Or, tax professionals aren’t as good as they think they are. [Link]
We don’t know why businesses & their CEO’s hire the tax professionals the hire. But we know there’s a wide differential between the best person in the tax profession and the worst, or even an average professional. That won’t surprise anyone, but the amount of difference will startle you.After stumbling across an article in Business Insider about the surprising difference between a leading talent and an average talent, I did quite a bit of research and came up with this report [Here.] which I published a year ago. The Definitive Study on Human Performance.
RELATIONSHIP Marketing is a tool of the devil. It has wracked misery everywhere it gets a foothold. People who market by RELATIONSHIPs can’t be trusted because they don’t have your interests at heart, they are driven only by their own pecuniary interests. In a rational world, there would be no RELATIONSHIP marketing.
Every tax firm would be marketing on the basis of the RESULTS they get for their clients. But we obviously don’t live in a rational world. By leaps & bounds, the prevalence is, the average business selects tax professionals on the basis a
RELATIONSHIP. And they evaluate their tax professionals every year on the basis of that RELATIONSHIP. ELLIS achieves better results than the typical professional tax firm. We perform better than every firm that preceded us. We know that because we compare our returns with the previous guy’s returns.
Then one day we read in the Huffington Post and in a GAO report that most private businesses pay more tax at a higher rates than the Global 500. Subsequently we read a similar report from the SBA. But apparently no business read them. Because they are still paying more tax than the law requires at tax rates higher than the tax rates paid by theGlobal 500.
When I approach them about becoming their tax professional, these are the typical results. “I already got a a tax person. ‘Have a CPA already. “Robert, thanks but I have a company and friend that’s done them for years. “I’ve had the same great tax guy for years.”
We obviously don’t live in a rational world. In a rational world your taxes should be as low as they could possibly be because everyone would select a pax professional on the basis of RESULTS. But, that isn’t what they do. When I approach them with statistics showing that 99% of businesses pay more tax than the law requires, I get a blank stare. I get replies like , “I’ve used my guy for 27 years.” Or, “My tax guy is a good friend.” Never even a mention about results.
I don’t know what they think. Maybe they think I’m lying. Maybe they think they’re the one exception in a hundred. Maybe they don’t want to embarrass their tax preparer. But I suspect, they simply don’t care. They simply don’t want to know, the head in the sand approach. They just want to get out of the conversation as quickly as they can.
99% of private businesses pay more tax than the law requires. The rest don’t pay any tax.
bizztrategy @ Ellis CPA 