cars are a lot cleaner than they were 50, 60 years ago, without a doubt.
Steve Moskowitz:
Oh, absolutely.
Grant Norwood:
Yeah. My diesel truck, I’ve got to put diesel emissions fluid in it about every three fill-ups. So they’re making leaps and strides. And I’m for all in energy. Keep improving. If we don’t encourage this renewable thing, a hundred years isn’t long enough to figure it out. Hey, maybe something comes along in the next decade or so. It’s just not here yet, so it can’t be part of the plan, per se. You just can’t have intermittent sources, because what happens on the other side of that intermittency? So you’re just left without.
Steve Moskowitz:
And a workable plan is something that can slowly be eased in, and I can see people accepting it. When you try to shove something down somebody’s throat too quickly, they’ll say, “This doesn’t work.” And they could wind up abandoning it and actually hurting their cause. So I would say, if I was advising the Governor, have a workable plan, but oil in gas in our lifetimes is so vitally important.
Chip Franklin:
Steve, you always say this, and it’s so true in this, is that the government tax system of taxing businesses can be used as a motivational tool to guide people toward again, giving somebody a break on taxes in order for them to create more jobs, in this particular case, more energy, more options. One of the things I would love to see is improve battery technology.
Grant Norwood:
Correct.
Chip Franklin:
Because that would help everyone. It would help a non-renewable and help renewable, as a way you could keep and store energy for a long period of time. And that goes to the heart of what we were talking about at the very beginning. Grant, so this is exciting. You and I are going to talk about some other stuff a little bit later on, and I’m looking forward to that as well. I really appreciate you being with us here.
Grant Norwood:
Yeah.
Chip Franklin:
And I love listening to you guys talk, because both of you guys are passionate.
Grant Norwood:
Yeah. No, we think a lot alike. That goes a long way.
Chip Franklin:
All right. Well, you be well. Have a great weekend. We’ll talk to you soon.
Grant Norwood:
Right.
Steve Moskowitz:
Thanks so much.
Chip Franklin:
All right. Time now for our “Ask a tax attorney.” Steve, this has been in the news. The IRS went out and hired 87,000 agents. That sounds intimidating, and it sounds or Orwellian, dystopian, whatever adjective you want to give. But how does that affect the average person? I know you always tell people, “Do their taxes, do them right. If you don’t cheat, you never have to worry about anything.” But how does 87,000 agents, is that a big number? And is it something the average taxpayer should worry about?
Steve Moskowitz:
It’s a huge number. Worrying about it isn’t going to affect it, so I don’t say worry about it, I say prepare for it. What’s going to happen is audits are going to skyrocket. I know the government says, “Oh, it’s not going to affect the middle class. It’s only going to affect those big, bad people.” And you know what? That’s why I made the reference earlier in the show how our income taxes started in 1913 as a tax on the wealthy. And it was only, the top tax bracket was 6%, and you had to be making more than half a million dollars in 1913 dollars, which in our dollars is an incredible amount of money. It was selected just for the select few. And look what it is today where it comes down on everybody.
These agents have to pay for themselves. The President says that he wants a big return on their salary. Well, how do you get the big return? It’s auditing. And what happens is, it’s much easier for the government to enforce the tax laws that we have now then pass new ones, because if you have a tax raise, which the government wants to do too, everybody’s up in arm saying, “No, not more taxes for me. Put the taxes on somebody else.”
But the agents will be there to inspect, audit, do all kinds of things, and it’s going to make a big difference. But the bottom line is, what I’ve always said is, you take everything to which you’re legally entitled, no more or no less. It’s kind of like hiring more police officers. If you drive a car, you’re more likely to be stopped, but so what? You show your driver’s license, registration, insurance, and drive on your way. But that’s what’s going to happen. There’s going to be a lot more to deal with.
Chip Franklin:
All right. Our next guest is Yoseph West. He’s a co-founder of and CEO of Relay. Now Relay is a business banking platform that gives SMBs better visibility into their financials and simplifies the whole thing. And he’s nice enough to join us here on Practical Tax. Yoseph, let’s get you… There we go. Hey, good to have you here. Hi.
Yoseph West:
It’s great to be here.
Steve Moskowitz:
Hello.
Yoseph West:
Thanks for having me. Nice to meet you both.
Chip Franklin:
I know Steve loves to talk about small businesses and I’m a big believer that small-
Steve Moskowitz:
That’s the heart and soul of America.
Chip Franklin:
Yeah. Without a doubt.
Yoseph West:
They’re very inspiring, right? They show up every day to make something new and to service their customers. I can’t think of anything better.
Steve Moskowitz:
And they care about their customers. When I look at a giant corporation, and I know there’s always exceptions and I know that there’s some individuals that are great, but I know the difference when I go into a giant store or I go into a mom and pop. If I go into a mom and pop, mom and pop really care to keep me as a customer coming back. The giant corporation, it’s just, it’s faceless. It’s soulless. It’s just a giant corporation. And a lot of times they want to crush mom and pop. And as a consumer, I just feel so much better taking care of with mom and pop than I do with the giant corporation. Mom and pop care, and I can’t say that all the corporate employees do, with exceptions, of course.
Chip Franklin:
Mm-hmm. Well tell us, Yoseph then, so what was the problem that small businesses were having, that brought you and Relay and your group together to try to alleviate and or solve? What was that?
Yoseph West:
Yeah. I think small business owners face a host of challenges, and obviously the last couple years have been exceptionally challenging for them. And the issue that we kind of saw consistently and in my career, I’ve basically only worked with small business owners. That’s who I’ve built software for for over 10 years. And the challenge that they always have is access to financial information, basically. Sorry, did I lose you guys?
Steve Moskowitz:
Steve’s here.
Chip Franklin:
No. I’m just listening.
Yoseph West:
Oh, okay. Sorry. I was like-
Steve Moskowitz:
I was listening.
Yoseph West:
No. Okay, great.
Chip Franklin:
So just for the record, when I want to scratch my nose, I solo you, so that nobody sees me scratch my nose. But no, what you’re saying is right. When people talk about small businesses, they talk about the problems they have, and financials have obviously got to be a huge problem.
Steve Moskowitz:
And Joseph, I couldn’t agree more. The number one problems that small business have is money, is capital. And finally, finally, finally, the federal government has done something. One of the things that’s helped out so many clients is a program called ERC, Employee Retention Credit. This is where the government is giving, they’re grants. They’re not loans. They’re giving up to $26,000 for every qualified employee you have. So if you had 10 qualified employees, you could get up to over a quarter of a million dollars and so on.
And there’s two different ways to qualify. And one of the things I’d like everybody to know is, there’s a lot of confusion here. Most everybody knows that a certain drop in gross revenue will qualify you. But so many advisors and a lot of CPAs, and I was a CPA before I was a tax attorney, so I know something about it, tell their clients, “No. If you didn’t have the drop in gross revenue,” but that’s the easy test. It’s mathematical. “Here’s a number. Are you above it or below it?” Nothing to think about.
But there’s a second test, a facts and circumstances test. And there’s all kinds of examples here. For example, here in California, for a long period of time, businesses could only use 25% of their capacity. And people were confused. “Oh, but I was an essential business.” So is your local grocery store. But remember, they were limited to 25% capacity, too. Or you had supply chain problems, or your customers were closed because of Covid restrictions, or you had to change your hours.
And I could go on and on and on and on, but the bottom line is, there are so many people being told that they don’t qualify because they didn’t have a certain drop in gross revenue that do qualify. And in case somebody’s watching this and saying, “But my trusted advisor of years told me I didn’t qualify. And who are you? You tell me, maybe I do.” I say, “Don’t believe either of us. Go to the IRS website.” It clearly states the two methods and then it says “either or.” That is the message I want to get out, because this ERC has been the big difference between people continuing in business and prospering or going out of business with a pile of bills they have no idea how they’re going pay.
Chip Franklin:
It’s interesting, Steve, and I don’t know, we’ve been talking to each other for seven, eight years, and I remember you were telling me at one point with small businesses, payroll taxes were an issue that could get you into trouble if you didn’t stay on top of that. But the other thing that’s interesting, because you both, Steve, you’re not a small business per se, because you have a lot of employees and a lot of revenue.
Steve Moskowitz:
I started as a small business.
Chip Franklin:
Right, started. So to me, the biggest fear, and I know this, kind of, Yoseph, reading what you guys do, made me think, the financials. So you can be a service-oriented business, but then you decide to take on some capital, and then you try to track the money coming in from receivables as opposed to what you have to send out. And that can get so confusing and dangerously off the rails if you don’t have a system in place. And how many people find themselves at that point? I know Steve, you probably know a bunch, but Yoseph, is that a really common problem for businesses that they grow?
Yoseph West:
It’s a core issue, right? Most small business owners are relying effectively on their bank balance to determine how much inventory they can buy, right? And that doesn’t include the money that’s coming in, all the bills that are outstanding, the payroll that’s coming up. They’re like, “I’ve got a $100,000 in my bank account. I can spend $80,000 on this inventory or hire this person.” And `that might actually not reflect their true financial picture.
Steve Moskowitz:
And people forget about things like when you’re in business, say, “Oh, I’ve got that $100,000 in the bank account and I can buy this and that.” And they forget, “Well, wait a minute. Did you consider your estimated taxes?””Uh-oh.”
Chip Franklin:
Yeah.
Steve Moskowitz:
And then, it comes time to file the tax return, and the client finds himself like Napoleon, a little short.
Chip Franklin:
Right. That’s funny.
Steve Moskowitz:
And then they can make all kinds of mistakes, like not file the return. That’s a criminal offense. And now, with the new 87,000 IRS agents, they’re going to be chasing people down. The government is threatening criminal prosecution for people. And the bottom line is, all that could be avoided, but people don’t realize it. And it’s like, I don’t know how to do their businesses and they don’t know how to do tax and accounting, so one of the things that we do for a client… And now with so many things online, we can have a client anywhere in the world, and with something as simple as QuickBooks online, we can keep all of their books and then we can say, “Look. Of that $100,000 you have in the bank account, you can spend X any way you want. But y, you have to put another account for the tax people, because if you don’t, you are going to be in trouble.” And you don’t want the IRS agents going to your customers and saying, “Don’t pay you, pay them.”
Chip Franklin:
That’ll put you out of business.
Yoseph West:
Yeah. Just to add on that, one of the core use cases we see… We’re a business banking platform, we’re built to be natively collaborative and to really give financial visibility to these small business owners. One of the things we see really smart business owners do is they create multiple bank accounts on Relay and they have a tax account, a dedicated account, where they’re moving the funds across and they can do it on a percentage basis.
Steve Moskowitz:
That’s exactly what I recommend to clients. And that’s a variation of the old envelope systems. Is anybody…
Chip Franklin:
My mom did that when she was raising five kids on her own. We had envelopes for food. If you wanted to go to the movies, you’d go look in that and there’s nothing in yet. Okay. You just keep hoping that… It was a quarter when I was yay big, right? No, that’s a great. That’s funny.
Steve Moskowitz:
So we do that for clients, too. And it’s something that is so simple and so effective, but like everything else, you have to do it. You have to be disciplined to do it. And the minute you say, “Oh, well I’ll do it next time,” that is the road to ruination.
Chip Franklin:
Yoseph, with people that don’t have a lot of business acumen, and I’m probably one of them, I was looking at your story and the names of the businesses you’ve worked for. Relay, Hubdoc, Veru, Zero, Wave, now H&R Block, I’m looking at that and I’m… We’re a 20-minute drive from Silicon Valley, but they have the same problems that IBM has. Nothing really changes. When you have a turnover of technology, they still have the same problems. Steve, I’m sure half your people are kind of old school and the other half embrace some of the new technology. Do you have-
Steve Moskowitz:
We have people that are really, really, really technically savvy and we also have the shoebox clients.
Chip Franklin:
Yeah. Yoseph, it seems now we’re more international maybe than we were 30 years ago. Does the software and in the process and the approach you guys have, does it have to change because it’s a smaller world today than it was in 1975?
Yoseph West:
I feel like that’s a big question, Chip. I think from my side, technology and significant market shifts just take time, right? So let’s take Zero as an example. Zero is the number one for Cloud accounting outside of North America, right? They’ve built an amazing business out of New Zealand and they were, at one point, a $12 billion company I think, and the market has shifted.
But the narrative there is they own Australia and New Zealand, and the market share that they have is like 10%, right?
Chip Franklin:
Wow.
Yoseph West:
10%.
Chip Franklin:
That’s a lot.
Yoseph West:
After 12 years though, right? And the Cloud revolution is there. The shift to modern technology is there. And so, people love to talk about these high growth Silicon Valley companies, and Relay would fit into that type of category in terms of the speed of growth. But ultimately, it just takes time to make real change in the world. And so, there’s so many small business owners that are adopting new technology and it is not based on age. I can tell you some of our earliest customers were the age of my dad,, and getting in there and I didn’t know until I got on phone with them. I kind of assumed they were younger to be honest.
Chip Franklin:
Steve, do you remember when the first technology first changed for you? When people stopped bringing in a big box and instead started sending you an email or bringing over a thumb drive?
Steve Moskowitz:
Yes. And here’s one of the super benefits from technology. It frees up the business owner from doing humdrum chores that take a lot of time, that the automation, the technology can do it, and then he or she can run the business and they can make more money that way and keep track of things.
And what I’d also say about technology, there’s been a big upswing because of Covid, because what happened was all of a sudden, people were in their homes and they’re not being able to walk into somebody’s office, and all of a sudden people were forced to use technology and learn it. And if they couldn’t, that meant the end for them. So the bottom line is Covid has greatly sped up, and you better keep pace, because if you don’t, you’re going to get trampled. And that’s the way business is. It’s competitive and you have to do that. And if your competitor is using technology, they’re going to be better with pricing and better with delivery and better with everything. And that can put you right out of business.
Chip Franklin:
May I ask you guys a question, both of you? When I was 16, I worked as a teller in the drive-through. And I’d take my guitar out there and I’d be playing and just having a good old time. And the banks, when I was a kid, didn’t open until 10,:00 they closed at 2:00. I went up to the bank. I changed banks, I moved a lot of funds from one bank to another. And I went there and it was like I felt like I was at Chuck E. Cheese when I walked in the bank. It didn’t have the same feel. Are we going to have banks in 10, 15 years? Either one of you guys? What do you think?
Yoseph West:
I think we’ll definitely have banks. I think the question of bank branches.
Chip Franklin:
Just the branches.
Yoseph West:
Yeah. Yeah. So one of the pieces of feedback we get from customers is, “Hey, I just want to be able to go to a branch and talk to someone,” as though that’s a high level of quality customer service, which generally, I think we’ve all experienced it. I have a traditional bank in my life, and it’s not necessarily a positive experience every time. They’re perfectly good people, working hard, but it’s taking time out of my day.
And I think one of the big shifts is, “How much can I do for my phone? And what can I replace the branch visit with?” Can it be that I can actually call someone and they’re going to be helpful and they’re going to be able to see all my information? I’m not going to have to go department to department or work through a phone tree just to be able to get access to the right people for the right product and the right service. Would that be better? And how much of the branch kind of exists because people feel the need to go there and stand there until the problem is solved. And customer service actually isn’t world class, which is what I think it should be for this industry.
Steve Moskowitz:
My prediction is the banks will remain, but it’s like offices. After Covid, a lot of companies have offices but they’re much smaller because not everybody comes in, not everybody comes in every day. So you still have an office, but it’s much smaller. And that’s what I would say.
For example, with an awful lot of people, business people used to go to the bank every day, make a deposit, do all kinds of things. Well now, with people paying online, there’s no reason to go in, and even if somebody gives you a paper check, you can take your phone and take a picture of it and deposit it. And why walk over to the bank or drive over to the bank, stand in line, when you can do all that from the safety and security of your home or your business? So it’s going to be just like the offices. Yes, you can still come in, but it’s going to be more the exceptional visit to take care of something that’s not routine. And that, just like an office, really needs a much smaller space than the old traditional one did.
Yoseph West:
Right.
Chip Franklin:
Yeah. Well Yoseph, please come back. This was great. I love watching Steve. I can always tell, Steve, when it’s something that is animated to him. And this is, because I bet, Steve, if you haven’t already, you have clients that you’ve never met. And that’s…
Steve Moskowitz:
That’s a big difference in practice. In the old days, everybody came in the office, you shook hands, people handed you physical paper. Now, especially since Covid, Covid just changed things so much, on the same day we were all not allowed to meet anymore. So we all had to retire to our homes. And then, the IRS still exists. IRS even has plans for if there’s a nuclear war, how to collect taxes. So the bottom line is they still exist.
Chip Franklin:
Of course, they do.
Steve Moskowitz:
So the bottom line is, yes, I have a lot of clients that I’ve just talked to on the phone, but with Zoom, we can see each other. And Zoom makes a big difference, being able to see somebody. And then with the Zoom, you can share a screen, show things to each other.
And with the existing clients that I’ve had for many years, I took a little informal survey and I said, “So how do you like it?” And what most of the clients said, “You know, Steve?” They really like the remote better because the time they would take driving, they can be at home. And one of the clients, I met with him about 5:00 in the afternoon, and I asked him. He laughed at me and he said, “Steve, my home is an hour and a half from your office. Before, if I was leaving, I’d have to drive for an hour and a half. Now I’m going to hang up and I’m going to have dinner. I’ll be finished dinner long before I would have gotten home.” He never wants to come back in. He’ll be a client for a lifetime. And most of the people that I’ve spoken to said, “No.” They don’t want to come in, not to mention things like traffic and parking, and in some cities there’s some political problems that people want to avoid.
Chip Franklin:
And Steve, who knows, maybe the next time we have Yoseph on, it’ll be an Android. It’ll be IA. We’ll say, “Yoseph, you look great.” And it’s…
Yoseph West:
“Thanks for having me.”
Steve Moskowitz:
No, but I bet you next time we’re going to do Zoom again instead of physically coming in.
Yoseph West:
Right.
Steve Moskowitz:
And that’s also the travel time, even commuting. I live in this city and my office is in the Financial District. Physically, it’s only six miles from my house to the office, but during rush hour it would take me an hour.
Chip Franklin:
Yeah, that’s insane.
Steve Moskowitz:
You know what? Now when I work remotely, I spend that hour instead of driving, working with clients. So all of a sudden, magically that put two extra hours into my day. Huge.
Chip Franklin:
Well, Yoseph, be in touch. Thank you so much for coming on our show-
Yoseph West:
Thanks for having me.
Chip Franklin:
… and Practical Tax. Please come back and join us again, okay?
Yoseph West:
Thanks. Happy Friday.
Chip Franklin:
All right. Bye. That’s it for another edition of Practical Tax. You can find us by going on YouTube and putting in Practical Tax or go to Moscowitzllp.com. Until next time, for tax attorney Steve Moscowitz, I’m Chip Franklin. See you then.
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.