Attention: This is a machine-generated transcript. As such, there may be spelling, grammar, and accuracy errors throughout. Thank you for your understanding!
David Leary: [00:00:04] So Trump wants to give DOGE the savings, all this massive savings that DOGE is supposedly maybe, maybe not. Saving taxpayers wants to give it back and they want to pay it out. They're calling it the DOGE dividend, and it'd be about a $5,000 refund check. And the concept is they give 20% of the savings to the American citizens, and 20% goes down to paying down the debt. I don't know where the other 60% goes. Coming to you weekly from the OnPay Recording Studio.
Blake Oliver: [00:00:34] Hello and welcome back to the Accounting Podcast. The number one podcast for accountants in the world. Your weekly roundup in the accounting profession. I'm Blake Oliver.
David Leary: [00:00:44] And I'm David Leary and Blake. Last week I think our episode was titled What DOGE Chaos? Yes, there was just a lot of chaos of DOGE. Well, that's resulted in now us having feedback email chaos from listeners.
Blake Oliver: [00:00:57] We definitely struck a nerve.
David Leary: [00:01:00] And it's all over the board. Some of it is they're accusing both of us about being uninformed about, you know, the distribution of the federal funds. And they're very specific about some things. Some of it is people are mad at you, Blake, that you don't let me have my opinion. Apparently you just steamroll me, which I don't. I think you've done once on the podcast. It was a bunch of episodes when you cornered me into admitting who I voted for or something a while back. Um, but people are very upset. And some of these emails, when you read them, they're very soundbite based, right? Yes. They're they're arguing against your soundbites with other soundbites they may have heard. And that's just where we're all at. We're all in this soundbite wars.
Blake Oliver: [00:01:39] And I feel like a lot of times it's it's it's not actually stuff we said. It's stuff that, that is it's like talking points that we, we alluded to or we discussed, but are not necessarily our opinions. Um, and so I do, but but I understand the confusion and I do want to apologize. Not because I'm wrong, but but because I want to apologize to our listeners because I. I was out of order. I didn't explain myself properly. And I gave an opinion at the beginning of the show, and we spent the whole show talking about an opinion, but I didn't really establish it. I forgot to share the story that set this whole thing off for me, and I've been following this for a long time. Honestly, I've been following the the federal debt since I was in in high school. As a as a young Republican. It's always been an issue for me that I've been very passionate about. And maybe that's why I got into accounting is because balance sheets are important. And I've always thought that government spending was a problem. Um, and it's gotten worse and worse and worse. So I want to explain that I want to share that story. And then hopefully, you know, you can agree or disagree with my conclusion, but I want to at least explain why I, I, I think that DOGE. What DOGE is doing is important, even if their methods are distasteful. And then I also want to apologize to you, David, because I do feel like sometimes when I get excited, I steamroll you and I dominate the conversation. If we add it up, who talks on this show? It's probably a lot of me and not as much of you.
David Leary: [00:03:17] Only one time I've ever felt like you caught me off guard. You, like, brought a story to the show, and you just wanted me to have an opinion on it. And you just cornered me at one time out of 400 episodes. It's not that. But one time you did get me. Yeah.
Blake Oliver: [00:03:28] You are a very agreeable David. And I think that's what makes us good business partners is because I can be kind of a jerk, and you just. You're great about it, you know? So, like. Thank you. And I'm just.
David Leary: [00:03:41] I got ten years more of age on you. I've just seen these dynamic things in our country. These pendulums swing and, you know, things kind of. They change a lot, but they always swing back. Right. And we can talk about that when we talk about some of the IRS layoffs and things like that that are happening.
Blake Oliver: [00:03:56] The more DOGE news, right? And I promise to this is not going to be an episode just about DOGE again, because there's actually so much other news in the profession that we didn't get to. Last week, we need to get to.
David Leary: [00:04:06] Actually, I just came to me like, I would like an apology. I was implying that possibly the reason people are scared about DOGE visiting the IRS is that it would result in layoffs. And then Saturday I turned on my TV. I think I texted you, they said 15,000 layoffs are coming. And then I think officially this week, it's like 6000 to 7000 have been laid off from the IRS. Yeah. So that's this has happened. There's a pattern here. DOGE visits. Their layoffs happen the next week. So that's that's apologize for that. You thought.
Blake Oliver: [00:04:33] Oh, because I thought it was.
David Leary: [00:04:33] A little a little.
Blake Oliver: [00:04:34] Bit. I said it was not a big deal that they were going to look.
David Leary: [00:04:36] Just to visit.
Blake Oliver: [00:04:37] Yeah, I guess the DOGE employee coming to your department is sort of like the Grim Reaper arriving at the front door.
David Leary: [00:04:44] Um, well, welcome our our.
Blake Oliver: [00:04:46] Our welcome, our live stream. Viewers. Hello? Boring accountant. Three, three coffee emojis. This morning I'm on my second Anthony welcome nightlight. Hello. Great to see you as well. Feel free to let us know what you think on YouTube. Follow us on YouTube, subscribe The Accounting Podcast on YouTube. Hit that notification button and hit that bell icon. We never go live at the same time, but maybe you'll catch us one of these days. We're going to try to figure that out.
David Leary: [00:05:13] That's a piece of email we got this week. People wanted us to have a consistent approach on our date and time. It's just hard. We're both busy. It's always hard to lock down our schedules, but one day we'll get there one day.
Blake Oliver: [00:05:26] And let's go ahead and, uh, thank our sponsors, David.
David Leary: [00:05:30] So our sponsors, three sponsors this week we have Onpay, CPA, com and Bluevine. So stay tuned for those ads in the episode.
Blake Oliver: [00:05:37] Welcome, Jacob. Jacob is saying that David is much quieter than Blake today. Makes it easier to feel like he is steamrolled as well. So I just took a.
David Leary: [00:05:45] Bunch of updates from my microphone, is it not? The settings aren't.
Blake Oliver: [00:05:48] Good. I mean, maybe you just have to, like, speak up. Maybe I'm. Maybe I'm projecting right now. I don't know, but we'll we'll try to sort that out.
David Leary: [00:05:56] Jacob. Yes.
Blake Oliver: [00:05:57] Wonderful. All right. Um, we'll fix that in post-production. Okay. So so I want to explain myself. Okay. Briefly on this DOGE thing, if you listen to the last episode, you know, basically what I tried to say, the opinion that I tried to express is that while I may not love, uh, Elon Musk's methods, I do think it is really important to cut government spending. And the reason is that, um, the Gao, the Government Accountability Office, this is the department of the government that puts together projections on the deficit, on the budget. You know, this is the government itself reporting on itself. Their annual report on the nation's fiscal health came out this month, and it highlights the urgent need for action from Congress and the administration to address the federal government's unsustainable long term fiscal trajectory. This was a report that was put together by the Gao under the Biden administration. This is not a Trump report. The Gao projects that without changes to fiscal policy, public debt will reach unprecedented levels by 2027 and will be double the size of the US economy by 2047. Public debt.
Blake Oliver: [00:07:19] The US debt federal debt will be double the size of the US economy by 2047. So we're already over 100% we hit that milestone. Um, I don't know what it is. Exactly 118%, I think, is the number that I remember. We are headed toward double the size of the federal government. Federal government expenditures has grown and grown and grown over the last few years. Um, revenue is insufficient, right? We have a deficit. And the problem here is that our interest payments are getting out of control. It's like a family that has been buying stuff, trips to many credit cards, on credit cards, and now the credit card payments are becoming a significant portion of their income. In 24, the federal government spent $882 billion on net interest payments. That is more than what we spent on national defense or Medicare. So more than the military we spent on interest payments, just the interest payments. So that's not even paying down the principal. That is just the interest payments. This number has more than tripled since 2017 and is estimated to exceed 1,000,000,000,000 in 2025 this year.
David Leary: [00:08:35] And these interest payments, in theory, are relatively low. It's not like somebody has a credit card. They're paying 1,718% interest. This is, uh, the bonds that US cells. Right. Yeah. Yeah. So it's relatively small in the grand scheme.
Blake Oliver: [00:08:48] It's whatever the the fed sets it at. Yeah. So these are you know, so when you know, this is where I have my money right now, this is where a lot of us have our money. Right. If you don't want to put it in the stock market, you buy government bonds. And and that's the rate. It's like 4 or 5, whatever it is. Right? I forget what it is right now.
David Leary: [00:09:05] It might be I think it for a little while there it creeped up to 6 or 7%. But I think yeah, it's historically it's always been three, 4% somewhere in there. So the crazy returns.
Blake Oliver: [00:09:13] Right. And so, you know, if you think about it this way, right. We are going to have close to $1 trillion in debt payments this year. Our tax revenue is $5.5 trillion estimated for 2025. So we're talking about debt payments that are like 20 getting to 20% of our tax revenue. So imagine if you are a business or imagine if you are a family, if you have debt payments that are like 20% of your take home income. Um, that's starting to get unsustainable. It's going to be like 35%. And, you know, like a mortgage lender will not loan to you at that point, right? I think the rule of thumb is like 35% of, of, of your income can be debt payments, but that includes your mortgage and all your other debt payments, too. So what does that mean? It means that basically once you have too much debt as a country, it's going to be really hard to borrow more money and you have to start paying it down. So the cuts are coming. The question is, do they come now or do they come later when it's even more painful and countries can end up in these debt spirals where because, you know, the economy or investors no longer believe that you will actually pay back your debt, that you will eventually default on it, that interest goes even higher. And so then your interest payments become even more unsustainable and then it becomes.
David Leary: [00:10:43] A doom loop. Maybe 15 or 16 years ago.
Blake Oliver: [00:10:46] Exactly, exactly. So this is an existential crisis for the United States. The the one that nobody seems to be paying attention to, but is actually the biggest problem. So, you know, if you are not a Trump fan and you are of the belief that, like Trump will lead to the end of democracy, I'm here to tell you that actually it's our debt that is more likely to lead to the collapse of our political system than one president. So, you know, that's where I'm coming from. I'm looking at this big picture, and that is why I'm happy to see something being done by it, done about it. And, you know, the methods are distasteful. I've been you know, people have been sending me stories of like, the, the horrible things that are happening because countries are no longer getting the US aid payments, like medications for kids in Africa and people starving and like it's terrible. I'm sorry. Yes, it's horrible, but this is coming now or in the future. But it's going to be worse in the future. So we as accountants, I feel like, are actually well positioned to take the long view and, um, look dispassionately at the problem and be able to do something about it. You know, like, it's like when a company has to do layoffs, it sucks. It's terrible. Right? But somebody has to do it. Somebody has to say, we need to fire 15% of the workforce in order for this company to survive. And you know, who usually is the the folks who have to do it to say that it's the CFO, it's the accountants, and they get.
David Leary: [00:12:24] Blamed for it. The bean counters. Right.
Blake Oliver: [00:12:26] I'm sorry if you don't like the news, but, you know, I didn't create this situation. I'm just I'm just reporting on it. So I hope that helps to explain where I'm coming from. You know, I'm not a trumpster. I didn't vote for him. But I am a Republican and I've always felt that it's it's this is a growing problem over the course of my entire life, and we have to address it. And unfortunately, Biden didn't and the Democrats haven't. So like, this is this is what you get. This has been building.
David Leary: [00:12:59] For decades, decades and decades, though. This is just happen. No.
Blake Oliver: [00:13:04] Exactly. So so what's the what's the saying? Elon Musk, he's not the hero that we want, but he's the hero that we deserve. Um, that's what you get when you don't deal with it. All right. Um, David, shall we do our first ad? Yeah.
David Leary: [00:13:25] Let me jump in there and I'll grab that. Our ad is for on pay. Forbes and CNBC rank on pay number one for small business payroll. On pay really knows how to get payroll done right for every client you serve, no matter how complex their software is, easy to use and backed by outstanding service levels, they handle new client onboarding for free and have experts on call to keep you and your clients on track. The system includes multi-state payroll, local tax filings, integrated HR tools, and more with no hidden fees. When you join on Pace Partner program, you get a custom dashboard to easily manage all clients in one place. Plus, you can gain exclusive perks like revenue sharing or discounts, free payroll for your firm, co-branding opportunities, premium swag, and more. Onpay helps you run your practice efficiently while you while providing exceptional payroll that your clients can count on. To learn more about using Onpay for your firm and clients, that may be farms, start ups, restaurants, bars, doctors, nonprofits, gyms, franchises, or dentists. Head over to The Accounting Podcast dot promo Onpay. That is The Accounting Podcast dot promo forward slash Onpay. Thank you Amy.
Blake Oliver: [00:14:29] David I'm going to I'm going to have your mic. I'm going to set your mic to be like automatic. I think Still.
David Leary: [00:14:34] Not loud enough?
Blake Oliver: [00:14:35] Yeah, I'm setting automatic adjustment on your microphone. Hopefully that helps everyone. Let us know if David is still too quiet. Um, cool. I'm reading through the comments here. Let's see. Boring accountant says I forgive you, Blake. Oh. Thank you. It's nice. Forgiveness is nice. Feels good. Uh, Rahul wants to know our opinion on the recent layoffs and its impact on the job market. So I think this will be interesting when we discuss the IRS layoffs. Because we know that we have a talent shortage. And this is one of the other arguments for shrinking the size of the federal government is that when you get too many people working for the federal government, it actually draws talent away from private companies, and they need that talent right now. So releasing them into the world to go get jobs in the real economy, not the government funded economy will help stimulate economic growth.
David Leary: [00:15:38] Somebody tweeted at me that ideally I'll be laid off. Irs workers would go get jobs at the accounting firms and will solve our talent crisis. But I just don't know. I don't know if I buy into this theory that I think people who get jobs at the government are a certain personality that want to work for the government. They want to either serve or they like that. Well, previous security you would have if you had a government job, you had a job for life in many cases. And so I do see a lot of those people probably even trying to get government jobs again.
Blake Oliver: [00:16:09] Right.
David Leary: [00:16:10] I don't think so.
Blake Oliver: [00:16:11] And in the industry. Let's do a quick update on boy. The boy reporting deadline has been extended again. A federal district court lifted the nationwide injunction that had halted boy filings following the Supreme Court's decision in related cases. And so now the Financial Crimes Enforcement network, FinCEN, has extended the deadline for most small businesses to file BOE reports to March 21st, 2025. So get ready right in the middle of the busiest part of tax season. All of those BOE reports will be due and that's the update and stay up to date. Stay tuned to this podcast. We'll let you know if it gets canceled again.
David Leary: [00:16:57] So they issued a notice. There's two things. If you've already had your deadline delayed because of disaster relief extensions, that still applies. You don't have to do the March deadline, but they also go on to say in their announcement or notice however you want to their PDF that they published, FinCEN may modify reporting rules. Again, FinCEN is evaluating potential exemptions for low risk, low risk entities, but they haven't provided any details on that. And they also said it will assess options to further modify deadlines while prioritizing prioritizing reporting for those entities that post the most significant national risk. So we might see more deadline changes because they reserve the right to do it, is what they're saying. This may never end. We might be every couple episodes. Hey, there's a new deadline for boy, but at least they're recognizing that there's low risk entities and there's high risk entities, instead of it just being this blanket requirement for all all entities. So that's hope right there. They're coming to their senses on this. Now, the crazy thing is there's a requirement that in theory, Trump and DOGE would look like a home run if they solved it. And they're not addressing this like this is. And now is it wasteful government spending? That's not clear, but it's it's an impact to the economy. We've talked about that on the show before. How many millions of hours are going to be spent either filing the reports or reviewing the reports, or when banks have to request the reports? It's just a lot, I don't know.
Blake Oliver: [00:18:20] Let's talk about Deloitte and Die. This is related to the Trump administration, and we didn't get to it last week. So here it is. Deloitte US has directed employees working on government contracts to remove gender pronouns from their email signatures. This change aligns with emerging practices and requirements for government clients. The firm also announced it will discontinue some diversity, equity and inclusion programs, also known as Dei. They are going to stop setting diversity goals. They're going to stop issuing their annual Dei report and specific Dei programing will end. They are going to continue initiatives such as Heritage Month events, support for internal ethnic networks and inclusion councils. The firm will continue to enhance hiring practices to ensure they are fair and nondiscriminatory. So, David, what do you think about this email pronouns thing?
David Leary: [00:19:17] I could tie it to one of the listener mails. We had one of the listeners, male, male. We got the very first sentence was still think the 150 hour rule is the greatest threat to our profession. And it goes on because it's like the argument is no DOJ's in all the changes of the Trump administration are the biggest danger. But I would argue and and they and it goes on to talk about eliminating die. And I would argue that yes there's you have I'm sorry. What firm was this. Was this Deloitte.
Blake Oliver: [00:19:44] Yeah.
David Leary: [00:19:45] So so Deloitte's getting rid of they're they're they're hiring initiatives. But if people of color and minorities weren't becoming CPAs anyways, it doesn't matter. The bodies weren't there for them to hire. And and I know I've said this on the show, the biggest difference between going to an AICPA event and going to the any event. So any is for enrolled agents is the diversity. It is amazing how diverse an Naia event is. And the big difference between those two certifications, CPA and any event is there's no educational requirements. You just study and pass the test to become an EA. And because of that, there's just tons of diversity. So I do think the 150 hour rule coming down is probably going to have a way bigger effect, a positive effect for diversity in our profession, regardless of what these firms, these bullet points and they're talking about, we're getting rid of Dei and get rid of your email signature and all this stuff. I think just 150 hour rule will offset any of that.
Blake Oliver: [00:20:44] In other words, there are systemic barriers to entry into our profession that prevent minorities from becoming CPAs, from becoming accountants, from working at these big firms. If we get rid of those barriers, that will be much more effective than Dei programs that are in place already at these firms, because we're just not getting the people in there in the first place, and we're not keeping them. Yeah, I suspect.
David Leary: [00:21:09] The Dei programs, the firms are kind of just giving lip service to it because they felt like they had to and they weren't they weren't genuine about it. Maybe that's the way to think about it. And so now it's going away and it's it's scary and it's it's again headline bait here. It's very big headlines. But the real impact I still insist the 150 hour rule. It's so obvious. That was the biggest eye opening experience going to those two conferences within a month and seeing the difference in diversity.
Blake Oliver: [00:21:34] Yeah. Well, we'll talk about 150 because we have news from Virginia. Before we do that, I want to highlight how much money Deloitte makes from US government contracts. Deloitte generates approximately 3 billion annually from US government contracts, and an example would be a $450 million agreement with the US Army for R&D and technology integration. You know, I think DOGE should look into Deloitte's government contracts. We have talked about them on the show before, and the amount of money that these government agencies pay to Big Four consulting arms is like wild. And so, you know, maybe that is a place to look to cut. But that, to me, is exactly why they're removing. That's why Deloitte US is removing the pronouns from the emails. Right? It's because they make so much money from the government. They don't want the Trump administration coming after them. Exactly. They don't want the attention. Yep. They don't want anyone to know and think about just how much taxpayer money is going to them. So let's talk about should we talk about 150 and Virginia. Oh, so.
David Leary: [00:22:46] Virginia and Tennessee. So if you have Virginia I'll catch Tennessee.
Blake Oliver: [00:22:49] Okay. So Virginia, the Virginia House and Senate unanimously passed legislation creating an alternative pathway to obtaining the CPA credential. This initiative was proposed by the Virginia Society of CPAs to address obstacles in the current licensure requirements. Beginning January 1st, 2026, candidates can become licensed by earning a bachelor's degree with required accounting coursework and gaining two years of relevant work experience and passing the CPA exam. So bachelor's degree, two years of experience. Cpa exam. They can also get a master's, and they can have that accounting concentration and do one year of experience and get their CPA. And the traditional 150 hours of education route is still an option. So there's actually three pathways now it's starting.
David Leary: [00:23:46] To feel like all these state societies may have been looting together to introduce very similar bills. Tennessee CPAs. They've introduced their new House bill, and they have two pathways. One is a bachelor's or master's degree with 150 hours of credit. So 150 hours still with one year of work experience. And pathway two is 120 hours college education with an accounting concentration and two years of relevant accounting work. So all these states are coming out with basically the same two pathways. So I'm wondering Maybe one day we'll hear a story of how this happened. And it could just be because this is what this makes sense. And they're all it's just obvious. Like this makes sense. This is fair. Let's all do this. But I'm just and we're going to get the story one day. But the timing of this and how they're all aligned is pretty amazing to me. State after state, these dominoes keep falling.
Blake Oliver: [00:24:35] Minnesota, which was the first to introduce a bill that didn't get passed because they ran out of time. They have a bill back in the Minnesota legislature in the Senate there. Same thing. Bachelor's degree, two years of experience or a master's degree one year of experience. Now, what's interesting about the Virginia bill is that they also included provisions for automatic mobility. And this is key as the states change their requirements, it's really important because they aren't exactly the same. It wasn't possible because AICPA and Nasba did not lead on this issue. There was no, uh, exact wording for the states to use, so they all did something a little different. They have different education requirements in Ohio. The number of classes you have to take for that accounting concentration is in the bill. But in Virginia it's left up to the Board of Accountancy. So there might be slightly differing education requirements, that sort of thing. And so automatic mobility is really important. And what this does in Virginia is it allows anyone who is a CPA in good standing in another state to practice in Virginia without having to register, without having to prove anything. They can serve Virginia clients. If they move to Virginia, then they have to get licensed in Virginia in order to work in Virginia. It's as long as you're out of the state, you know, your place of work is, I don't know, nearby North Carolina. You can practice in Virginia, and it's.
David Leary: [00:26:11] Almost exact same language from Tennessee, hold a valid CPA license in good standing from another state, and if at the time of licensure showed evidence of passing the uniform CPA exam. So the. There's too much almost identical language being used in all these bills where I don't think it's just dumb luck. I think the states bypassed the CPA, got together and they colluded. Maybe sometimes collusion is good.
Blake Oliver: [00:26:37] You know, and I believe that if enough states adopt these rules, if they allow for just a bachelor's degree, this is going to have a bigger impact on diversity in the accounting profession than any Dei program in an accounting firm, because MIT Sloan did a study that found that the number of minority students, like certain minority groups, I think it was black and Hispanic, uh, CPAs was decreased by like 25% because of the 150 hour rule, because that fifth year of education that, you know, additional like one year master's degree and the year of not working is actually very expensive. And so people who are on a budget, who don't have a lot of money to, to spend on school, uh, choose other majors. So this could have a significant impact. Um, it led to a 14% overall decline in the number of CPAs as well. That is not huge, but it's also material. 14% is a lot. And we could use those extra bodies right now. Is it the only thing we need to do? No. We've got to work on the salaries. We've got to work on the work life balance, the hours, that sort of thing. But this is, I think, a great start. So very exciting to see. All right, David, where do we go next? Um, we.
David Leary: [00:27:52] Can swing back to those again. So Trump wants to give the DOGE savings back to the public.
Blake Oliver: [00:27:58] So before you read that story, let's go ahead and do our second sponsor message. So our second this one our second sponsor is CPA. Com have you ever tried to get the perfect web domain for your firm, only to find out it's already taken? Or worse, worried about phishing scams that could put your clients at risk? That's why CPA. Com offers CPA domains exclusive to the accounting profession. Not only does a CPA domain boost your credibility and branding, but it also helps protect your firm from online fraudsters who try to mimic your website to steal client information. Because unlike a regular Com domain, only verified accountants can register a CPA domain, making it a more secure and trusted option. Beyond security, a CPA domain also helps you stand out with a professional, shorter and more memorable web address that instantly boosts your firm's credibility. And here's the best part you also get a free professional starter website that you can set up in just minutes. So if you're ready to make your firm's online presence stronger, safer, and more professional, now is the time to act. Claim your CPA domain today and get 20% off with the code. Tap 25. That's tap 25. Head over to The Accounting Podcast dot promo slash CPA. That's The Accounting Podcast promo slash CPA.
David Leary: [00:29:13] I think Blake is you're allowed to go get one. Maybe you could go get us The Accounting Podcast dot CPA and we'll we could record it or use it. It would be kind of fun. It could be our email addresses.
Blake Oliver: [00:29:22] I'll work on it. Um, okay. So you were about to talk about the DOGE.
David Leary: [00:29:29] The DOGE dividend for lack of a. That's the.
Blake Oliver: [00:29:31] Oh, and and let's also make sure we get those IRS layoffs on there.
David Leary: [00:29:35] Yep.
Blake Oliver: [00:29:35] Uh, so I'll take that one. You go first. Yeah.
David Leary: [00:29:37] So Trump wants to give DOGE the savings, all this massive savings that DOGE is supposedly maybe, maybe not. Saving taxpayers wants to give it back and they want to pay it out. They're calling it the DOGE dividend, and it'll be about a $5,000 refund check. And the concept is they give 20% of the savings to the American citizens, and 20% goes down to paying down the debt. I don't know where the other 60% goes, but that's that's the concept. It wasn't really addressed. The other 60%, I guess it just goes away because we're not spending it and it just doesn't happen. So it'll be a $5,000 tax refund check. Now, now, didn't we just do this during Covid? We just sent about $5,000 a person. It was like 1200 bucks here, 1700 bucks here. It added up to about 5000 a person. And then it caused massive inflation in this country. Yeah, yeah. Is this just not a good idea?
Blake Oliver: [00:30:28] Well like so this is this is, uh, what my friends and family have been saying. It's it's like, you know, that all the DOGE savings, they're just going to go the Republicans in Congress are just going to pass tax cuts. So the money is not actually going to get saved. We're still going to be adding to the debt. We're still going to be, um, you know, building this unsustainable path. And I mean, I get it it feels it feels like we're not going to solve the problem. But like, that argument also has been used to not do anything about the problem for 20 years. So. Right.
David Leary: [00:31:08] Yeah. If you think about this as an experiment, we're going to find out. We pulled there's a lot of levers being pulled and there will be a result of all these actions. We just don't know what it's going to be good or bad yet.
Blake Oliver: [00:31:19] Yeah. So I guess what I'm trying, you know, what it seems like is that we're going to have the Republicans are going to cut the size of the federal government, but then they're not actually going to use that savings to reduce the deficit. They're going to pass tax cuts and give give the money back to taxpayers, which is then going to set up the Democrats to have to be the ones who raise taxes. Maybe that's what it's going to be. Um, actually, I saw a really interesting stat in CPA Practice Advisor. Uh, no, it wasn't it wasn't in CPA Practice Advisor. It's about Social Security. I wish I could find it. Basically, There is a survey show, there is surprisingly broad support among the American people to raising taxes. But for one specific purpose it is to ensure the solvency of Social Security. So if Trump wanted to, he could raise taxes, raise payroll taxes to keep Social Security solvent, and Medicare too. Or he could just.
David Leary: [00:32:29] Take all the DOGE dividends and just put that into Social Security. Then everybody will eventually get it.
Blake Oliver: [00:32:34] Well, that's not how the system the system is supposed to be self-funding, right? Like it funds off the payroll taxes. That's why when you talk about government spending, you have to exclude Social Security and Medicare from this whole thing, because those programs can be funded by payroll taxes. And all you have to do to save them is to just increase payroll taxes, which I believe is inevitable because we have less workers.
David Leary: [00:32:57] We have less people.
Blake Oliver: [00:32:58] Fewer and fewer and fewer workers, and more and more retirees who are going to vote to preserve the benefits for themselves. This is also why I, I, you know, when it comes to that Roth versus traditional 401 (K) debate, I say there's a lot of factors that is difficult to project that far out when you're, say, in your 30s or 40s. But I'm just thinking to myself, taxes are going to have to go up.
David Leary: [00:33:23] There's no option, right?
Blake Oliver: [00:33:24] Taxes are going to have to go up to pay for Social Security and Medicare and fund them, because they are very popular and nobody wants to see those programs be cut. So that's going to ensure tax increases at some point. And then if we don't deal with the other discretionary spending and defense spending, then taxes are going to have to go up. Income taxes are going to have to go up to pay for that eventually. So it's just a matter of time until taxes are way higher than they are now. That's that's my like long term sort.
David Leary: [00:33:57] Of the rules around a Roth at any time and then make it taxable and then.
Blake Oliver: [00:34:00] Oh, but that would be incredibly unpopular. So that I don't think that would happen. Right. Like to to promise people like this money gets to grow tax free and people have like invested it 20 years ago and now they're going to take it out and you're going to double tax it. No, that that's not going to fly. Not with not with, uh, people who have money and contribute to politics and tend to vote and are at the age when they have the time and money to do it. That's true. So, so I don't think that's going to happen. I mean, maybe if there was like a crisis, like our economy collapse because, you know, our debt became unsustainable, then. Yeah, maybe then it would happen. So we have an interest here, people, uh, accountants have an interest in preserving the, you know, global economic empire that is America, uh, by not allowing this debt to get too crazy. But let's get back on topic.
David Leary: [00:34:53] Irs layoffs, IRS layoffs. So it was yesterday, one week after DOGE visited the IRS. They've now they're estimating between 6000 and 7000 employees have been laid off. Approximately about 3500 were prohibition or probationary hires from the small business and self-employed divisions, and about 5000 were in the enforcement and collection areas. Now that adds that's like 8500. So who knows what the real numbers here, because it's 5000 here and about 35 over here. That's not so sorry.
Blake Oliver: [00:35:27] Just to go over it one more time. Where were they working.
David Leary: [00:35:29] So about 3500 were from the Small Business Self-employed division, and about 5000 were from the enforcement and collection areas of the IRS.
Blake Oliver: [00:35:39] Okay.
Speaker3: [00:35:39] So so most of.
Blake Oliver: [00:35:41] It's the enforcement.
David Leary: [00:35:43] Most of it's the enforcement. And it's about 7% of the IRS workforce, which they're saying is approximately 100,000 employees now.
Speaker3: [00:35:50] Okay. Um.
David Leary: [00:35:52] I feel like we've seen this movie, Blake. We've seen it since Reagan. Every for the last 40 years, the IRS has slowly been defunded. And what's happened is and we've had these graphs and we showed this on the show. Poor people get audited. More rich people get audited less as this trend has happened. So if you want your Trump and I'll just take this side Trump and his rich billionaire cronies. Right. He can't go and tell the IRS audit my rich crony billionaire friends. Less that that'll never fly. But if you lay off a bunch of people, it'll naturally happen. There just won't be enough talent and bodies left to do these hard, complex audits of the rich. They'll just completely audit the poor. So. So we've already seen this movie. It's just going to get worse. The only way it's going to be better is I've already seen some accountants talking how their clients believe the IRS is going to go away completely, and they don't want them to file taxes. So the only way we're going to be able to handle we'll have if lots and lots of Trump believers believe the IRS is going away. They don't file taxes temporarily. We'll build to handle the volume, but it will be staffed right at the IRS. But our country and pendulum swing in our country, and eventually people will fund the IRS and they're going to go after all these people that don't file. But we're going to see mass. I predict we'll see massive amounts of people not filed this year because they truly believe the IRS is going away. This is just the start of it.
Blake Oliver: [00:37:18] Yeah, I mean, that's not going to happen. So I mean, okay, let me play uh, let me take the other side of this. Right. So audit rates are already so low that if you lay off 5000 enforcers, auditors in the enforcement division, it's not going to make a difference. Your chance of getting audited is like less than 1%.
David Leary: [00:37:46] It's even lower than that, I think. Right.
Speaker3: [00:37:48] We've talked about it.
Blake Oliver: [00:37:48] It's a fraction of a percent.
Speaker3: [00:37:50] Unless you're low.
Blake Oliver: [00:37:51] On money, you make.
Speaker3: [00:37:52] Right?
David Leary: [00:37:52] And you're doing like an employee. Uh, the child care or the.
Speaker3: [00:37:56] Child tax credit?
David Leary: [00:37:57] Tax credit. Right.
Speaker3: [00:37:58] Well, because there's some.
Blake Oliver: [00:37:59] Stuff that's easy to audit, like with technology. Yes. You know, to send out automatic notices like there's a mismatch, all this stuff. Right? That's easy. But, um, and you can just throw bodies at that really easily. Like new people who don't know anything. It's not hard to do, but like these big, complex audits. Um, but, you know, even just like small businesses, right? For instance, the audit rate on S Corp is just incredibly low. I don't remember what it is, but it's like that's why, you know, I think that's why we actually have so much tax misinformation out there on social media. It's because you can do these, uh, what do you call them? Myths. You can, you can you can use these tax strategies that are wrong, that people like Jasmine Delucci are out there disproving. But you can do them and you can do them for a long time and probably will never get caught.
Speaker3: [00:38:53] Just because you're.
David Leary: [00:38:54] Doing them and you have not been audited does not mean.
Speaker3: [00:38:57] They're legal. They're legal.
Blake Oliver: [00:38:59] Yes, but the fact that they are not getting like very few people actually get caught means that people keep doing it and they assume that because, hey, here's all these other people doing this, it must be okay. And then my ethical EA or CPA is telling me I can't do this. It puts us in a really tough position when there aren't enough audits going on. But I don't know, you know, I used to believe that the solution was to throw more people at the problem, but I'm not so sure that is the solution anymore. I feel like if you actually wanted compliance, given the scope of the problem, the solution would be to use more technology to do these audits. And if you look at the progress of AI over the past few years and where it is headed in just a few years in. Maybe it's more than that, but we're talking like a time horizon of like a decade. It's going to be possible to do complex audits with artificial intelligence if you have the data in the right format, in the right systems to do this. And that could catch a lot of this fraud that's going on, this tax evasion. And so maybe the solution isn't hiring thousands and thousands of enforcers. It's it's actually hiring hundreds of tech people to create the AI enforcement.
Speaker3: [00:40:29] And if you think.
David Leary: [00:40:30] About a business, a lot of times when a business does layoffs, it's not because they want and maybe it is, but sometimes but it's not because they want to save this money and then turn it over to shareholders. It's because they have to shift resources. We have this old business unit over here that is no longer working for us. Now we need to shift resources into this upcoming business unit over here. And there's no indication of that happening with DOGE, right? With these are just layoffs. Look at the victory. Look at all the money we're saving. There's not like, hey, we're going to take this money and reinvest it into technology for the IRS to be more efficient, to make these collections. It's really the hammer is through these bodies we got rid of. And another take I have on this is getting rid of a bunch of probationary employees. Doesn't fix the deep state like that was the promise of Trump. I'm going to get rid of the deep state, and he's cutting like the people that just got jobs there last week. Give me a break there.
Speaker3: [00:41:21] Remember, this is this.
Blake Oliver: [00:41:22] Is what month one.
Speaker3: [00:41:24] Yeah there's if.
Blake Oliver: [00:41:25] You if you're worried now just wait. It's coming. There's more that could be coming right. Yeah. Um, and.
Speaker3: [00:41:33] You.
Blake Oliver: [00:41:33] Know, here's what I'll say about Musk, right? Love him or hate him, the guy has, uh, an unbelievable ability to build incredible companies, and we've got Tesla and SpaceX as fantastic examples. And of innovation and incredible products. And he also, you know, through his most of his wealth is in the stock of those companies. And those companies also, especially SpaceX, have deep relationships with the federal government. And Musk, um, you know, he told us, I don't know if it was him. He he tells a story on a podcast about how, you know, like the regulations that his companies have to face. Right. Because he's got a car company and a rocket company are just are just ridiculous. Like, for instance, um, in order to get approval to launch a rocket at SpaceX.
Speaker3: [00:42:26] Yeah. You heard this story. Yeah, they.
Blake Oliver: [00:42:29] They had to prove that the the sound of the rocket engines would not cause, um, hearing damage to seals. And so they had to capture a seal and put it in a lab and play the sound of rockets firing on headphones. They had to kidnap a seal and do this. And then the regulator, the federal regulator, decided they had to do it again. So they had to kidnap a seal a second time and put headphones on it in a lab to prove that the sound of the rockets would not disturb the seal, and the seal had no problem with the rocket noise. Right? That's just one tiny example of the insanity of of regulation. So, like, I get why he is is going in there and just cutting. I understand this frustration, right? He's like, he's on a he is just fed up with it. And now he's got political.
David Leary: [00:43:24] I think I've heard him talk about it took longer to get a permit to launch the rocket than to build the rocket.
Speaker3: [00:43:28] Exactly. Yeah.
Blake Oliver: [00:43:30] And I think anybody who has worked with clients who are trying to, like, build businesses and, you know, like, like the the regulatory state is truly depressing and and and it really can limit economic growth just by creating all these burdens. I mean, beneficial ownership information reporting is just one example, one tiny example. And it costs it's going to cost hundreds of millions of dollars per year in terms of people's time and money to do it. And it doesn't like it's not going to help. It's not going to do anything to combat financial crime, because the criminals are not going to report. So or they're going to report information that isn't true. And there's no way FinCEN is ever going to figure this out. So, you know, I get it. Like and that's not to say he's a good person. It's just to say I understand the feeling. Um, and I think we could all use with a little less regulation these days in certain areas.
David Leary: [00:44:38] So can I get your $0.02 on something that's somewhat related to DOGE? A friend of the show, Kelly Phillips Erb, in her Forbes column, talks about DOGE access to the IRS data and arguably that it should be restricted because of 6301 of the tax code, section 6301. And just a reminder, 6301 prohibits federal employees from sharing tax returns tax information with third parties. It also means discussions about returns. Simple. Whether or not somebody has filed a return or not is prohibited. And this goes back to when those returns were stolen and leaked to ProPublica. Right. It's not okay that tax returns get out there. So I feel like in the past, if my memory serves me correct, remember that one of your biggest beefs with Bot Keeper was they were sharing taxpayer information and the accounting firms didn't know it. Right. It was going overseas. So where do you fall in on this as far as DOJ's access to this taxpayer data, that all of our listeners have very strict compliance requirements over like where is your $0.02 on this? Where is it okay for these third party kids, the DOGE kids to come in? The DOGE bros.
Blake Oliver: [00:45:44] Well, they're not third parties. They are a office within the white House. So my view is Trump, whether you like him or not, he's the president. And so he has he has constitutional authority to do certain things. The federal government works for the president. That's how it's supposed to work, right? He's the commander in chief of the armed forces. And he's, I don't know, the boss. He's the CEO of the federal government. So if he has an office in the white House called DOGE, and he empowers the people who work for him to go and get information, I don't see why it should be up to bureaucrats working at the IRS or the Social Security Administration to decide what information the president can and cannot see. To me, that is the that's like a deep state kind of situation where they get to decide if the president has access to this information or how. I mean, if the president himself walked into the building, I think they would have to give him access, right?
Speaker3: [00:46:44] Yeah, I would probably agree with that.
Blake Oliver: [00:46:46] So here's my point is that if you don't want the president and the president's agents having access to this information, then maybe the federal government shouldn't be collecting it.
David Leary: [00:46:56] Or change the law.
Speaker3: [00:46:57] Or change the law or change the law. Right. But like.
Blake Oliver: [00:47:00] This is and, you know, I guess we'll see. We'll see if the courts go along with, like, the structure of this office, this department of governmental efficiency. Maybe they'll say no, but I find a hard time like believing that they would, because the executive really has broad authority to run the federal government. And I don't know if we want to hamper it that way. I mean, basically, how how is the president going to get anything done if the people working for him don't have to listen?
David Leary: [00:47:32] So to some extent, what works Legislator passes. The legislature passes a law, and then the executive branch goes and executes it. And they need some freedom to get to the finish line of that law, because the legislative branch doesn't tell them how to do it. In many cases.
Blake Oliver: [00:47:47] Yeah, exactly. They leave a lot of it up to the executive branch to, to to do it, to determine how to do it. So you know, that's just like that's just my feeling on how the separation of duties works. And, you know, the bureaucracy is not a branch of government. They work for the president. And it's incredible. Um, there was a story that my dad forwarded to me about how, I guess, like, ten jobs were cut at the Grand Canyon National Park, and somebody from the Grand Canyon National Park got on with the media and was like, complaining about these cuts, saying that these are essential workers. And I'm thinking, can you imagine if, like, you're in a company and the CEO makes layoffs and then the head of a department or the like. The PR person for a particular department in that company goes to the media and says, yeah, the CEO just cut ten jobs in our department and they're essential people, and it's going to cause massive problems in our company. Do you see like the insubordination there?
Speaker3: [00:48:50] Yeah.
David Leary: [00:48:50] I couldn't see it happening with a corporation, but I can't see it for.
Speaker3: [00:48:55] The federal government. Yeah, right.
Blake Oliver: [00:48:57] And and there's something that actually seems wrong to me about that. That is the bureaucracy. And, you know, bureaucracy is never they never shrink on their own. It always takes somebody to shrink them because they just grow. They like they grow their power. Um, anyway, I'll get off my soapbox.
Speaker3: [00:49:20] I'm going to get off.
David Leary: [00:49:21] Doze for a bit and switch around to some other stuff.
Speaker3: [00:49:23] Yeah.
Blake Oliver: [00:49:24] Can we talk about, um, the pcob. Do we? I don't think we mentioned this on the show. I posted this on LinkedIn.
Speaker3: [00:49:32] It was an implied.
David Leary: [00:49:33] Story, right, that maybe the pcob might be rolled into the SEC.
Blake Oliver: [00:49:39] Well, and I think this is actually one of the things that like if DOJ's was focusing on the right things, they should focus on this because the Pcob has a budget of like $400 million a year. It's approaching half a billion. And there is no evidence that I have seen that the Pcob, the Public Company Accounting Oversight Board in 20 years of Post-enron, has done anything to improve audit quality. I read about them a lot. I have dug into the reports that they offer on their website, and I challenge anyone to to send me information that shows that the Pcob has made any difference, other than increasing costs for audit firms and increasing costs for issuers, which eventually gets passed on to taxpayers because it's funded by a basically a tax on public companies. So it's $400 million. And the story is that Mark Koziol, the president and CEO of the AICPA and Cima, said at a meeting of accountants. I think it was the association. It was like in New York, I forget which one. Accounting Today ran the story. He said that the association is preparing for the possibility that the PCAOB may be merged into the Securities and Exchange Commission under the Trump administration. And honestly, like this could be a great way to save money, because the Pcob right now is actually not a government agency. It's like a nonprofit that was set up that then is independent, really. And so like it's.
David Leary: [00:51:12] Funded by the government.
Blake Oliver: [00:51:13] Well, it's funded by a tax on.
Speaker3: [00:51:15] Public companies, on.
David Leary: [00:51:15] Public companies.
Speaker3: [00:51:16] Okay.
Blake Oliver: [00:51:17] So, you know, it's like this weird non-governmental bureaucracy, but it's semi-governmental. And why shouldn't this just be an office of the SEC? Because like the PCB is really not accountable. And so I'm looking at this just from our standpoint in the accounting profession. I'm thinking like this would be a great cost savings. I can't find evidence that they've improved audit quality. If anything, they're pushing small audit firms out of auditing because of the the way that they they fine. You know, a lot of they don't do actually meaningful fines on any of the big four. But the fines on a small firm can be huge, relatively. So in a lot of it is around like filing forms at the right time. It's not on actual like audit quality kind of stuff. So I'd be curious to hear what our listeners think in audit about that idea. But this to me, like if you look into all of these little areas of the federal government and how it regulates, I bet you will find so many instances, just like the PCAOB where they've been doing this thing. They've got like a thousand employees and they're really not making a difference. And those people would be better put to use in the accounting profession, growing the economy in the private economy than in the government, regulating and slowing down the work of everybody else.
David Leary: [00:52:33] And I can see, like a lot of the SEC, when there is fraud that may be tied to the audit. Right, or a failed audit, if you want to call it that. The SEC is really the ones that are going after the investigations of this stuff. They're really doing everything. The PCAOB is just kind of coming around after the fact saying, well, the audit was bad and so well.
Blake Oliver: [00:52:53] And they don't even say which ones.
David Leary: [00:52:54] Yeah, they never say who it is.
Speaker3: [00:52:55] Like the information is secret.
Blake Oliver: [00:52:58] The they inspect audits, but then they and they issue reports saying like, oh, you know, 50% of this firm's audits were deficient, but there's not really a lot of detail on what exactly was deficient. Um, and, and they don't say which companies got audited, had deficient audits. So it like provides zero useful information to investors. All you know is that the firm that audited this company had a bunch of deficient audits, but you actually don't even know what percentage of their total audits were deficient because the audits are not selected randomly. That's what blew my mind when I found this out. They are selected on a risk based, some sort of risk based approach. So the Pcob decides which audits they are going to investigate. So you can't extrapolate the numbers. You can't say, oh, Bdoe had like an 80% deficiency rate. And that means that 80% of all the audits they did are deficient. The Pcob could have just chosen audits that they think are going to have deficiencies. So you can't even compare these numbers and.
David Leary: [00:53:59] The PCAOB just to make sure I'm getting this right in my head. They're operating under guidelines and standards that they created versus the SEC is going after law violations, violations of the law around securities. These are codified, codified laws. The Pcob is just kind of wishy washy, right. Maybe it wouldn't make sense for them to roll in and then maybe that'll force Some kind of vacation of audit standards. You know, there will actually be some, some requirements that legally have to be met besides just two sign offs.
Blake Oliver: [00:54:32] So, you know, I'm curious, like of our listeners, like we've got some feedback here in the chat saying like, DOGE is not a department or Congress approved entity. Well, you know, the Pcob is not a department of the government. I mean, Congress created it, I guess, but you know what I mean. Like, there's plenty of examples of semi-governmental regulators out there.
Speaker3: [00:54:50] The Icpa.
David Leary: [00:54:51] You have.
Speaker3: [00:54:54] You know.
David Leary: [00:54:54] These other organizations.
Speaker3: [00:54:55] Oh, Nasbe.
Blake Oliver: [00:54:56] Is a perfect example. The National Association of State Boards of Accountancy is not a government agency. It is a nonprofit that was created by the state boards of accountancy. And it has a humongous impact on the accounting profession. But it's not a federal regulator. It's not a government department or agency. So, you know, the idea that, like, these actions have to be taken by a officer in the cabinet or something like that, I'm not sure. Fly. Um, and I'm not sure we would want that anyway, because we want an executive that can actually get stuff done. Unless you just want all of our presidents to be sort of like, you know, unable to get things done. I don't know, maybe that would be a better situation. So can I just talk about, like, an AI thing?
Speaker3: [00:55:48] Go ahead.
David Leary: [00:55:48] And then I'll do an Intuit thing.
Blake Oliver: [00:55:50] Um, so if you haven't checked out perplexity deepresearch, this is the best AI research tool available on the market today. You can actually use it for free. I think they give you five searches a day with Deepresearch. And if you have pro, I haven't hit a limit yet. And this is like the ChatGPT Deepresearch the Gemini Deepresearch that just came out, but way better because it gives you a very succinct report. You don't have to read through pages and pages and pages of research. Um, and it is unbelievable at answering like tax questions, financial questions, questions about the US debt. It it takes like three minutes to generate a response. And you can see the thought process as it goes through. And you just have to try it for tax research.
Speaker3: [00:56:36] It's it's.
David Leary: [00:56:37] Interesting. We saw these these startups over the last two years. Once, once ChatGPT hit the market. We're going to build this tax engine chat tool thing. And I think all the big firms are building it internally. Right. And now you can get it off the shelf. It doesn't even have to be specialized in tax. And it works just as well. It's pretty amazing. I'd hate it if I've invested. I was an investor, and I spent a bunch of money on these companies that were going to build this, that you now get in the model just.
Speaker3: [00:57:03] Well.
David Leary: [00:57:03] Good enough for free or.
Speaker3: [00:57:05] It's.
Blake Oliver: [00:57:06] You know, I mean, it's it's $20 a month if you pay for Perplexity Pro, I guess the only thing I would say about that is and an example of this is tax GPT. T so tax GPT just raised $4.6 million. And they are essentially a wrapper around llms with a database of tax. They have access to databases of tax research and questions and answers and all that. And so and that what that does is, is ensures that you're asking questions and that the AI is sourcing answers from the correct sources, the good sources. So it makes it much more accurate. The question is going to be yeah. Will these wrappers, these tax research wrappers with databases end up being better good in more. What am I trying to say. Will it be so much better than like the perplexity deep research tool that people are willing to pay to use it? My feeling is probably yes, because perplexity is just relying on what's available on the internet. But there are tons of databases of like private tax research that are not available on the internet. So that is going to be the winner if you really want accurate answers. Like the most accurate answers and stuff that is like super complex or very rare. You're going to have to have a proprietary database. So but give perplexity deep research a try. Jason Sass was highlighting it a lot in his newsletter, and I've been using it for like. Just all my own research. Um, it takes like three minutes to get an answer sometimes. So you don't want to use it for everything. But if you've got, like, a question and you really want, like, deeply researched answers, it's fantastic.
David Leary: [00:58:49] So I'm looking at like Bluejay's website. So Bluejay Comm, which I think is one of the ones the AICPA or CPA comm is pushing. Right.
Speaker3: [00:58:56] Yeah.
David Leary: [00:58:57] And there's no prices on the website, which tells me it's enterprise pricing. So it's it's going to be 20 grand, maybe more to implement this at your firm. And it's looking like you could just get perplexity. This is deep research is what the product's called. It's and it's part of your typical plan, or you have to pay extra for this.
Blake Oliver: [00:59:14] I think you can actually use it for free. Even if you don't pay anything, you can go to perplexify and you can try it. They limit you on how many searches you can do with it for free. And if you have pro, then you can effectively do unlimited. I haven't run into any limits yet. This is the same quality that people are paying $200 a month for. With ChatGPT for $20 a month. It it deeply researches topics and and does multiple searches and then collates all the information, synthesizes it into a report for you and you just have to try it to experience it. I, I could what I really would love to do is I need to bring a good example to the show that, you know, on an accounting or a tax topic. That would be good. Maybe I'll do that next time.
David Leary: [00:59:59] Well, it'd be great if people start doing these side by side by side. This reminds me of another article I have about how deep seek we you know, we were talking about deep seek three, four episodes ago. Everybody was going crazy about deep sea. That is the for reminder. That's the I out of China. It's the open source AI product that arguably they built on, uh, crappier, older chips. And they built it for a lot less money. Well, Jeff Siebert, who's the CEO of digits, tested deep seq against OpenAI's ChatGPT Anthropic's Claude Meta's Llama and found that its ability to perform accounting tasks were very relevant and on par with the other ones. Which might be true, because I think we feel like I feel like I've heard it's turning out. Deep sea may have just been trained on ChatGPT, so it should have that kind of equivalent. Um, he asked the AI's to classify 1000 transactions given the description, dollar amount, and chart of accounts. Chatgpt was correct 61 to 65% of the time, and deep seek was correct 59% of the time. So it's right there. And so again, this comes down to cost, right? If you can get an open source model and roll that in your firm and it's almost free. Now, do you trust China? That's a different conversation we can have about this. But that's the most amazing thing about this. Less power, less money, and you're getting equal results. That's the most amazing thing. So so it's not exactly as good, but it might be good enough at accounting deep seek.
Blake Oliver: [01:01:27] Well David, this was fun. Thank you everyone who joined us live today.
Speaker3: [01:01:32] I have one more thing.
David Leary: [01:01:34] It's a ten second story.
Speaker3: [01:01:35] Okay, go for it.
David Leary: [01:01:36] My favorite Intuit feature. Intuit now does passkeys on your QuickBooks login. So instead of me having to log in and pull out my phone and get my two factor code, I just scan my fingerprint and I log into QuickBooks. It's the best. It's the best ever.
Speaker3: [01:01:50] I love Passkeys do passkeys. Yeah, if you.
Blake Oliver: [01:01:52] Use like one password or LastPass, you can save the passkey and just it logs you in automatically.
Speaker3: [01:01:59] It's great.
Blake Oliver: [01:01:59] We need to do passkeys on our. On your mark, David. That's what we need to do.
Speaker3: [01:02:03] More development.
David Leary: [01:02:04] Funding.
Blake Oliver: [01:02:04] Don't forget listeners, you can earn free continuing professional education credit. Naspa approved CPE. We've also got IRS on there. Go to earmark Dot app or download the free app on the App Store. Free to sign up. Free to earn one credit per week. And this episode will be up there in a few days for on demand CPE. Um, thanks to everyone who commented today. So many comments. This DOGE stuff really gets people riled up. Uh, sorry that we couldn't get to all of them. Thank you. Rahul. Stoic. Hey, MJ fit pill red. Matt. Uh, Martin, we've got All-Pro. Hey, All-Pro. Good to see you stoic again. Mario. Um. Allison. Jacob. Everybody who commented. Uh, if you want to let us know what you think. You want to tell me I'm wrong. You want to send me stories? I am open to diverse opinions I don't consider myself to be a partizan, and you know. So send me, send me other stories. You can email both me and David at The Accounting Podcast at earmarked me. That's the The Accounting Podcast at earmarked me. I love hearing from our listeners. I read every email, even the ones in which you say that I am uneducated and lack knowledge. I'll try not to take offense at that, but I do think that it is funny that that's like the number one. Like seems to be the number one criticism from the liberal side. I find it so condescending.
Speaker3: [01:03:43] We've been we've been accused.
David Leary: [01:03:45] Both directions though.
Speaker3: [01:03:46] Like, I know we.
David Leary: [01:03:47] Did the abortion issue and a bunch of conservatives were like, I'm never listening again. And now we thought you were.
Speaker3: [01:03:52] For oh yeah, for a day.
David Leary: [01:03:53] And a half you were pro dose. And then we're like, I'm never listening again. I'm so mad at you guys. So you've had both happen I don't know.
Blake Oliver: [01:03:59] Well it's like it's like just a few weeks ago I was talking about how dumb the Trump tariffs are, and I still think they're dumb. You know, it's we didn't we still didn't talk about reciprocal tariffs. I think that could work. But like just slapping tariffs on and saying that's going to bring like, uh, manufacturing back to the United States is is ridiculous.
Speaker3: [01:04:18] And that's what the.
David Leary: [01:04:19] Arguments for these people that believe the IRS is going away, we'll just have tariffs. We don't need to pay taxes anymore. We're going to collect them. Oh, you.
Speaker3: [01:04:25] Actually do the math.
Blake Oliver: [01:04:26] And then like the revenue from tariffs is nothing compared to income tax.
Speaker3: [01:04:31] Yeah.
Blake Oliver: [01:04:32] So anyway um I think that's it. So I got to go get my hand checked out.
Speaker3: [01:04:38] It's my final checkup.
David Leary: [01:04:39] I'm driving up to Phoenix. We're gonna have a drinks tonight.
Speaker3: [01:04:42] We're gonna we're.
Blake Oliver: [01:04:42] Gonna meet up tonight. That's great. Can't wait to see you, David. Thanks, everyone for joining us. We'll see you again.
Speaker3: [01:04:46] Live stream in.
David Leary: [01:04:47] Person meeting this evening.
Speaker3: [01:04:49] No more. Very bad.
Blake Oliver: [01:04:51] Very bad idea. Cocktails and the accounting podcast. Maybe. Maybe someday. All right. Bye, everyone. Bye.
