Everything about America is in play this election. There is talk about getting rid of the tax system, our energy grid, the constitution, the Supreme Court, the rule of law, law enforcement & virtually everything else. We already rid ourselves of much of our history, statutes, individual businesses, downtown business districts and probably many things I didn’t think of. Once great cities are now mere shadows of their former greatness. Residents are abandoning them for safer cities.

 If the new regime decides to change the U.S. tax system to a European or other system, that will be a dire mistake that could stifle the marketplace for years or damage it irretrievably. Out tax code is probably one of the reasons the U.S. economy outperforms every other economy in the world. It certainly isn’t luck.

THE 16th AMENDMENT created two separate tax systems in the US. One for businesses & their owners, and one for everyone else. By mistake, not intention. There was some concern people wouldn’t vote for the amendment so Congress advertised in newspapers throughout the country, they would tax only ‘profits’. This became part of the amendment’s legislative history which made it a fundamental part of the amendment itself. The Supreme Court affirmed it in Glenshaw Glass in 1954, and Congress codified it in section 172 the same year. Ordinary taxpayers can deduct a few things, like mortgage interest & charitable contributions, which are a gift from Congress and can be repealed by an act of law. But Section 172, District Court cases & the Supreme Court make it clear that, for businesses, anything is deductible as long as it is ordinary, necessary & reasonable in pursuit of profits by a legitimate business, has economic substance & a valid business purpose. Absolutely nothing can be excluded if you meet those requirements. And who determines that? The taxpayer.

The courts added valid business purposes and economic substance to attack giant tax frauds, such as BOSS & SON OF BOSS. Even when Congress intends to prohibit a deduction, such as health club dues, it can still be legally deducted by re-characterizing it to advertising. Of course you have to prove valid business purpose.

In addition, our legislative form of government means a couple hundred people spend a considerable amount of their time proposing and passing new tax legislation every year, and every few years the president does the same. Major changes to the tax code are referred to as the 1939 tax code, the 1954 code, the 1986 code, and the 2016 code.

US TAX LAW IS A BLITHERING MAZE OF COMPLEXITY THAT CHANGES CONSTANTLY: The tax code is reportedly 77,000 pages long, and growing. Add in Regs, Rev Procs & litigated results, and it becomes quarter of a million pages. Which is a lot for a guy to handle. Most states have based their state tax code on the Internal Revenue Code. But, in the midst of all that clutter, the U.S. tax system is the best in the world.

No one can learn the tax code inside & out. These primary sources are tax law authorities that must be followed and include: the Internal Revenue Code, U.S. Treasury Regulations, Revenue Rulings, and Revenue Procedures. Primary judicial sources include: the Supreme Court of the United States, Courts of Appeal, District Courts, and the U.S. Tax Court. Add in 50 states and 172 countries and tax law that professionals have to abide by grows to unimaginable size, perhaps as much as 25 to 50 million pages.

I’m a mensan with a genius IQ and I cannot fully know tax law. The best I can do is get a grasp of the overall body of tax law.

To complicate all of that, is tax savings lie in playing one part of the tax code against another part.

Different from the criminal code.

But that’s not a bad thing for business taxpayers. Savings are hiding in the complexity.

As I said at the outset, the U.S. tax code is spectacular, by mistake. The U.S. is the only country in the world with a system that gives business taxpayers a measure of self defense against a government that does not always treat taxpayers with respect. A recent administration actually put the IRS to work auditing their opponents.

In progress. Still being written.

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Strategy vs. Goals & Plans

Strategy is a nebulous term that has never been adequately defined. It’s not just planning, but it involves goals & planning.

For instance, the way I normally describe the difference is this. The goal in WWWII was to conquer Germany. But it required a strategy, which involved goals, each of which was individually planned.

Looking back, their first goal was to drive Germany & Rommel’s North Afrika Korps. out of North Africa. The 2nd goal was to cross the Mediterranean Ocean & invade Italy. The third goal was to fight their way up the boot of Italy to draw attention & support away from the Russian Army invading from the North and from the West coast of Europe where the allies planned another invasion. All of these goals required individual planing, which resulting in catching Germany in a pincer action winning the war.

 Conquering Germany was the strategy, involving individual goals which were individually planned.

The accompanying article is another reasonable take on strategy.

MY STORY, briefly


After graduating from college with highest grades, I joined the biggest & best CPA firm in the world where I audited, advised & prepared tax returns for the largest companies in the world. After that, I joined the Fortune 500 where I held C Suite positions w/ 2 Fortune 500’s & led the team that introduced mag stripe cards to the marketplace, initiating the digital economy & revolutionizing the way the world does business, attempted LBO, ran for Congress, founded the first cloud based CPA firm in the country & built it to 7 figures. Clients in 46 states & 5 countries.

POWERFUL INTELLECT – Mensan • Genius IQ • Polymath • Creative • Innovative • Thought leader • Exponential experience.

Accountants, CPA’s

According to Google, there are 654,375 CPA’s, 29,000 attorneys, 210,190 CPA’s, 213 enrolled actuaries, 57,805 enrolled agents, 642 enrolled retirement plan agents and 60,463 people with other qualifications.Total tax preparers – For a total of 952,303 credentialed preparers. 155.8 million tax returns filed. Average tax returns, 164 per preparer.

Big 4
312,000 people work at Deloitte
219,281 people work at KPMG
270,000 people work at EY
276,000 people work at PWC.
1,077,281 Total

Fortune 500
The population of Fortune 500 companies is too diverse to come up with even a reasonable estimated average. Small Fortune 500’s have at least 500 accountants working for them. Larger Fortune 500’s have at least 10.000 accountants. For the entire Fortune 500 that average’s 5000 each.

Since the need for accountants is so great in Global companies, accountants & CPA’s are highly sought after.

Going Virtual & Other Experiences

When the Pandemic hit, we were already paperless & cloud based. We weren’t trying to be PAPERLESS. Nor were we trying to be REMOTE.  We were just trying to stay on the cutting edge of technology.

The first computer I ever saw was at the offices of my Big 5 accounting firm. It was a paper tape job. The second computer I ever saw, I actually mistook for a railroad freight car somehow misplaced into the basement of the high rise my Fortune 500 #254 employer had offices in.  It turned out to be a Burroughs mainframe computer. Burroughs was the big dog in mainframes in those days, but I was disappointed it wasn’t an IBM, the only computer company I had ever heard of. Your watch probably has more computing power than that behemoth. I’m still not certain whether the railroad car housed the computer, or if the railroad car WAS the computer. In any event, every month when the financial statements were printed, all the C Suite executives met in the basement to get the first P&L’s off the printing press. So as a young executive I was hob-nobbing with the CEO, CFO and all the CXO’s of a Fortune 500, about 15 of us in all. Actually, it struck me as foolish to require the entire C Suite (not called that in those days) stand around and watch a dot-matrix printer slowly crank out printed pages. But that’s what we did.

 IBM 360

Later when I was in the C suite of a bankcard company, we had dual IBM 360’s (probably the most successful computer IBM ever built) and later an IBM 370, which didn’t work out as well for us. The computers were sequestered behind glass walls on elevated floors to facilitate air conditioning necessary to keep those powerful computers from melting down to a puddle of plastic & metal.

After leaving the corporate world in the dust and running for Congress, I started my own accounting firm, where I bought two IBM System 3 computers. (My LinkedIn profile provides more info if interested.

it took all night to process & print one tax return. If you made a mistake, it took another day. Bookkeeping was more efficient, so we used them for bookkeeping, but we were actually just trying to stay on the front lines of technology innovation. We were certainly the first CPA firm in our city that used computers in any way. As a general rule, the CPA profession did not take quickly to automation. Two decades later I knew CPA’s who were still paper based and using adding machines (I still miss my adding machine.) and shipping off tax returns to be processed at processing centers. To this day, the largest CPA firm in the city I am now located in still provides paper copies of tax returns and charges extra for a digital PDF copy. They bought a building on a major street to increase walk-in traffic.

Today, the software is setting the pace, not the machinery, and certainly not your location. We have clients situated right next door to a CPA firm that uploads everything to us, half way across the country, for us to do their returns.

Everyone in our practice has a computer and two screens, but it’s the software where we outdistance our competitors. When the pandemic hit, we had 12 or 14 computers working with a server. When we got the stay at home order, it took us a day to move everything to Microsoft One Drive, and our server went the way of the horse & buggy. We added Textus & Microsoft Teams and that was it. But we could have done just as well without those new programs. Texting on our phones kept us connected. We hit the ground running & never stopped. When PPP came along. it gave us a boost in work load, but we were so efficient we pumped them all out like we’d been doing them for years. It disappointed us that it took the government quite a long time to decide how to tax them & the terms of forgiveness. If Chinese tanks pulled in front of their building, it would take them two weeks to decide what to do.

The biggest problem we had as dealing with 10-15 people scattered around the country without just walking down the hall and asking. It wasn’t that we weren’t communicating, it was that we were communicating too much. Everyone could text & call everyone else. We also had text groups for the Tax Team, The accounting & payroll team and the entire Ellis Team. Every time a message comes in I get a beep to alert me. Textus & Microsoft Teams also alert you to incoming messages. I remember one morning sitting in my home office listening to the messages come in. It sounded like a machine gun going off, and I knew I had to read every single one of them.

Our biggest problem was the communication was too efficient. Who would have thought? We may be unique, but everyone was closely connected and missed everyone, so they communicated back & forth about everything.

That’s our story, but we know for a fact, that was not everyone’s story. I have a family member that works for Spectrum, a local wifi provider. He said they were busy setting up offices at home for CPA’s. I have also stumbled across things on the web here and there about how CPA’s did not do well in the Pandemic. There were a lot of businesses that failed during pandemic, fortunately none of our clients. Those failures came from someone’s practice. But no one of them is willing to say, “We fell apart during pandemic.”


To this day, months into this thing, most businesses are not back to full staff.  Some of them still won’t let customers in their business. Every business that does is much less crowded than they used to be. Their business has to be off by half, or more. Nor are they stocked as well. Where I live, nearly every used car lot has gone out of business, and many restaurants. Before all this is over, more will fail. This is contrary to our experience. Our business actually increased during pandemic. What is everyone else not doing that we did?

Overall, the marketplace is moving backward, not forward. There is still a movement not to reopen schools, and I just got a notice on my phone that Sam’s is going to require masks again starting next week. My supermarket required masks two days ago. And where I live, nothing out of the ordinary going on.

Just between you & me, this is completely bullxxit. There are a lot of states reporting increased infections, but the fatality rate is lower than the ordinary flu. Plus there’s apparently some fraudulent reporting. In my opinion, this entire cluster-flux was politically motivated. If we can ever prove that, hundreds or thousands will go to the guillotine. I can’t wait.


Here’s the biggest revelation about innovation that’s ever come along.

Innovation does not build competitive advantage or long term success. The advantage of innovation is fleeting. Before long your competitors have copies and are beating you to death on price.  Business processes & customer service build competitive advantage and long term success. They make you invulnerable to competition.

Take a good long look at Amazon.