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: [00:00:03] The return on investment Deloitte gets based on their political donations is amazing. They donated about 1.2 million to Democrats and 1.3 million to Republicans in the current election cycle, so I'm assuming the previous year's is probably about the same. I don't see why they would have donated more last year when there wasn't a cycle. And they're getting $3 billion in contracts. This is a great investment.
Blake Oliver: [00:00:24] That's not bad at all.
David Leary: [00:00:27] 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 news roundup. I'm Blake Oliver.
David Leary: [00:00:44] And I'm David Leary.
Blake Oliver: [00:00:46] And David. This week we have so much to discuss. The National Association of Tax Preparers is breaking up with Intuit after their recent ad advising accountants to or advising taxpayers to break up with their accountants and switch to TurboTax. We've got Trump Junior threatening Big Four firm Deloitte. And Trump promising to end double tax on expats. We've got KPMG supporting an end to the 150 hour rule. I think that might be the nail in the coffin. It's just a matter of time. But as we've discussed on the show, we will see how that actually works when it comes to implementing it. I think you've got a case about auditor misconduct and the SEC, and then I've got a clip to play us out. Fat Joe settled with BDO over fraud. There was a accountant over at BDO that was doing a Ponzi scheme with all these celebrities and athletes, and it's pretty, pretty bad PR for BDO and Fat Joe was on a podcast talking about that. So we'll play that clip to take us out. Um, yeah. Exciting, right? But first let's thank our sponsors, David, who are our sponsors this week.
David Leary: [00:02:11] This week our sponsors are I just blinked on the first one. Sorry about that. I want to make sure Live Flow. Live flow is our first sponsor. Then we have ignition and we have Mercury, our three sponsors today.
Blake Oliver: [00:02:24] Thank you. To Live Flow, Ignition and Mercury. Stay tuned to learn more about how you, as an accountant, can, uh, do more, work less with those apps. We'll tell you more about that later. Uh, before we get into the stories, David, I wanted to just share with everyone. This could be my last episode. I am don't look so shocked, David. I am hiking the Grand Canyon rim to rim on Tuesday on the October 15th filing deadline. So, uh, you know, hopefully I make it, but if I don't. David, I know that you will continue on and the show will go on.
David Leary: [00:03:05] We will continue on. It feels like my. I was, uh, in Cabo, and I didn't realize that a lot of the hotels are basically built on the side of a cliff in Cabo. And so I kind of felt like I was hiking the Grand Canyon, especially in the first day. You know, you get to these all inclusive resorts, you don't really know what you're doing, you don't have the systems down. And we try to walk up and down. Everything looks like it's like a quarter mile away, but it's a quarter mile straight up and down over and over and over again. And then finally you give up like, we'll just take the golf carts everywhere. Yeah, and get a ride everywhere you have to go. But I feel like I hiked the Grand Canyon, uh, this last week.
Blake Oliver: [00:03:39] And you were there celebrating your 50th birthday party, which we also celebrated in Tucson. I came down there, and that was a really, really fun time. Uh, how does it feel, David?
David Leary: [00:03:49] I really checked out. I did on the way home. I watched Netflix, and I didn't work on my laptop on the way home. I really it took five days to get to that point, but yes.
Blake Oliver: [00:03:58] That's great. Well, let's dig into this first story about the National Association of Tax Preparers and their breakup. Oh, and you said there's another organization as well that also is ending their relationship with Intuit, right?
David Leary: [00:04:14] They're not ending, but they've commented on, okay. I feel like there's a lot of virtual signaling happening. Everybody's trying to take a side on this.
Blake Oliver: [00:04:23] Yeah. Well, I mean, you know, it's it's pretty clear what side Intuit has taken. So yeah, if you're on Twitter, on Tax Twitter, it seems like that's all I see the last week is, is people really, really not happy with Intuit and and talking about what software can we switch off of. And it was interesting. Like there really aren't that many options honestly. Like less than a handful of options for tax software. And of the cloud based ones, I think like Intuit is really the the game in town. So gosh, you got to go from a cloud based tax software to something that's like desktop hosted. If you want to get off, you know, what was this other organization, the NEA? Oh, the National Association of Enrolled Agents, the.
David Leary: [00:05:09] Agents as well.
Blake Oliver: [00:05:10] They are also doing it. All right. Well, uh, let's see what Natpe said. They issued a press release, and they said that they are deeply disappointed by Intuit's recent advertising campaign promoting its TurboTax full service option. Go back to our episode a couple of weeks ago. Was it last week? A couple weeks ago where we played the clip?
David Leary: [00:05:34] The ad been almost three weeks already.
Blake Oliver: [00:05:36] Three weeks now. I have been seeing that constantly. Uh, we were last week. We were in LA visiting my in-laws, and my father in law loves to just watch sports all day. And so it was like that ad just kept coming on over and over and over again. So obviously Intuit isn't backing off from this. They're leaning into it. The Natpe represents over 24,000 tax professionals nationwide, and they said that they stand behind their members who uphold trust, expertise and integrity. And they are encouraging taxpayers to recognize the value of knowledgeable tax professionals. And they have decided to stop accepting advertising, sponsorship or exhibiting dollars from Intuit due to the campaign's conflict with members interests in Natpe is not advocating against the use of Intuit products, however, and respects tax professionals business decisions regarding their tools. So what did the NEA say, David?
David Leary: [00:06:36] So NEA did not do a press release, but they sent an email out to members. It looks like I'm not sure if there was a PDF or an actual image of the email. It looks like it might be a PDF capture of an attachment because it actually has a. It looks like a real signature on it from Twila midwood, the president of the National Association of Enrolled Agents. Um, similar. They're not happy with this, where they go on to say that we've heard you, and we echo your disappointment with Intuit's recent breakup with your tax pro advertising campaign. Um, we understand that this messaging undermines the invaluable role EA's play in the tax administration system, and the idea of replacing enrolled agents with full service tax experts is disrespectful and misleading. Um, then it goes on to really their sentence. Nea is actively working to address these concerns, with Intuit advocating for accurate representation of the tax professionals like you. We value your continued membership and support as we move forward in protecting the reputation of enrolled agents. And then, you know, please share your thoughts. Email us that type of thing. So they didn't actually put a real, uh, stake in the ground the way A and its natpe right did, but I've seen the reactions both ways. I've seen people not happy with NRA stance online because NEA is basically implying the truth. There's still tax pros doing this work, right? It's and it's kind of insulting to the tax pros that are actually doing the work for into it. Right. And there's some arguments about that.
Blake Oliver: [00:08:08] That's the thing that's funny about this is that it's the same people, right? It's the same people working in firms that are going over to work for Intuit on a part time basis. Um, but based on my research, they don't get paid nearly as well. I mean, unless these firms they're working for are not paying them. Well, it's like less than $30 an hour. And during non tax season it goes down to like 20 hours a week. Now you do get benefits if you stick around. And I think that's a big draw is the ability to have flexibility in part time work and and get health care benefits and all that. But the pay is not great, but maybe it's that there's enough accounting firms that don't offer flexibility, that people are willing to go work at Intuit as TurboTax experts.
David Leary: [00:08:57] Because before we've talked about their job placement, their job ads for that, and a lot of they were really leaning into flexibility, part time flexibility. Yes. Some health insurance things that maybe accounting firms are not offering now. I kind of went on a deep dive a little bit, because there's no way in my brain I was thinking there's no way. Intuit just has like an advertising relationship with these companies. It's probably deeper, right? And so I started poking around Google searching. So Intuit has on the Intuit accounts page, because that's a big dilemma to some third party marketing company. Intuit hires the best marketing companies they create. This ad for Intuit Accountants team is over here, right? Not really aware that this ads created until it's already out the door, basically. Yeah, but they have a tax preparation fee calculator. And the data for this free wizard comes from the National Association of Tax Professionals 2023 data. So they're using the logos on the page. They're using the data from Ntap or Natp. And do you want to maybe take a guess on the kind of rates that are in here? So let's so what is your most frequently used designation CPA or attorney. Enrolled agent annual filing season program. Other or none. Blake.
Blake Oliver: [00:10:10] So is this tool for accountants or is it?
David Leary: [00:10:13] This is a tool for accountants to figure out how much should I charge clients for my tax returns?
Blake Oliver: [00:10:18] Well, let's let's put my mine in there. I'm a CPA so a CPA, CPA okay.
David Leary: [00:10:23] Question two how many years of tax preparation experience do you have? Zero five, 6 to 15, 16 to 20 or 21 plus?
Blake Oliver: [00:10:32] I mean I'm not a tax CPA. So you better put 0 to 5 0.
David Leary: [00:10:37] To 5 next. And what kind of forms and schedules would you be doing for your clients or this specific client?
Blake Oliver: [00:10:44] Like, do I get to choose all the different forms and schedule 40.
David Leary: [00:10:47] Schedule A schedule C schedule. Okay. Schedule E?
Blake Oliver: [00:10:49] Let's say it's 1040 with schedule C. Let's make it real simple 1040.
David Leary: [00:10:53] Schedule C. Let's calculate your fees. Here's what tax pros like you are charging for these forms. On average $237.
Blake Oliver: [00:11:03] What?
David Leary: [00:11:04] So the National Association of Tax Professionals, in a weird kind of way, helps set this horrible bed of low wages. Like this is their data about their members, right, being utilized across the board. But it's just so that's out there. And then Intuit's also in bed with NEA. I went to the job board, the careers page Career center.org. There is currently 50 jobs for TurboTax live on that page right now. Wow.
Blake Oliver: [00:11:32] That that really amazes me. Um, I mean, not that specific number because I knew it could be really low. But what really shocks me about the whole tax preparation industry is just how the fees people charge can be so low and so high, and there's such a huge spread. You see guys like Logan Graf on Twitter talking about how I think he's had his firm like less than five years now. He's a young guy and he can charge at least $1,000 for a return. And then you have average fees reported by Natpe of like 200 $300 for a 1040 with a schedule C. And I'm thinking to myself, are are these tax pros just not good at selling and marketing and understanding their value? Because TurboTax costs that much these days, doesn't it?
David Leary: [00:12:28] If by the time you do the state and everything else, if.
Blake Oliver: [00:12:31] You do the self service, isn't it at least a few hundred bucks with the state.
David Leary: [00:12:35] With by the time you file? Yeah, probably 80, 90, 100 bucks, I'm willing to guess at least. And that's what's crazy about this whole messaging of the stupid commercial to begin with. The deal is actually horrible because most people are only paying $237, so they're going to save $23 by moving to TurboTax. Yeah.
Blake Oliver: [00:12:54] And doing a lot more work themselves. You're actually getting a great deal if you use tax.
David Leary: [00:13:00] I don't know if you do more or less work. I feel like I do a lot of work working with with my tax professional, but this is it's really silly because it's the message. It's the vibe of the commercial that's the problem. If Intuit had a different thing, hey, we'll just match. We have a 10% sale. We're going to match your last year's price for 10%. It's that verbiage. The breakup with your accountant is just so stupid, super aggressive. How did that get out the door? Right?
Blake Oliver: [00:13:25] I mean, it is catchy. I'm not gonna lie. Like the song.
David Leary: [00:13:29] But but they could have easily done it, like break up with H&R block. They could have done it and attacked the.
Blake Oliver: [00:13:37] Other tax preparers. The other the other tax in a box. Prepares.
David Leary: [00:13:41] Yeah, and nobody would have had a problem with that.
Blake Oliver: [00:13:43] Yeah. Um, well, I have another story related to Natpe. This was highlighted by Jeremy Wells, EE and CPA in his newsletter, and he said that the National Association of Tax Professionals is transitioning away from human tax research. So one of the benefits of being a member of Natpe is there's a phone line that you can call and you can ask questions. If you don't understand something, get a real human who's an expert to help you. That's super valuable. Honestly, to me, that is probably the.
David Leary: [00:14:15] So they staff a call center of experts.
Blake Oliver: [00:14:17] Right. Well, they're getting rid of it and they are replacing it with an AI program called Ask Bluejay. And they're saying it's due to a significant decline in usage of the phone line. So now if you're an Natpe member, you're going to get an AI chatbot that you can use to ask questions of, uh, but like I am a little concerned with that because these chatbots still make mistakes and they can't understand all the nuance. And sometimes you really do need a human expert to help you. And if you are a tax expert yourself and you're calling into this helpline, it's probably because you couldn't figure out some detailed nuance. And there's not a straightforward answer, and even an AI can't figure it out yet. So I'd be concerned about that. The NAACP might end up, you know, getting rid of one of the most valuable aspects of their membership.
David Leary: [00:15:10] So I just want to make sure you're stating this 100% correctly or I'm in my brain. Okay. It's very obvious Intuit was on the march that they probably want to have. I do a lot of work, and they might not need these tax professionals that are currently hiring. That's their ultimate goal. I will do all that work. Yeah.
Blake Oliver: [00:15:28] Just like Uber right? The goal is eventually get rid of the human drivers because then your margins are like 80%.
David Leary: [00:15:33] Right. So Natpe basically replaced ease with I like they're doing the exact same thing. They're on the same mission. They've just did a little bit faster because I'm sure they had expertise manning those phone lines. Right?
Blake Oliver: [00:15:45] I would hope so, yeah. But they said that it has decreased 80%. But maybe the problem is that it's a phone line, right? Maybe instead of having a phone line, they could create like a chat based support where there's humans answering the questions, using AI to help answer the questions faster. Don't get rid of your humans. That's the value.
David Leary: [00:16:02] Or take some of that Intuit's sponsorship money so you can afford to keep those lines open.
Blake Oliver: [00:16:05] And if you think about it, it's the human connection that's the value for these firms that are able to charge $1,000 or more for a 1040, it's because the the taxpayer wants you, the human expert involved and looking at things and taking care of them and talking to them. So that's your value. Don't get rid of that. Augment it. But don't don't put the AI in between you and the client. Use the AI to draft answers that you review and then send to the client first, that sort of thing. So thanks to Jeremy Wells for that. You can subscribe to his newsletter at Jay Wells Dot tax. Thanks.
David Leary: [00:16:48] Dude. Can we pause here before we kind of move on? Sure. At the end of the day, this is just another PR mess for Intuit. This commercial. Right. Yeah. And really, so much of this is since it's a sign it's taken over. Suzanne Goodarzi out. Yeah. The QuickBooks Live thing rubbed everybody the wrong way. Remember that whole tax ProPublica mess? Right. And Suzanne basically had a very I don't care attitude. Yeah. About it. Um, almost like a, you know, tough poop type of an attitude. Obviously, the layoffs was a PR mess, right? This is a PR nest. And then I don't know if you've been watching a little bit into the Intuit dome opened.
Blake Oliver: [00:17:26] Yes. Is who's playing at the Intuit?
David Leary: [00:17:29] Yeah. The Clippers. But I think Billy Joel was there two days ago or three days ago. Weezer was there 2 or 3 days ago. I don't know the exact date of the concerts, but a lot of people bitching. Now, this is not necessarily Intuit who wrote all the code to do all these things. I think Intuit is just paying to put their name on the roof of the building, essentially. Right. But a lot of bad press, because you cannot go to that place if you do not have a smartphone and you have to ID yourself and you need to use that to get in for your ticket, and you have to pay for all your drinks and food and all that, and everybody has to have their own smartphone. So if you have a flip phone, maybe you are Amish, you don't have a cell phone, you cannot go to this building. You're a child. The whole it's just getting lots and lots and lots of uproar the way they rolled out. But again, now that's another brand thing tied into it, which is tied right back to Suzanne. And, you know, I've had a long week of reflection because my Buffalo Bills lost two weeks in a row. I'm sorry. The coach really blew the calls at the end of this last game. And people he's been one of a very, very good coach. He's probably the best coach we've had in history for the last eight years, but he just can't seem to keep causing these little problems. He can't.
Blake Oliver: [00:18:37] And yet he keeps. Got it. So you're saying it's the same kind of thing? It's like Suzanne and Intuit just keep creating these PR messes. They don't necessarily have to. Exactly.
David Leary: [00:18:49] They don't have to exist. These are all really, really stupid messes that shouldn't need to exist. And eventually the board's going to get mad.
Blake Oliver: [00:18:57] Well, David, if you're tired of messes, especially when it comes to spreadsheets, you might want to look at Live Flow. Our lead sponsor of this episode. And I've got some exciting news for you, everyone. Live flow now syncs to QuickBooks and Xero, and then it'll connect that to your Google Sheets and Excel. So you get live data from QuickBooks and Xero in Google Sheets and Excel. Live flow has been a game changer for thousands of accountants and their clients, automating financial reporting from QuickBooks Online to Google Sheets. But if you were an Excel user or on Xero, you were kind of left out until now. Now you can use Live Flow to connect Google Sheets to QuickBooks online, Lync, Microsoft Excel to QuickBooks online sync Google Sheets with Xero, and even connect Microsoft Excel to zero. And here's something that'll blow your mind. You can create consolidated reports for clients who have one entity on QuickBooks and another on Xero, and Live Flow can talk to both at the same time, and your reports and custom dashboards automatically sync in real time. So whether your team, Google Sheets, Team Excel, team QuickBooks, or Team Zero or any combination of these, and you're ready to take your financial reporting to the next level and to get 25% off your first three months, head over to The Accounting Podcast dot promo slash live Flow. That is The Accounting Podcast dot promo forward slash l I v e f l o w.
David Leary: [00:20:21] And I should mention live flu is in the news, so Live Flu just had a raise. Um, they raised 13 million. 13.5 million. Wow. Congrats. Help launch the next phase of their company, which is going to be the launch of Live Flow next. It's a new line of reporting analysis products as it expands its go to market team and invest in research and development. So congratulations. Live flow.
Blake Oliver: [00:20:46] So pivoting to politics. The election is coming up and we've got plenty of news coming out from the Trump campaign. Trump Jr threatened Deloitte. He publicly criticized Deloitte, one of the Big four accounting firms, over a leak involving private communications between Senator JD Vance, the vice presidential candidate, and the media. So what happened is that a single person working at Deloitte, a Deloitte consulting principal, reportedly leaked messages that he had personally between Senator JD Vance and himself back in 2020, expressing skepticism about former President Donald Trump. The messages included critiques of Trump's economic policies and predictions about the 2020 election outcome, which J.D. Vance thought Trump was going to lose. And so Trump junior took to social platform X and condemned the leak, and even suggested that the GOP should reconsider Deloitte's federal contracts. He highlighted Deloitte's significant earnings from government contracts, stating, quote, maybe it's time for the GOP to end Deloitte's taxpayer funded gravy train, unquote. It's apparently $3 billion in federal contracts that Deloitte has. And it's kind of like crazy, actually, to me that, you know, Trump Jr would say that like because of this one person working at Deloitte that, you know, Deloitte should lose all of its contracts. But I guess that's the place we're in.
David Leary: [00:22:19] This is why we're talking about it, right? I guess that's why.
Blake Oliver: [00:22:23] Yeah. Um, I guess the question too is like, I mean, obviously I would not want to be this guy. And I'm wondering what Deloitte will do. But it was private communications between this Deloitte, uh, person and Donald Trump Jr. But I mean, I guess, you know, the thing is, if you're going to leak stuff to the press, you better be ready for the fallout. Um, what's more amazing?
David Leary: [00:22:45] There's a little note I saw in the article. I saw the return on investment Deloitte gets based on their political donations is amazing. They donated about 1.2 million to Democrats and 1.3 million to Republicans in the current election cycle. So I'm assuming the previous years it's probably about the same. I don't see why they would have donated more last year when there wasn't a cycle. And they're getting 3 billion in contracts. This is a great investment.
Blake Oliver: [00:23:08] That's not bad at all.
David Leary: [00:23:10] Not at all. Yeah.
Blake Oliver: [00:23:11] And they recently got some sort of like multi-billion dollar contract to help the US with submarines. And like my question is like what does Deloitte know about making submarines? But maybe if we have time, we'll get into that in a future episode. Trump was also in the news in the accounting and tax space for promising to end the double taxation on Americans living abroad. So we are one of the two countries in the world that tax Americans, regardless of where they live, based on citizenship. And this policy dates back to the 1860s. It originated during the Civil War, when many Americans were living abroad to avoid the war, such as in France. And there are millions of Americans who have to file in the United States. So perhaps this is like an attempt to get some of these expats to vote. Um, but it is important to note that the double taxation is fairly rare because you have to earn over $126,500 of foreign earned income before you have to pay tax, because that is excluded. So up to 126,000 is excluded. If you're living abroad and earning that money abroad. And then there's also foreign tax credits. So the amount of money that you pay, say to France, if you're living in France, you get to deduct that from your US taxes. So the folks abroad who end up paying taxes on their income abroad, beyond what they would pay if they were just living there without American citizenship, you know, it's pretty. You have to make a lot of money to end up. It's not really double.
David Leary: [00:24:54] Taxation, it's just double paperwork. You should file two returns.
Blake Oliver: [00:24:57] Yes. And that's the thing that's really annoying is that as I learned on my earmark podcast, when I talked to Eric Azevedo, who's a CPA living in Japan working with expats. Great episode. Go check out the earmark podcast. That's podcast Dot earmark Cpcomm. Go check out that episode and get a free CPE for learning all about it. Um, as I learned from him, um, I forgot what I was going to say. I learned from him.
David Leary: [00:25:23] About the filing. The two returns.
Blake Oliver: [00:25:26] Oh, yeah. Yeah, it's. The paperwork is often more expensive than the actual tax you owe because you end up owing no tax. But you still have to file a bunch of paperwork. So, you know, think about that. You know, maybe you're paying several hundred dollars or several thousand dollars to file your taxes, and you got to do it every year. And a lot of times people forget. They don't understand. They have to do this. They don't do it. They get out of compliance. So, um, I actually think it would be a good idea to, like, not require Americans to file the taxes if they are under this threshold. Right? Why make them file the forms if they're not going to owe any tax? It's unnecessary paperwork.
David Leary: [00:26:02] So I feel like this is the same game of the only audit people under $400,000. People with means are going to figure out how to play around with this and not have to file a tax return. Oh well, I lived overseas. Right.
Blake Oliver: [00:26:17] Well, and you know who would take advantage of this if this did change? Is Trump very very wealthy. Millionaires and billionaires. Because if we switch to a residence based system, a guy like Jeff Bezos could just go relocate to, I don't know, some island in the Bahamas, take his yacht from Florida to wherever.
David Leary: [00:26:36] Or you could just live in international waters, right? And not have to be anybody?
Blake Oliver: [00:26:39] Pretty much. You could just have a floating city, um, and just have everything delivered by Amazon drones, right? And then, uh, you know, they would not pay tax obviously, on that. And that is a problem because, you know, we have so many billionaires who choose to have US citizenship. It would create a huge hole in our deficit. And we already have a really big deficit. And do we really need more added to our deficit? Probably not. If we want.
David Leary: [00:27:06] We should do it the opposite way. We should encourage people that come here. We want to double tax them. But the way that we billionaires move here, more billionaires to move here.
Blake Oliver: [00:27:17] Yeah, exactly. Um, and I've got another political story that I wanted to highlight for you, David, which is a Wall Street Journal, did a roundup of the, uh, of the presidential campaign proposals that Americans like the most. And, uh, I'm, of course, locked out of the Wall Street Journal right now, and I have to quickly log in so that I can share this with you. And, uh, basically, these tax giveaways are really popular. Uh, people like this stuff. And I guess that's why Kamala Harris and Donald Trump are doing it.
David Leary: [00:27:56] So when you say tax giveaways, this is like, uh, don't tax tips. Yep. Don't tax expats. Those are they called giveaways. Okay.
Blake Oliver: [00:28:03] So here's the economic policy proposals aka uh, giveaways that have support by party affiliation. You can see on the screen here, we've got, uh, on the left side, we've got Democratic support. And on the right side we have Republican support. So the larger the bar, the more support there is. And going from top to bottom, you can see there is really widespread support for the policy of capping insulin prices at $35. 96% of Democrats support that, and three quarters of Republicans support that. Eliminating taxes on Social Security income that gets three quarters support from Democrats and 89% of Republicans. Eliminating taxes on tips, which you mentioned, David. 76% of Democrats, 85% of Republicans. Now, there are a few that are really popular with Democrats that are less popular with Republicans, although they still get either half or majority support. Capping out of pocket spending on prescription drugs to $2,000 per year. That gets like almost all the Democrats, 60% of Republicans penalizing companies that engage in price gouging. That gets 93% of Democrats and 57% of Republicans. And you would think that Republicans, being the party of business, would understand that, you know, price gouging, um, you know, which is the negative way to put it, actually has pretty big benefits. Meaning, like you don't run out of supplies, right? Like the people who who really want it will pay for it.
Blake Oliver: [00:29:45] Um, but, like, that's never been popular. Um, a $6,000 tax credit to families with newborns. 85% of Democrats like that. 49% of Republicans. Now, here's where they disagree. Making the 2017 tax cuts the Trump tax cuts permanent. 81% of Republicans support that, but only 19% of Democrats do. And then it flips the other way when it comes to giving first time home buyers $25,000 to put toward a down payment. It's 80% of Democrats, but only 20% of Republicans. Increasing the corporate tax rate that has big support among Democrats at 85%, but only 11% of Republicans. And I'm really surprised that, like, it's that low with Republicans. Republicans really don't like the increasing the corporate tax rate. But we know that a bunch of these Republicans are like workers, right. And the Republican Party has sort of become this like, I mean, they're trying to become the party of the working class, right? Under Trump. But it seems that like that messaging in, in the Republican Party has, you know, against corporate tax hikes has really worked. Um, and by the way, I don't support increasing the corporate tax rate myself. I think that would be a bad idea.
David Leary: [00:31:11] I wonder how different this would be on a couple of those here. They they call it the Trump tax cuts and the Trumps corporate tax cuts. Just take Trump's name out of there. And I wonder if the.
Blake Oliver: [00:31:20] If it would.
David Leary: [00:31:21] Change would have been slightly different a little bit. Yeah. Not so extreme.
Blake Oliver: [00:31:24] Um, imposing a tariff of up to 20% on all imported goods. This is crazy. 68% of Republicans support a tariff of up to 20% on all imported goods. I'm thinking to myself, you realize what that means, right? That means that, like, the price of everything.
David Leary: [00:31:41] At Walmart.
Blake Oliver: [00:31:42] Almost everything at Walmart would go up by 20%, right? And only 29% of Democrats support that. Um, and like, the tariff thing is just like the worst economic idea that we've ever had. I mean, it's it's it's it's the same policy that led to the Great Depression was tariffs. The Smoot-Hawley tariffs, I think was the name. Yeah. I remember about learning that, uh, in, uh, in, uh, civics or American history. It was a bad idea. We should not do that.
David Leary: [00:32:16] I'm going to jump into our second ad. Will you prepare for the next article?
Blake Oliver: [00:32:19] Go for it.
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Blake Oliver: [00:33:49] And now moving on to App News. Numeric, an accounting software company co-founded by Parker Gilbert, which automates financial close, has raised $28 million in series A funding led by Menlo Ventures, and that follows a $10 million seed round just five months prior. Um, it seems like the primary feature of this product is aggregating reconciling data from various sources, and then uses AI to perform flux analysis, identifying and explaining variance variances in account line items and their main competitors. Cited in this TechCrunch article about the fundraise are Black Line and my former employer Floqast. So it looks like there is a bright future in the world of financial closed software for corporate comptrollers and CFOs. And I was wondering, David, if you are familiar with numeric, if you've come across them and know anything about.
David Leary: [00:34:56] Them other than the press releases here and there? I have not, but the word flux analysis, I feel like is something I never heard of for 20 years. And I feel like in the last six months it's popped up a few times now. Yeah. Just just if there's other listeners that maybe don't remember what it is or know what it is, can you kind of explain?
Blake Oliver: [00:35:15] Yeah, yeah. It's, um, taking two periods and comparing the financial statements and looking for significant material differences between accounts. So let's say you're looking at revenue and you've got, you know, a few revenue accounts and you calculate the difference. You might do a, you know, the dollar amount difference in a column, and you do the percentage difference in a column. And then you highlight the ones that have a really significant difference. Perhaps revenue increased dramatically in one area or decreased dramatically on one account. And then you explain the difference. You have to go figure out what caused this. Is this because of a timing difference? Is this because we lost a key account? Is this because, uh, we are growing super fast organically in some way that provides really useful information to management. It's super valuable. It's also been really difficult to do traditionally, because you had to do it in spreadsheets, and you had to go look it up and dig into the GL and go ask a ton of questions and try to figure it out. And AI is really, really good at this. So you can actually try it yourself. One way to to test out the power of AI to do flux analysis is just take two sets of financial statements and upload them to ChatGPT. Make sure you're upgrading to the, you know, 4.0 latest GPT four model.
Blake Oliver: [00:36:49] You got to pay for that and and ask it to do the flux analysis and identify the major variances. And then if you give it the GL two, as long as your GL data set isn't too large so that it fits into the context window, it can even go and try to figure out what exactly caused it. So this is something that is doable right now with these AI chatbots. And startups are integrating that into software that connects to your general ledger to do it for you automatically. And this is something that like when I had to do this as a manager just for my small business accounting clients when I was in public accounting would take a long time to do it and to do it well. And it was also something that I couldn't do on the fly if I was in a meeting with a client and they asked, well, you know, why is this different than this? If I hadn't researched it already, it was not easy to drill down and to figure it out. But with AI tools, you can ask the question live and potentially even answer the question live, like right in that board meeting. And that is really exciting.
David Leary: [00:37:53] So essentially what numeric is, it's a bunch of tools to do these things that used to be separate spreadsheets or spreadsheets to track your fixed assets, a spreadsheet to track your Visualization to get the clothes done. Reconciliation. So all these separate spreadsheets, they're kind of combining into AI tools. Yes. They're software.
Blake Oliver: [00:38:14] And the other word people use for that is subledgers. So Subledgers managing your fixed assets. Subledger your, your prepaid amortization. Subledger. Right. These spreadsheets that would be kept separately and linking them up to your accounting system and also linking them to your closed checklist. And that's what we did at at Floqast was linking up those spreadsheets. So it's a really exciting area. And it's going to save accountants a ton of money and a ton of time, a ton of money in the form of time and headcount. Um, so like if you are a controller or you're a CFO and you haven't looked at one of these closed management tools, now that they're incorporating AI, it's getting even better and better and better. So check out Floqast I have stock I want it to go up, but also look at, you know, upstarts like numeric, you know, it depends on your company's size, right? What's going to be the most appropriate. But whatever you do, do not use black line. They were our like evil nemesis when I was at Floqast. So. They're there for big companies spreadsheet. They're there for like SAP, you know uh, Oracle kind of customers anyway. Yeah.
David Leary: [00:39:27] Obviously I went to the pricing page here for numeric. There's no prices.
Blake Oliver: [00:39:31] So David says I did a demo with numeric and floqast and numeric earlier this year. And numeric was more feature rich, especially with AI offering and just had a slicker feel. Yeah, it's probably because they're newer and younger, right? Full disclosure we didn't move forward with either. And Sean in the live stream in the Chat Says Sunday podcast while I'm in the office doing taxes. My lucky day. Awesome. Sean. Uh, yeah. Welcome to all of our tax pros who are cranking away ahead of the October 15th deadline, and, uh. Well.
David Leary: [00:40:06] If Intuit's successful, you get Sundays off because your clients will break up with you.
Blake Oliver: [00:40:11] Um. It's interesting. I've been seeing some posts of, like, CPAs who said, you know, in years past, I, I would work right up until the October 15th deadline and I'd missed doing stuff on the weekend. And this is like, obviously a big sports weekend and all that. So, you know, you don't get to go to the college game or whatever. And and there's some who have like said, you know, I cut clients, I raised fees, and I changed my schedule, and now I don't have to do that anymore. So I just want you to know, this may not be under your control, right. If you work for a firm, but when you do, someday it is totally possible to work your schedule out, um, and and not have to work on the weekends for tax season. And I think the number one way firms are doing that is with scheduling out the returns. So actually using software where like when the client signs the engagement letter, you actually timebox the returns on calendars. And so you allocate the time and the client has to get you what you need by that date, or they lose their spot and they don't get it done.
David Leary: [00:41:20] That's interesting. We just read the ad for ignition. But yeah. So every time somebody accepts the contract ignition, I could have ignition via, um, Zapier because it connects to Zapier. Go and create a calendar appointment and just block time 3 or 4 months out for me to work on that return. And then somehow or another, you need to tell Zapier to, like the calendar is full now, don't make any duplicate appointments.
Blake Oliver: [00:41:43] There's ways to do it. It's like how we book webinars on our platform, right? We have like availability that gets filled up. And so then, you know, clients like it's a great way to force clients to or incentivize clients to get you what you need. Because this is the deadline. This is when I'm going to do it. And if you don't get me this by then, we are extending you. And if you're already extended and you don't get me this, we are going to file you late. And that creates the pressure so that people don't do it at the last minute and put you in a bind.
David Leary: [00:42:11] And then as you have less slots available, you start raising the prices, which essentially, in a weird way, is what Intuit's doing with this commercial. Yeah. They're setting their capacity up by trying to sell a bunch of people extra early in the tax process, because I think you have to commit before the end of October. So they're filling up their capacity at a lower rate, so they know how much they can raise the prices and charge people more. Every firm should figure out how to do this right.
Blake Oliver: [00:42:35] What else is new? Kpmg is supporting alternative pathways to CPA licensure. In other words, they are supporting an end to the tyranny of the 150 hour rule. And this came directly from the CEO. I don't know what else there is to say about it. Uh oh. This is important. Kpmg is supporting the idea of automatic mobility for CPAs licensed in one state to practice in others. This is big and this is the solution to the whole substantial equivalency problem is allow automatic mobility. We just assume as a state that a CPA license in another state has the appropriate qualifications by default. If you have a CPA license from one of the other states, we're going to take it. And then you only deal with issues as they come up. So if a state dramatically changes requirements, which seems very unlikely, where it becomes just way too different than your own state and it's not allowing for, you know, adequate education or whatever, then you deal with it and then you can say, look, Minnesota, until you change this, we're not going to accept your CPAs, but make it a By default you allow them in. You allow mobility and then you only deal with it if it's a problem, just like driver's licenses. So you would think.
David Leary: [00:44:05] With the size of the big four in number of employees they have and their space, they span all 50 states that they would not have been fighting for this for decades, because they would be actually served very well by this. Here's the quote. Full mobility.
Blake Oliver: [00:44:22] That's right. Here's the quote from CEO Paul Knapp. While we can recruit the talent we need today, we have a brewing crisis that will impact accounting firms and corporations. We need to absolutely address it in the very near term. The cost of becoming a CPA has become too high, including both the cost of the extra education and the opportunity cost of spending an extra year in school. We can accelerate the development of talent by having people working with us earlier, especially as data and technology fundamentally change the nature of the profession. Hands on experience with data and technology at the cutting edge is incredibly valuable. So that's great news. I think this is it. Um, and a KPMG spokesperson said KPMG supports alternative pathways to CPA licensure that emphasize experience after one earns a bachelor's degree. We believe reforms can increase access to becoming a CPA and improve the quality of the profession. At the same time, because of the nature of technological change, more direct, hands on experience with coaching by practitioners enables a far more prepared candidate for the CPA.
David Leary: [00:45:29] When thinking that there's an article on CFO dive that I thought about this, they stopped short of specifically supporting the AICPA plan. So I think maybe they're taking a wait and see approach. Right. But that was really interesting when I saw the headline, that was the first thing I thought I was like, and my brain, I was like, oh, they probably are all over the CPA plan, and this is the start of the propaganda machine. But the fact that They didn't specifically say they're supporting that plan. It just shows how open they are to a solution. Right.
Blake Oliver: [00:46:00] The firm is doing this because they're going to have trouble recruiting in the future. They pointed out that bachelor's degree completions in accounting dropped 7.8% from 2021 to 2022, and it was a steady decline of 1 to 3% per year since 2015 to 16. And the time and cost of the 150 hour requirement for CPA licensure is among the top reasons that students do not select accounting as a major. Now, I would hope that KPMG would go one step further, which is addressing the hours that their young associates are working after they graduate and they go to work for KPMG. We also know that that is the top reason that accountants leave once they are in the profession, is they get into the workplace at the Big Four, they find the culture to be toxic. Unfortunately, that's the way it is. There's no there's no hemming and hawing about it. It's a toxic work culture with required overtime that is in excess of what should be acceptable in an office. And they're quitting and they are not going into industry. Unfortunately, they're just leaving accounting entirely. And the big public accounting firms bear the responsibility for that. So it's imperative that the associations and the state boards of accountancy streamline initial licensure and reduce the time and cost of that. But it's also imperative that the Big Four and the other large accounting firms get together and figure out how to let people have more work life balance and increase starting salaries, because those are simply not competitive. Welcome to another live stream viewer who has decided to join our chat. Say Cole says evening gentlemen. I recently got my BS in accounting at the ripe age of 37. Any advice on getting a first job? I'm seeing a lot of crazy wish lists for entry level positions. David, what's your advice for.
David Leary: [00:48:03] Those who had some job postings to be a TurboTax live read?
Blake Oliver: [00:48:07] I mean, yeah, go work for TurboTax live. They're hiring. Uh, I don't know. I the hardest thing about getting your first job when you're older is that a lot of these firms are ageist. That's really unfortunate. Especially the bigger ones. So I wouldn't go for a big firm.
David Leary: [00:48:25] Uh, I would try to find. We've had people, listeners of our show get hired by other listeners of the show. So the fact that you just posted that maybe somebody will reach out to you that way. I would also recommend we have the earmark community. You could go in there and post that you're looking for work, and that'll be a place for them to contact you, just in case your name on YouTube is not your real name, they won't be able to contact you.
Blake Oliver: [00:48:49] Yes, go to the earmark community. It is earmark community. I think maybe put the w-w-w before that. I'm putting the link here in the chat. It's growing. David and I are in there. We will see what you post. And other listeners of the show are in there too. So maybe you can go get a job in the earmark community. Uh, we've got a little hello area where you can post about yourself and you can post about what you're looking for, and hopefully that helps. I think the other suggestion I would make for you is try to get real world experience. Uh, it is really hard to get a job when you don't have any experience, especially if you're older. So like for me, I freelanced when I was changing jobs. I just I worked as a freelance bookkeeper, and actually I developed some incredibly valuable skills that helped me start my own firm. And then, uh, you know, went in as a manager in public accounting after doing that. So it's really about getting that real world experience. And yeah, you might have to work for relatively lower pay to start. But I mean, like David said, you could probably get 20 to 30 an hour working remotely at like a TurboTax live job. But hopefully there are some smaller firms that will let you in the door doing.
David Leary: [00:50:06] Some and go get that, like your go get certified in zero, go get certified in QuickBooks, get those credentials on. Because a lot of these job postings, they specifically call out, you need to know QuickBooks online. And that'll get your foot in the door if you know QuickBooks online because businesses are desperate for it, Intuit markets it so well that they're looking for an accountant who knows QuickBooks online.
Blake Oliver: [00:50:25] And maybe just reach out to like CPAs in your area. If you want to do tax, like reach out to the tax firms. The small ones often don't post jobs and they need help. And this is actually the perfect time is like right after the October 15th deadline. They're all like, oh man, that was bad. We need help. You could reach don't do it before then. Wait a few days.
David Leary: [00:50:44] Who's working Sunday night? Yeah, start calling offices. And if they answer their phone on a Sunday, start with those ones.
Blake Oliver: [00:50:51] Um. All right, David, you've got a story here about auditor misconduct, but I think we need to. Do you want to do.
David Leary: [00:50:58] An ad for Mercury and I'll get my story ready. Mhm.
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David Leary: [00:52:44] So we always get excited or we covered a lot. Every time the SEC finds an accounting firm for shoddy audits. Well, what happened in the last ten days or so? I was on vacation, so it's very gray. Is it two weeks? Seven days ago? Ten days ago? 14 days ago. It's a little bit gray, but the SEC is dropping charges against eight firms for shoddy audits. And this is the result of a new Supreme Court ruling. It was a 6 to 3 decision that said the SEC can't just extract fines from from the accused without a proper jury trial. Right.
Blake Oliver: [00:53:18] And they were using judges, administrative judges inside the SEC to prosecute these cases.
David Leary: [00:53:26] At a federal.
Blake Oliver: [00:53:27] Level. And the Supreme Court basically said, you can't do that. You've got to have a jury trial.
David Leary: [00:53:31] Yes. Defendants have a constitutional right to make their case to a federal jury because it's a federal crime. And federal judges are involved in this. This could obviously. A ripple outside of just the SEC to other government agencies, which that'll be an interesting thing to watch. The majority said that the SEC's anti fraud provisions replicate common law fraud, and it was well established that those types of claims should be heard by a jury, and it's already having implications. So the SEC dropped misconduct charges against at least eight auditors. They declined to comment on the reason for the dismissals though. But one of the cases was a case against Edward Hackert. He was a marcum partner, and in February he sought to block the SEC's administrative proceedings against him, saying that the in house process violates his right to a jury trial. So dismissed that one. Another PwC former partner had failed to document and report $109 million error on toymaker Mattel's financial statements. That one got dismissed and another one, an accountant, issued a clean audit opinion despite signs of revenue fraud at biotech company Mimetics am. I'm e mad? So they're dismissing these because they don't have the authorization to go after it. Well, now, how does what's the ripple on that? Is this just, well, these these other frauds and these other shoddy audits. So the SEC now out of the game.
Blake Oliver: [00:54:57] So if you're an auditor, this is good news because it means that you don't have to worry so much about the SEC coming after you for doing a bad audit. But if you are concerned about the future of the audit profession, I don't know if this is necessarily a great thing because it's already really, really difficult to get prosecuted by the SEC for misconduct. You have to really, really screw up as an auditor to get them to take a case against you. So now what does this mean? It means that the audit profession can continue with bad actors doing shoddy audits, and they'll be held less accountable, unfortunately. I mean, that's that's the sad fact. Did you see that the SEC is charging Tango's former auditor?
David Leary: [00:55:49] I think I saw that a couple weeks back.
Blake Oliver: [00:55:51] Yeah. I mean, this one's pretty bad. So I guess they're not dropping this one. The SEC charged accountant, Olayinka Ebola and his firm with aiding a securities fraud organized by Dozie Obasi and the Tingo entities since at least 2019. Allegations include failing to act on fake audit reports bearing Ebola's signature, making misstatements to auditors and concealing the fraud. The SEC is seeking civil penalties and to bar them from auditing public companies. A $250 million judgment was previously obtained against Obasi and the Tingo entities on August 29th. And uh, yeah, for those who missed that Tingo was this, I think, mobile phone company based in Nigeria where they fabricated most of the business. It was a completely fake and went undetected for years and years. And one of the big four was involved at one point and they got in trouble for this. I forget which one it was. That's how we ended up hearing about it. So this must have been the auditor before a big four firm got involved? Yeah. Um. All right. I've got one more story to take us out, David. And this is a clip from another podcast. Um, and it's about Fat Joe the Rapper. You listen to Fat Joe? No.
David Leary: [00:57:22] But I could recognize him. I saw him a couple weeks back. I'm almost young and hip. Still like to recognize him.
Blake Oliver: [00:57:28] Bdo is actually big in business management for celebrities and athletes and that sort of thing. And Jay-Z was a former client of B-do and severed ties with the accounting firm previously. Uh, and it actually is the same person, apparently, who was stealing money from Fat Joe. Vanessa Rodriguez was an assistant to a BDO tax partner and was fired in July 2022 amid allegations of theft. Fat Joe figured out that his, uh, his money was missing and Vanessa Rodriguez was allegedly stealing it, uh, and was perpetuating a kind of Ponzi scheme where she was taking money from one client's accounts and moving it to other clients accounts to hide the thefts. So using, like, Fat Joe's money to pay a credit card for, like, a football player or something like that. And, um, Fat Joe tried to address this with his accountants at BDO, and he did not have a great experience. And so I want to play this clip as sort of a warning for firms as to, you know, how do you handle this stuff and especially when you have celebrity clients. How do you address these kind of issues? Because, you know, the PR fallout can be pretty bad. The cover your ass methodology may not be the best approach, you know, to stonewalling a client may not be the best approach. So this is a like ten minute clip. I figure we'll just we'll just go out with this one. So thanks everyone who joined us today.
Fat Joe Clip: [00:59:08] And what's what's going on with your accountant picking man? I wouldn't tell you. It's my accountant picking because, uh, the accountants we're talking about, they're everybody's accountants. So it ain't just me. It's like, you know, they, they they everybody's they the biggest accountants. So what happens is us as creatives, you know, we spend so much time, we're doing books, we're doing TV shows, we're doing shows, we're doing do running businesses, we try and take our creativity to another level. I mean, we think we're supposed to trust these people. And so what I could tell everybody out there, every athlete, it really mostly because you're a businessman, you probably most likely watching every athlete, every artist don't trust them, don't trust the business manager, don't trust the accountants because we trust them to keep our family safe. Mhm. And the saddest thing is when you turn around and you trust these people and you turn around and say, yo, these people stealing from me Ponzi scheme like this is not a game like these people really stealing my money, taking fake credit cards under my wife's name, going to the ATM every day, pulling out cash in the building they work in, and, you know, robbing of a baseball players and robbing like they was Ponzi schemes. How do you protect yourself? They were paying, by the way. You protect yourself is. Unfortunately, you got to go to Oprah 101. Watch all your money.
Fat Joe Clip: [01:00:38] There's no way around it you need right now. The way. Since I caught this, you know, I've been signing my own checks, confirming my own wires, doing everything. And. And it's crazy because it's a lot more stressful. It is. Big Rich is in on that, too, and I hate that. I hate to think about money the way Fat Joe do it is I just work, work, work, work work and know I'm making money, y'all. I'm making money. I know what this is. I know what this is. I don't want to watch every single thing my wife buys. My daughter buys. You know, I don't. I don't like that. Right. That's stress. Yes. So we trust these people and turn around. They robbing us in every corner like it's incredible and we try to go to them. I never sued nobody in my life. You know how many people robbed from me? You know how many people stole my songs and did lean back 100. Lean with it. Rock with it. You know, everybody could have been sued, like, for all these. You know what I'm saying? I never sued a person in my life. But this was it. And. And this is a wake up call, not just for Fat Joe. Because Bdoe did what they did. We talked to them and was like, yo, look, you're stealing. Like we're showing. And these are the people you trust. You pay your taxes.
Fat Joe Clip: [01:01:53] The assistant was paying her daughter's tuition.
Fat Joe Clip: [01:01:55] Come on, her daughter's tuition. This like this is out of control. How did you catch them? Um. It's embarrassing. It's embarrassing. Uh, my, the the mortgage company told me it's the same shit that happened to me before I went to jail for something, right? That's what I was asking. It's the same fucking play, bro. It's unbelievable. You had to think somebody was punking you. Second play, they called me. Yeah, I thought it was punk. They said I walked out like I'm making money. I don't know if you understand that. Right? Like I'm on fire. Like there's just no way around it. No, I'm. No, no. I'm driving. I am being honest. It's true. I'm like a motherfucking race car with all your cigarettes. I'm getting it right. So when the when the mortgage company call me and they're like, hey, you're late on your payment, I'm like, this is impossible. It must be a mistake. So when they send me this stuff that we missed payments, we late. I'm like, I got a weird feeling in my stomach. And I said, damn, this feels like last time. But I thought, ain't we smarter? Ain't we more advanced? And so I don't want to drop names, but the biggest artist and ball players and everybody you know is signed to these to the same accountant PDO.
Fat Joe Clip: [01:03:14] So I mean with tons of billionaires that I know got their money there. So I'm like, no way. We can't get robbed from the, from the. And then we start looking at, we see this, we see this, we see this, we see this, we see this, we see this. I'm like, oh my God. Like. And so what happens is listen to artists. Listen from the young ones to the old ones. Fat Joe's no dummy. If it happens to Fat Joe, please, this should be an all out alert, not just BDO. Everybody who has an accountant in the game need to check and get a forensic accountant to check your money. Because these people start thinking your money is their money. Like I start thinking about the woman. The woman's at my daughter's sweet 16, right? And I'm thinking about if she's a real crook, which she is. Right. She's sitting down. She's probably sitting there with her husband. Like, you believe this guy spending all our money in this party. That's how I feel. Like you would leave this guy spending all our money in this party. Goddamn. And it's so. It's crazy because you working to secure your family. And the people who are supposed to protect you are robbing you. This is the second time this happened to me. Like same play.
Fat Joe Clip: [01:04:25] So what happens to them now?
Fat Joe Clip: [01:04:27] Um, well, we had to sue them, and we didn't want to do it, but we sued them and say, hey, look, it's we showing you ten, 15 different examples with proof that your people are right. Like, we was we was paying with my credit card. Hundreds of thousands on baseball players is a Ponzi scheme. Rob he didn't give the poor we was paying other people's credit cards. Right? Like 100,000, 80,000 for baseball players I never met in my life. Then we got some payments on my credit card that baseball players could not. It was incredible. Like, this is like a real this is a big problem. This is this is a and you get your money back. Nobody I you know, I'm no rat. You know what I'm saying? But principle is principle. You cannot steal millions of dollars from me and think, you know, we're not coming.
Fat Joe Clip: [01:05:16] And I'm already paying you.
Fat Joe Clip: [01:05:17] Too much money. When we started figuring out how much we was paying them, you know, we went back because we they ain't been giving us our. That's another thing. They ain't give us our records when we figured out this. We have to figure this all out ourselves. Like they didn't give us. Like you would think they'd be like, oh, you're my partner. Maybe the employee stole. We want to help you. It's been straight up like no help. No, you know, nothing. So they hiding something or they know. They know that she stole, but they also know. But they messed up because I told them I am the mouth of the South. Like you do not want me talking about. You rob me with a megaphone like, you know, you rob me. Look, we have the proof. Why don't you just pay me back now? Sue us. So the arrogancy of such a big company, they're like, no, I cannot sue us. Oh, you done fucked up now because, uh. And I'm telling every artist, if it happened to Fat Joe's. No, dummy. If it happened to Fat Joe. It's happening to you right now. Right? Right now. If you're not watching your account on your phone. If he's just. Oh, we got 10,000. Oh, we got 2000. Oh, we just paid. You're playing yourself. Don't trust none of them. Don't let them think that they're your friends. Their business manager. They know I never got robbed by a gun with a guy with a gun in my life. A guy with a gun. I've never been robbed by a guy with a gun. I've been robbed by men and ladies with suits on.
Fat Joe Clip: [01:06:49] They smile at me all the time. Damn. And act like they're good people. Those are the people that robbed me every single time. I've never been robbed. Stick em up. Never. But I've been robbed for millions and millions of dollars. And these people who think that they're smarter than us. But there's something Uncle Dan always says. He said what happens in the wash comes out in the rinse. So the last conversation I had with this employee, I said, yo, Vanessa, you know, if you stole, I'm going to catch you. The last words I said, no, no, I never. And they all everybody's response is always no, no, no, no. And so now they got me on high alert. Now I'm watching everything. 9.99 $10. I'm watching everything smoking. I have to reevaluate my business situations with everybody. So now people who I really, really trusted, the word trust don't exist with me no more when it comes to money. I believe that if you leave somebody with too much time. Yeah, who knows that you're not watching your money correctly. Unfortunately, the temptation is too big and they steal unless you got a straight die hard. I don't steal person. So, I mean, this is what I figured out with this because, you know, we treat these people like family. We welcome them in our homes. You know, we got people watching your money. Yeah, yeah, we got pictures of their kids. Hey, it's the first day of school. Meanwhile, I don't know what I'm paying for. The door to school. You're paying for the school this year. You really are.
Fat Joe Clip: [01:08:15] The first thing I do every morning when I wake up is check all my accounts and credit cards very before I even, you know, like.
Fat Joe Clip: [01:08:20] Check checked your.
Fat Joe Clip: [01:08:21] Account. I do, I do. I check everything. Hey.
Fat Joe Clip: [01:08:23] Guess what? Since I've been checking my account. Boy, that thing is rising to the top. Boy. God damn.
Fat Joe Clip: [01:08:29] But you know, you know. You know, I checked all my accounts, but the only thing is, you got to watch what your daughter spends and what your wife spends all the time. You'll be like that. You'll be like baby girl.
Fat Joe Clip: [01:08:39] I'm a.
Fat Joe Clip: [01:08:39] Baby girl. Come on now.
Fat Joe Clip: [01:08:40] I'm going to be honest with you. I mean, they ain't stealing. You know they're not. They're not like they're counting. But, boy, they know how to help themselves to shit. Yeah. And they don't hear no type of like. Yo, we gotta watch out. We gotta be. Nah, they don't know what that means. All the way up. Oh my God. Yo, yo. They do not know what that means. No.
David Leary: [01:09:02] Yo, Miami. Like again? Miami. Miami is like the king of financial crimes. Most of the crypto frauds are on Miami. I think 20% of all PGP fraud in the IRC fraud was out of Miami. Like, this is just my. What is wrong with Miami? I have a theory. Okay. I think it's because there's. There's things in Miami you could easily spend your money on. So if I. If I'm in Tucson, Blake and I pull off $100,000 fraud, I can't go buy a $100,000 car very easily. But Miami, like the stuff's there.
Blake Oliver: [01:09:31] You can do it. I can do.
David Leary: [01:09:32] All this, and you're motivated to do it. There's something in in Miami's, uh, culture that these these financial crimes are out of control.
Blake Oliver: [01:09:39] So I know we I said we would like end on this, but there's one thing I want to add, which is like, how do you prevent this from happening in your firm? Because this was an assistant to a tax partner at BDO. Now, BDO bears a ton of responsibility, in my humble opinion, for the way it responded to Fat Joe by forcing him to sue them by playing hardball. Like that's not the way you treat clients. Um, but there's also things they could have done internally to prevent an assistant from doing this. Like where were the internal controls? And I'm going to guess, based on the business managers that I know and I've worked with and I've met like there were not internal controls and probably this assistant had full access to everyone's accounts and could move money around at will. And so that's why as a firm, if you are going to handle money for clients, which I think is a very valuable service, you have to put in control. You have to put in place internal controls that allow you to delegate the moving of the money so that there is full visibility with the client and with you it. Money should never move without somebody approving it, and it should be. Ideally, the client should be inserted into every single payment authorization. And that's the only way that you can protect yourself and your firm and your client.
David Leary: [01:11:05] It seems like there's room for a product here because.
Blake Oliver: [01:11:09] What are you talking about? There's there's products that already do this. Like for.
David Leary: [01:11:12] Businesses. Like, they're business entities, but not for somebody's personal Finances. Well, I mean, that's.
Blake Oliver: [01:11:18] Yeah, you can do this though. Like like. Okay. So like, for instance, you can't set up a personal account with like, Mercury or with relay.
David Leary: [01:11:25] Or Emilio or.
Blake Oliver: [01:11:26] Emilio or.
David Leary: [01:11:27] Bill.com or any of them. The way you work.
Blake Oliver: [01:11:28] Around it is you just, you know, you run everything through an entity that you can set up there and you put the proper controls in place and you just classify everything the correct way in the accounting system. I mean, it's doable. It's just these people, I guarantee you that this tax partner who was doing this business management stuff had no internal controls in place and no systems. It was just log into the bank account and make payments. So don't be like this guy and uh, and screw over your clients this way.
David Leary: [01:12:00] And the worst part is the ignoring him. When he brought it up, I was reading the article. They they failed to quickly provide full access to his financial affairs. Yeah, basically, we're managing your money, but we're not going to let you see any of it, right.
Blake Oliver: [01:12:14] Well, because they they wanted to protect themselves from liability, right? If the more that they shared, the more you know, it's probably they're listening to their lawyers and they're, you know, it's not the way to behave as a brand, right? If they were thinking about the BDO brand, do you really want a guy as famous as Fat Joe going on a radio show and talking to millions of people?
David Leary: [01:12:35] It happened anyways. Yeah.
Blake Oliver: [01:12:38] So Tino says this would be a great interview for all my fraud. Please make it happen. That's a great idea, actually, Tino. Like, I want to try to figure that out. Aaron says regarding your comments about Miami, David, that pharmacy fraud was big there too. And Tino says Fat Joe is now Skinny Joe. Well, at least his bank account is. Well, I hope he gets his money back. Um, it seems like he's doing well, right? He seems like he'll be okay, but that's just unacceptable as a profession. Uh. All right. David. This was great. Wish me luck on my Grand Canyon adventure. Hopefully I'll be back here and not via helicopter. Uh, and good luck to everyone. If you're listening live, who is, uh, still working hard toward that October 15th deadline. I will be supporting you by hiking across the Grand Canyon on the same day, so you're going to be cranking away all day long. I'm going to be cranking away 23 miles, and it's a mile down and a mile up. So it's like 10,000ft of of elevation change that I'm going to do in the course of a day. And I'm going with Amanda Aguillard, the COO at Paget and a friend of mine for like 15 years now, and David, of course, a close friend of yours. And you have a community that you built together, accounting salon with her and she has gotten into like through hiking.
David Leary: [01:14:01] But she's been doing lots of real hikes. I know you might be in trouble. You might be in trouble.
Blake Oliver: [01:14:05] Well, I've got like ten years on Amanda, but she's got, like, uh, experience doing ultras. She did an ultra. I don't know if it was an ultra marathon. She did something.
David Leary: [01:14:14] Like 34 mile hike or so she's been doing. Yeah she is.
Blake Oliver: [01:14:18] She's been doing the Appalachian Trail like speed hiking through hiking like multi days. I'm I haven't been doing that. I've just been swimming. So I, I hope I can keep up. She wants to maintain a 3.5mph pace and that's like at the edge of my hiking ability. So we'll see. Um, wish me luck. You gotta say good luck.
David Leary: [01:14:41] Oh, literally. Good luck. Thank you.
Blake Oliver: [01:14:43] I'm just I need it.
David Leary: [01:14:44] I was thinking of drafting. Organize a search party and be ready, I started. My brain started going there.
Blake Oliver: [01:14:50] No, sorry. I have the phone with the satellite texting now. I got the iPhone 16, so, like, I can call for help.
David Leary: [01:14:57] If I get anything on my phone that day from you, I will not.
Blake Oliver: [01:15:00] I didn't make you an emergency contact so you don't have to worry about it. Okay. All right. Bye, everyone. See you next week.
