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Dentists, Puns, and Money is a podcast focused on two things: The financial topics relevant to dentists leaving clinical practice and the stories and lessons of dentists who have already done so.
1. The stories of dentists who have transitioned from full-time clinical dentistry.
2. The financial topics that are relevant for dentists making that transition.
If you’re a dentist thinking about your exit from clinical, and you’d like to learn from the experiences of other dentists who have made that transition, be sure to subscribe to your favorite podcast app.
Host Shawn Terrell also dives deep into the many financial components of exiting dentistry, including tax reduction strategies and how to live off your assets.
And, we try to keep it light by mixing in a bad joke… or two.
Please note: Dentists, Puns, and Money was previously known as The Practice Growth Podcast until March 2022.
Keywords: people, credit, dentists, pandemic, revenues, practitioner, eligible, tax, irs, cpa, cpa firm, claim, piece, business, checks, firm, employee retention, professionals, tax returns, qualify.
Welcome to dentists, puns and money. I'm your host Shawn Terrell and my guest on today's show is Catherine Tindall. Catherine is a CPA with Dominion Enterprise Services, and she is an expert in the tax credit niche. Our conversation focuses on the employee retention credit, and how owner dentists may still be eligible for 10s of 1000s of dollars, depending on how their practices were affected by the pandemic in both 2020 and 2021. We will dive into all of those details. Hey, as a reminder, our affiliated firm dentists Exit Planning helps dentists reduce their tax bill and build a plan to eventually replace their practice income. And we now have two service models, one for dentists within four years of exiting practice, and one for dentists that are more than four years away. If you are a dentist interested in learning more about working with us, you can schedule your initial consultation on our website. That's dentist exit.com. And from there look for the link to schedule that initial consultation in the top right corner of our main homepage. And with that introduction, I hope you enjoy my conversation with Catherine Tyndall. All right, Catherine Tyndall Welcome to Dennis puns and money. I am very excited for our conversation today. Thank you for joining us. Thanks for having me, Sean. So before we dive into all the nuts and bolts of the employee retention credit, let's let's start with a little context about you and your company for the audience. Could you share a little bit about your background, your journey and sort of how you reach this current point of your career?
Yeah, so I am a CPA, I'm one of the partners at Dominion Enterprise Services, we are a specialty CPA firm, we do a lot of work for other CPAs and business owners in the area of specialty tax credits myself, you know, I started my career always knowing that I wanted to have kind of a leadership role in an accounting practice, fell in love with tax, you know, I think for the same reason a lot of people fall in love with the medical, you know, industries, it gives you a really opportunity to serve people in a way that's meaningful for their lives. It's technically interesting work. And so that's always been my career, I've always been a tax person. And just over the course of the past couple years, I've really tried to focus with the firm on, you know, how do we create the most value for our clients. And so we've pivoted to doing more and more specialty tax credit work, you know, an advanced income tax reduction work, because it's more fun to be able to really show people, you know, an ROI on your services, and then also, you know, really moves the needle forward for their businesses in a way that just filing forms doesn't. So that's why we've kind of pivoted into the credit work. And that's a little bit of my background.
So let's start really basic, what is the employee retention credit, or as it's often abbreviated, the ERC.
So the ERC, it's a program that was released during the pandemic, by Congress, a lot of people didn't take advantage of it just because of the rules changed around it a couple of times after it was released. But basically, I tell people, it operates like a third round of PPP money. You know, for a lot of business owners, depending on how many employees you have, it can be a credit, similar to the PPP ranges. So for a lot of people, it can be, you know, a couple $100,000 Depending on how many employees you have. But unlike the PPP, it's a tax credit program. And so that's why, you know, we have a three year window to go back and claim and if you missed it, but it's basically there's a couple of ways you can be eligible for it, but it's largely driven by head counts, and then also how impacted your business was by the pandemic.
So who is the ERC for?
It's for employers, and for those employers who had disruptions during the pandemic. So, you know, I claim, I classify those into two camps. You know, one camp is you had disruptions due to revenue discrepancies. So it's not that you had less revenue year over year, but just that you have up quarters and down quarters compared to 2019. So that's one camp of people. The other camp of people are business owners who had disruptions during the pandemic due to direct government orders. So for a lot of dentists, we found, you know, in their practices, they were subjected to things like social distancing, sanitation requirements, they had to reduce appointment capacity, things like that, that we can, you know, in a lot of states, this was the case where that's another pathway to eligibility.
So yeah, I'm based in Iowa, I work with dentists all over the country as you work with clients all over the country. But just in Iowa, I know that dental practices were shut down, I think, for a total of seven weeks, by the state of Iowa in 2020. And then beyond that, some of the, you know, just the other disruptions. I remember talking to Dennis, when we kind of were in the middle of the pandemic looking back now and they're like, you know, I need a new chair and it's like a year for me to wait for it. A doctor ship the chair to my dental office. So there was a lot of disruptions, what are a couple of examples of how dentists might qualify for the employee retention credit based on sort of that as background? Yeah,
so what I've seen, you know, for a lot of them, the first piece that we look at is the revenues, because that's the easiest to defend with the IRS. And so what that is, it's just a quarterly comparison between 20 and 21. And then 20, the relative quarter and 2019, the rules are kind of complicated around it. But basically, what I would say, you know, if you experienced delays in payment, or all of a sudden, you know, I know for a lot of the dentists that we've worked with, a lot of the routine work that they were doing was canceled. And so you know, saying q1, very low revenues, but then in q2, it kind of picked back up again, with people coming back in for their routine care, you know, those sorts of things, where it's going to have a direct reflection in your revenues and your revenues, where I usually tell people, if your revenues were uneven, during the pandemic, get a formal assessment done, it takes very, it takes a very little amount of effort from you, but have somebody actually crunch your numbers because if they were uneven, that's an almost, that's, it's an automatic thing. So it doesn't even have to be due to the pandemic, it's just, you know, did your revenues meet these bright line numbers? Yes or no? Okay, you're eligible just based on that. So that's, that's what I see with a good number of people is that they were so disrupted operationally, that the revenue standard works for them, you know, the second pathway after revenue, there's another pathway to be eligible for it. And like I said, that's, that's the government restrictions. And that is very specific language from the IRS for how people are eligible for it. But what I've seen for dentists is that if you have direct orders, from a governmental agency, usually it's a state order for people. Sometimes if you're in a big city, there'll be city or local orders that can kick in. But basically, you just have to demonstrate that you had a direct government order, that was disrupting your operations with more than a 10% effect. And then for the duration of that government order, you were subject to, you're eligible for the credit. And so to give you an example of this, say, you know, you have, you have 10 employees. And in q1 of 2020, when the pandemic first started, you had a state order kick in that said, you're not allowed to do routine care, you're only allowed to do emergency care for two months, that government order would then trigger eligibility for those two months, because you're having a direct restriction and how you're able to operate coming from the government. So those are really the two paths, its revenue, which is just a simple calculation to see if you meet it. And usually, I tell people, if you had discrepancies, or you had, basically ups and downs, you just need to get an assessment done. That's the easiest way to deal with it. Or if you had direct orders from your state, or local government that were actively disrupting your operations in more than a 10% kind of effect. Those are the two ways that you can be eligible.
You said something really important at the beginning. And I think as we talk about how you qualify, it bears maybe putting a little bit finer point on it, and that the rules around this have changed a couple of times since it was initially announced release back in 2020. And I think that's important to mention, because I've talked to a number of dentists, just anecdotally, and I have asked them, you know, have you applied for this? Did you qualify for it? And the common response I often get is I checked with my CPA, I don't qualify, why may that not be true today, as we record this at the end? The end of summer and 2022?
Yeah, so I was I get that a lot. And you know, we're actually we're making a guide for top five mistakes I see people make business owners make with ERC. And you know, the first mistake that's on there is this question, and it's my CPA said I wasn't eligible. And I'd say, you know, the, how you actually determine that is the first piece is, do they have access to quarterly revenues for your company that they analyze? So that's one question. And if the answer is yes, like, okay, great. And then the second question is, did they have a conversation with you about how did the government interact with you during the pandemic? Were you subjected to any government shutdown orders, were you subject to any government restrictions on your operations, and if they didn't have that very specific conversation with you, you have not been formally assessed, it's an either or test. And so if they haven't looked at your revenues, like specifically quarterly revenues between 2019 and q3 of 2021, if you're an existing business, you know, before the pandemic, if they haven't looked at that specifically, and if they haven't had that convert that specific conversation about government orders with your operations, you have not been formally assessed for the credit because I find a lot of people where the CPA will just look at the revenues and they don't talk about the government orders and so you've missed out, I would say to a lot of people get hesitant because they're like, Oh, well, if it's government orders, is that more of a gray area, am I gonna get audited? Am I gonna lose this credit? And the answer is no, but Are both completely valid pathways, you just have to have the right documentation. You know, that's the game. That's the game with anything tax credit is, you just have to have good substantiating documentation. But that's the first piece I would say to people is if you haven't had those two conversations, you haven't been assessed for it properly.
So for anyone listening, that hears that and thinks, maybe I was not properly assessed for this, what's the process now to become properly assessed whether or not a dentist owner would qualify or not? Currently?
Yeah, I would say if you're, if your CPA hasn't already done that for you, you know, chances are, they're not very familiar with the credit, you know, I do a lot of this work for other CPA firms, because it's a very intense credit, there's a lot of rules around it. And so for them to take on a specialty one time tax credit that has, you know, a lot of nuance to it for maybe not a huge population of clients, that's a, that's a tall order for regular CPA. And so, you know, I would say at that point, if they're not handling a good volume of these, and you're not working with a firm where they have like a department that does these, I would then seek out like a specialty provider. So my firm is a specialty provider for these, you know, I know of another couple of really great other specialty tax credit providers that are also in this space that, you know, I'm happy to share, you know, one of them is a very popular another popular one that's, you know, we're we're friendly with is called try merit. But for the most part, you're going to want to look for another CPA firm, to handle the credit work for you and definitely have your any reputable CPA firm is going to want to talk to your income tax professional and have that person looped in because there are interactions that go on with the credit and your income tax situation. So that's kind of one of the guidelines, you'll know that you're kind of working with somebody good is that they want to get your tax professional involved to make sure they're, you know, on the same page with everything, and that they are like a licensed CPA firm or a licensed, you know, tax firm specifically.
So what I hear you saying is that this is very niche specialty work, and you need to be dealing with someone that is got their sleeves rolled up in it day in and day out and is a bonafide CPA and that I think dentists can relate to that because within demonstrators specialties, right, so this was the uncomplicated root canal or theory where you shouldn't feel any hesitation at all about we're referring to someone who's had a higher level of training and deals with those type of procedures, day in and day out. Shifting gears a little bit what's at stake, you mentioned that the credit is applied on an employee or a per employee basis. Maybe as we dive into some of the dollar amounts, could you give a little bit more some specifics there?
Yeah, so it's, you know, the credits worth up to $26,000 per employee, most people do not qualify for the full amount of that. And I would say an experience, most dentists do not, but it can end up being say 5000 to 7000. Realistically, you know, 5000 to 7000 per employee. It just depends on how disrupted your your operation was during the pandemic, and what state you're in, you know, if you're a dentist in Florida, where there are no regulations, really inhibiting you during the pandemic, and your revenues are pretty consistent, you'll qualify for last but you know, if you're a dentist in New York City with really restrictive situation, and then also your revenues were all over the place, you can end up qualifying for a lot more, but the top out of it is 26,000 per employee. So you know, if you only have a staff of say 10 people, that ends up adding up pretty quickly, you know, usually for a lot of business owners we work with, it ends up being anywhere from $50,000 to a couple $100,000. It's really driven on a per headcount basis for the wages that you were paying those employees. And I would say the one piece too is that it's it's not a credit, that's just a return of payroll taxes that you paid. It's just a flat dollar amount per head for the duration of the you know, so it includes wages and includes health benefits, you know, includes dental insurance, it includes, you know, in the payroll taxes, like all of those pieces together and how it comes back. It's not like a credit on, you know, future payroll taxes or something like that. It comes back as just a cash refund check to you of money that you already paid, because like I said, Congress designed it to operate almost like a third round of PPP. So they're just trying to get the cash directly back to you. And so it comes back in the form of like checks in the mail, that you can then just use however you see fit the business.
So it's payable to the business entity or the practice.
Yeah, so it gets paid, it gets paid back to who is paying the payroll. So it gets paid back usually to the entity. And then it comes back like I said, in the form of checks in the mail, because the IRS is all paper on this one, which it's quite an experience dealing with them with that but so it comes back as checks in the mail. And then it also because it's a refund of money that you already paid. You're not limited to how you can use it. And so unlike with PPP where you had to use that money towards payroll, because this is a credit refund. You can use it however you like. So if you want to make investments into the business If you want to hire a couple new people, you want to take a distribution for that vacation that you missed for the past three years, because of the pandemic insanity, you can do any and all of those things with it, which is great, because, you know, I found for most practitioners that I've been working with they, you know, they have a bunch of projects or things that they want to do beyond just payroll things with the funds. And so it ends up being a very versatile program for that.
So a dentist gets assessed for this and finds out that they do indeed qualify for some level of a refund. What's the next step beyond that?
The basic process that our firm does pretty similar across other practitioners is you start off with getting the assessment, most people will do that as a complementary process, just because, you know, from my standpoint, it's it's about a 10 to 15 minute phone call. And I can usually just tell from asking some questions whether or not you're going to be eligible for it. But figuring out what the credit amount is seeing if it's worth pursuing, you know, that it's enough of a credit that it's worth doing all the paperwork worth paying the fees, etc, you file the claim with the IRS, depending on the size, it usually takes around three to four months is what we're seeing currently, for IRS processing times on this, that sounds long, but it was a lot longer before. So it's about three to four months, and then they'll cut you the checks in the mail, you get the checks back in the mail, something that you have to run in tandem. And this is why, you know, when I mentioned, practitioners, like myself, we want to work with your existing income tax professional, there is an effect that happens with when you claim a tax credit, you can't double dip and get the deduction for the wages, you know, and expenses that were used to claim the credit, also on your tax returns. And so if you're eligible, say I'll keep it simple eligible for $100,000, you would get the checks from the IRS would be $100,000, back in three to four months, that's the cash flow there. But you'd also have to go back and amend your income tax returns for the years that you got the credit for. So say you got 50 and 21, and 50 and 20, you would have to amend those other tax returns to reflect the 50 and 50 of income in those years. Because you're claiming the credit now and 22, there is an effect that goes on there. But for you, as the business owner, really the only steps are, you know, making sure that you found a good practitioner to actually do the credit work for you. And then also making sure that the income tax situation your existing tax professionals are looped in, and that they'll make the corrections for you and that they're talking you through kind of the cash flow impact of how everything works, to make sure that you're ready for things like the payback of the taxes and 20 and 21, if that's applicable, and then you know, those cash flow pieces, but that's kind of the general process.
So you mentioned the amending of past tax returns for 2020 and 2021. And that sort of leads into the deadline to claim this credit, correct. Like this isn't going to go on forever. If this is something that people if they are eligible do need to do. And this should be releasing in October 2022 This episode, but do we need to do relatively quickly?
Yeah, so the credit itself is going to start phasing out in April of next year, April 2023. Yeah, and it's not going to fully phase out until like, another year after that. So there is some time but I would say for people, you know, if you're sitting on a $200,000, check, why are you going to sit on that for another six months, especially when we know it's about a three to four month wait to get the credit back. So I usually tell people, you know, most of the time when they work with us, and you know, most other practitioners, it's really only a couple hours of their time, you know, it's maybe an hour to putting documents together, maybe an hour of phone calls, just to confirm that, you know, you don't have any strange circumstances and everybody's on the same page, it's really only a couple hours of your time, and then the practitioner handles the rest of it. So put a couple hours in and then three to four months after, after that you then get the checks. It's worth just doing, you know, as soon as you can, because I always joke with people, it's like, what can you do in your business that's going to generate that much cash with that much time. And this is just one of those things. I tell people, you know, it's, it's easy to want to kick the can on programs like this, you're like, Oh, well, if I have until next April, you know, I can I'll get around to it. I'm so busy right now. And it's like, you know, if you have enough time to walk the dog and wash your car, and all that kind of stuff, like just take the two hours and get the reports together and just get it you know, get it buttoned up because you know you could be sitting on depending on how many employees you have. It could be like 100 grand, 200 grand, it's a really valuable program for most people who can participate in it.
That's a lot of hygiene checks. So yeah, maybe Yeah, exactly.
No, and I do a lot of work too, for like restaurant owners and I was joking with somebody the other day, who's a pizza guy and I was like, you know how many pizzas you have to make to, to like, make up how much this program's worth. It's like and that's why we're like, just get it in you know, just get it done. Bite the bullet. You know what I'm sure dental people can definitely relate to this because like, you see, like probably the same thing with patients where they have something that they need to get done, but they just keep procrastinating on it. It's like Man, if you just needed to get this one cavity filled, and now this is turning into this whole you know, this whole big thing is like pull the band aid off, get the work done. So that's my advice to people. It's like don't don't procrastinate with it because it is think about what you would do with that kind of cash flow in your business. You know how that could change things for you. You and it's definitely worth the effort of just pushing, you know, pulling together some reports and going on a couple of phone calls with a couple different providers and seeing who's a good fit and talking to your CPA and that sort of thing.
So you can amend tax returns that have previously been filed all the way back to 2020 into 2023. That just to get really technical for a second,
Oh, yeah. No, you, you can amend tax returns, you know, for many more years before that, the IRS is always happy if you're going to amend a return to want to pay them more income taxes. Yeah, so that's basically the program is you do go back, some people only claim for 20 or 21. So it's not that you're necessarily going to have to amend both, I would watch out for your practitioners like, oh, well, we'll just do the adjustment and 22, you really do have to go back to the year where the credits coming from, not the year when you get paid for the credits. So for most people, that actually ends up being beneficial, because kind of how this works in practice with people is 20 and 21. Were bad years for a lot of practitioners. And so you're in a lower income tax bracket. And so for you to pick up more income in 20, and 21. You know, that's not too bad, because you're in a lower bracket. And then for 22, most people that I work with, they're going to push that money into things that are tax deductible. And so they'll get write offs, you know, if you're filing this and well, I guess this will come out in October. So people moving on, it'll be more than 23. But you're getting write offs for things that you use that money for that are tax deductible, you buy another chair, you expand into another location, that you hire some more people, you pay yourself some retirement contributions that are tax deductible, things like that, you know, you're now getting write offs for those things in a year that you shouldn't be, you know, now that the pandemics kind of wound down our higher income years. And so that's actually more valuable deduction in 22, or 23. When you actually get the credit, cash back and you start spending that cash, it's more valuable to get it and 23, than the income tax that you you're having to pay for 20 and 21. So like an example, you know, say you're in the 15%, bracket, and 20, and 21. And now you're back up to you know, the 30 plus bracket, you'd rather have that deduction at 30%, then have that deduction of 15% in those previous years. And so it actually ends up working out pretty favorably for people to go back and do those amendments.
So this is a good thing that just popped up for me. And that, you know, I've researched this a little bit on behalf of dentists and have heard other people out there say the reason they have to do this as soon as possible is because you can only imagine tax returns back two years. And so you're telling me that that's incorrect, which sort of, you're shaking your head, I know, this is audio only recording this on video. But that leads me into, you know, there's a whole cottage industry that's popped up around this the last couple years, and all these Fly By Night type of organizations that are looking to partner with businesses to help with this for a share or cut of the proceeds. You know, some of these pictures that I see on websites and social media of some of the people doing this look like Jonah Hill's character and more dogs. And then yeah, they look a little bit shady. So Oh, yeah, for someone that is like, wow, I really need to look into this. But I, at the end of the day, a dentist is not going to be able to make a qualified decision about whether the person that's telling them they should be doing this and that they qualify actually knows what they're doing. So for that dentists, how should they go about trying to differentiate or finding someone who is trustworthy? And is an expert in this particular area, to try to help them?
So I would say and this is something to that's in our guide is, you know, how do you find out who the right practitioner is. And so I would say the first piece is, Do not be wowed. By testimonials from clients. Do not be wowed by good marketing. Do not be wowed by how many claims this company has already filed. Because the situation we're in right now, is we have an enforcement gap from the IRS. And so the IRS has five years, usually they only have a couple years to go back. But they have five years for these. Because you know, there's a lot of bad claims being filed a lot of bad actors out there. If you see things like customer testimonials, and things like that Don't be swayed by it, because those people haven't been audited yet. And so I would say the pieces to look at what I usually tell people is, when you go on the website, Are there human beings that actually work for the company that are listed on the website? Are the people in leadership tax professionals? Is that company, a CPA firm? Or are they something else? You know, I see a lot of like, law firms getting into this, who aren't tax law firms suspect I see a lot of people who are consultants or lenders or payroll companies, because the thing is, you know, if your CPA who does your income tax work, isn't doing this work? It's because they know enough to know that it's complex enough that they can't do it, right. And that's why they're not taking it on. And so, for you to go to somebody who's less qualified than your income tax professional for something that they don't feel competent and doing, that's not a good thing. So I would say you know, look for somebody who's a licensed CPA firm, look for somebody where when you go on their website You go on the team page? Is it a bunch of salespeople? Or is it a bunch of tax professionals? Right? Who's the leadership? Are they tax professionals? Or are they private equity guys that see a business opportunity here, right? Because you're looking for high quality work, ultimately, you're not just looking to get the credit, you're looking to be able to make it through audit. And so for our firm, one of the things that we offer, with any claims that we do is that any IRS inspection or IRS activity that happens after the claim we include is complimentary to the work that we do, because we're expecting it. The other one, too, that I've found to be, you know, helpful piece of advice is, go on the website, look at the actual credentials of the people involved. Do these people put out educational materials about the credit? Or are they just salespeople? The other pieces, go on the company's LinkedIn page, and scroll down and see who are employees there? Is it mostly a sales team? Are there actual, like tax professionals? And click on those tax professionals? Have they been working in the tax industry for a long time? Do they have credentials? Are they CPAs? Do they do things like podcasts or webinars or things like this, to give out educational material, those are all things that I think are good indicators, that indicators are things like not a CPA firm, not a licensed tax firm, you know, a consulting company that then farms the workout to other tax professionals, but they don't do the work themselves went through the sales process, you never get on the phone with a tax professional, you're only ever talking to a salesperson, all those things are bad signs to me. And you know, I would also just be very skeptical of if you get an introduction to a practice, you know, from an association or from some other source, who's not tax professionals themselves, because I've seen a lot of like professional associations and things like that partner up with these guys, because they get referral deals and things like that. Yeah, like they have state dental associations haven't really done the due diligence on the actual practitioner to say like, oh, no, these guys are, you know, they have a pedigree of being in the tax industry, they do other specialty tax work, you know, they're well respected in their industry, that sort of thing. Like they haven't done a lot of that due diligence, they just get wowed by the marketing, wowed by the referral fees, stuff like that, you know, and you're the one is the taxpayer who gets left holding the bag, because ultimately, if there's bad claim filed, the IRS isn't, they're gonna come back to the practitioner, but they're gonna come back to you, because you're the one that got the, you know, got the checks that you shouldn't have got. So you know, it's really, for business owners, that's really the critical decision is, is vetting the right practitioner for this. And as long as you've got the right practitioner, the rest of the process is very easy. And you really have nothing to fear from IRS audit that sort of thing. Because any practitioner who's worth their salt, the way they do the claim is so that they're going to make it through audit. And so that's, you know, that's something that you should feel easy about, you know, once you found a good person to work with.
Well, that's a really good point. Because again, this is anecdotally just talking to a few dentists about this, that was their one big concern was more or less is the juice worth the squeeze? Right? I might get 50 grand back, but I profit $500,000 a year by just practicing good dentistry and taking care of my patients. Do I want an audit three or five years from now when that fly by night company that existed to help me with this? Yeah, I don't know where I can't get a hold those people. I don't even know if that company still exists? They got a peel box in Aruba, whatever it is,
yeah, I know. It's like, oh, they're like, you know, South Beach, Miami, and you look up the company headquarters, and it's like a beach mansion. It's like that level of stuff going on. But yeah, I would say for most people, you know, if you're working with a good CPA firm, you know, and this is part of why I offer it. With all the clients, we work with that it's a complimentary thing, because I know the level of quality work that I do. And I know when these IRS notices start to come in and a year, two years from now, it's going to be basically we write a letter, we submit, here's the backup documentation for how we did everything. They take a look, they see that everything's clean, there's no there's nothing for them to dig into. Because they just see it's clean and well done work. And that's it, you're done. You know, I don't see for myself, you know, that's the, that's the thing that I see with these with these claims is yes, there is, you know, there is going to be a lot of IRS activity here. But the fact that we've designed, you know, internally just talking about us, you know, we've designed the product, knowing that, and also having been through IRS resolution before and knowing how the IRS works and knowing what the agents tend to ask for and that sort of thing, like, I'm just not concerned about it. And so that's why we offer it as just a blanket, you know, we handle it because, in reality for me, as a practitioner, I expect inspections to take maybe one or two hours of my time to handle as they come up. And it's you know, when you deal with an agent, you know, when they come in, and they talk to you and you build a certain level of rapport with they understand, they have a lot of respect for CPAs. And you show them the level of work that you do and the the audit file that you have, and they see that there's nothing there for them and then they just close the case. So that's basically what I'm expecting for us. A lot of these fly by night, guys, you know, I just know that a lot of them don't keep the documents that they need. They don't do the research that they need based on how they talk about the credit, how they talk about eligibility and things like that because the rules are very, very special. effec. And we have very specific FAQs and guidance from the IRS about who qualifies and who doesn't buy. And so if you haven't designed your output products from a practice perspective of, okay, you know, we really designed what we produce and save internally for the clients for the claims, based on, you know, all the IRS notices that have come out about the credit about all the FAQs they've done, and all the they call it like specific examples of how you treat certain things. And so that's how we've designed our product, because it's like, that's what they're going to use to audit us in a couple years from now. And you just show them like, here you go, this is how you guys do it. This is how we did it exactly the same. And then they close the case and walk away.
Could you touch on the compensation structure? If a dentist would like to hire you to perform this service for them? How do you guys earn your revenue? And what's that formula look like? Yeah, so for us, basically, we do a small retainer up front, it's usually around $5,000. But it depends on the size of the claim. So it's if it's small claim, the retainer is usually lost. And then the rest of our fee is payable after the IRS pays in three to four months. Because I always tell people, it's much easier for me to factor receivable than it is for you to get financing. And so that's usually what we do, as a CPA firm. And this is something you can watch out for to, you know, CPA firms are not allowed to charge contingent fees, we're not allowed to say, Okay, it's going to be 25% or 30%, of whatever your credit is, and not actually give you $1 figure for that, we're not allowed to charge like that. And so our firm, you know, it's a flat rate, it just depends on the complexity of your claim. Usually, for most people, it ends up being around 15% of what their credit is, is what our fee ends up being. But it really depends on things like the quality of your records, the complexity of your claim, you know, if you're an aggregated claim, you've got multiple entities that are claiming together, all those sorts of things can can move it around, but for the most part, it tends to be around 15% of the credit, but it is just really subject to what your actual situation is. So I would steer clear of people who just do the like flat, you know, it's 25% of your credit. And if you don't get it, you know, no problem, because you know, we only get paid if you get paid like CPAs are not allowed to charge like that. I've seen some of that. Yeah, so it's, you know, if you see that kind of language, you're like, oh, I don't know, I don't know if this is okay, because we're just we're legally not, it's it's an IRS circular 230 violation, like, we're not allowed to do that. But I do say, for our firm, you know, it's because I've done so many of these, we basically don't do the retainer fee until we've already, when we talk to the client, we want to make sure that they actually are eligible and give them a good sense of okay, you know, you look like you're eligible for $150,000. Here's the retainer, here's the fee, do you want to pursue this more like, I'm happy to invest our time in the firm and do that complimentary process for them, just so that they have the comfort of knowing what it actually is before they sign all the paperwork and pay our fee. So that's the process that we do internally, because, you know, I have goodwill towards the clients that we work with. And it's, I know, for myself, it's low risk for me to put my neck out and say, Well, like I can see from your state or zeusie, from your revenues, I know you're eligible for this. So I'm happy to put in the work to figure out what it is so that you can be comfortable with that before we talk about fees. That's the process that we take in the firm. But as a practical example, you could fairly definitively Can you give the dentist $1 amount on the front end? Did you say that or you just know that there's Yeah, no, we give it to them on the front end. So there's no penalty for them playing and not winning. Basically, this is how I take it because usually in that first phone call, I can usually tell just from that first phone call whether or not they're eligible, basically, I'm happy to eat the risk of we put some time in and it turns out that it's not going to work for them, then you know, them having to pay something upfront. So that's what we do in the firm. So it's really, uh, you know, I want to make sure people are comfortable and understand the value of it before they you know, make the investment into actually executing the work. Interesting, good stuff. Thanks for that explanation. As we start to kind of wrap things up here, is there anything that I haven't asked about haven't hit on that you think would be important to mention? I would say, you know, the main things that I try to get every business owner to do is you really do want to take the time to make sure that you've been properly assessed for this thing, because like, I'm not over exaggerating when I say that it can be a couple $100,000 Depending on how many employees you have. And the main thing that I see business owners do is they just get so caught in the weeds have their business that they don't pursue programs like this, I think it's just really a fatal mistake. So I would say that's the one piece that I really urge people to do is do a little research, you know, if you can find some other I do, I do a lot of other podcasts, but find some other voices, you know, take some time to try to really pursue this and look into it for your business because it's a totally legitimate program. Like I said, it's like third round of PPP. And so to just let it slip by, because you can't, like feel uneasy about it or feel overwhelmed by it. That's what I see the most critical mistake that business owners make with it. So we've been pretty heavy on IRS and taxes to lighten things up at the end. The name of the podcast is dentists puns and money. Do you have a good dental joke that you would like to share with the man? Well, uh, you know, if I had a dentist looking at my teeth, it'd be pretty, pretty probably think it's a joke, but no, I don't even have good tax jokes.
Like that. We'll let you off the hook with that one.
For those listening, that are interested in connecting with you learning if they might qualify and getting assessed perhaps what's the best way to get in touch with you and your firm, Katherine? Yeah, the best way to get in touch with us is you can visit our website. It's dominion, e s.com. I'm sure that'll be in the show notes. We have a lot of resources on the website. And then we also have a an eligibility tool where you can just ask a couple of really basic questions and you can see whether
Aren't you might be eligible for the credit. And then we also have on there some guides for just very in the weeds guidance about things, you know how to avoid the mistakes that business owners encounter with the CRC. And we do a lot of this work for other practitioners and business owners. And so we see a lot of similar mistakes pop up all the time with how people approach this program. So that's, you know, a very valuable guide, I think for for any business owner to check out. And then if you're interested in working with us, like I said, we do a complimentary assessment, a very non salesy kind of process because either the credit works for you or it doesn't, you know, it's a great program, great opportunity. And so we're happy to, you know, work with people and work with their tax professionals to I always tell people, you know, usually when I do people's work in there, they find me before their tax pro does, usually we then start doing work for the rest of the tax pros clients because they have such a good experience. So it's, it's very, you know, we're very relaxed when it comes to just having no pressure conversation and just seeing if it's a program that could work for you. That is Catherine Tyndall, CPA with Dominion Enterprise Services. Catherine, thank you for sharing your expertise and for being a guest on Ventus funds and money. Thank you so much, Shawn, I really appreciate it as your guests can probably tell. I do enjoy talking about taxes.
Good stuff, take care. Thanks for listening to dentists puns in money. For more information about my day job, which is guiding dentists to their financial off ramp from active practice, you can visit dentist exit.com And there you can find more information about us, sign up for our email newsletter, or schedule a discovery call with Sean and that's me. If you've enjoyed this episode, please leave us a review and rating on Apple podcasts and also please share the podcast with your friends and colleagues. As for the boring legal stuff, Dentist Exit Planning and Terrell advisors LLC as a registered investment advisor. The information presented should not be interpreted or construed as investment legal tax financial planning or wealth management advice. It does not substitute for personalized investment or financial planning from dentist Exit Planning or Terrell advisors LLC. This podcast conveys the views and opinions of Sean Terrell and the information herein should not be considered a solicitation to engage in a particular investment or financial planning strategy. information presented is for educational purposes only and past performance is not indicative of future results.