CFO Services

A virtual CFO (Chief Financial Officer) is an investment in the growth of your company. As every business grows, something happens. The more they grow, the more background, bureaucratic chores consume your time. If you don’t get control of this trend, it will eventually swamp your business & your dreams along with it. Outsourcing frees your time to focus on achieving key core business goals and planning. We pull the busy work off your plate.

This is why you went into business in the first place instead of just getting a job. We pull the hated, boring, tedious but necessary functions off your hands and give them to people on our staff that love doing it. Believe it or not, there are people who love doing it. You don’t love doing it. You should fire yourself and hire us. That will make us both happy.

In addition, our qualified CFO talent is available for advice & CFO consultation. He or she is a crucial member of your strategy team. 

We have significant experience as CFO with Fortune 500 companies. 

Virtual Chief Financial Officer

CFO is an outsourced service provider offering high skill assistance in financial & administrative requirements of an organization, just like a chief financial officer & his staff do for large organizations.

Ellis experienced CFOs, executives, accountants & tax professionals perform administrative, accounting & payroll functions can help owners, management, and board members solve financial management & operational issues by providing unique guidance and advice. See business services.

You can depend on experienced, high-level professionals to provide the financial insights you need to meet the challenges you face. We provide all the back room services you need; as well as advice, explanations & recommendations.

    • Financial strategy
    • Short & long term forecasting
    • Financial systems strategy & design
    • Budgeting
    • Projections
    • Facilitating & supporting financial reporting
    • Raising capital
    • Interim CFO services
    • Cash flow analysis & restructuring
    • Renegotiating vendor contracts
    • Restructuring client contracts
    • Ensuring pricing is aligned with company & industry trends
    • Analyzing commission structures
    • Supply chain management
    • Attributing costs to revenues
    • Accounting & bookkeeping
    • Payroll
    • Financial Statement
    • Bill pay
    • Collections
    • Data driven management
    • Capture & interpret critical operating data
    • CFO service
    • Streamline & simplify
    • Cash management
    • Remote office
    • Management financial statements
    • Compiled financial statements

Corporate Reorganization

Business reorganizing or restructuring is an action taken by businesses to significantly modify the structure or the operations of the company. This usually happens when a company is facing significant problems and is in financial jeopardy. But it often happens to enhance it’s competitive position, to protect its assets or to get out in front of a problem. It’s another tool in their tool box. Some examples of Global 500 companies:

Global 500 Re-orgs

  1. Forbes announced, Jeff Bezos is unloading a billion dollars of Amazon stock.
  2. In 2015 Caterpillar announced restructuring and cost cutting plans right before they were hit with a $2 billion penalty for tax fraud.
  3. In 2018 John Deere announced realignment of leadership responsibilities.
  4. Humana’s CEO-founder had twice before had shifted the company’s course to a brand-new industry.
  5. Chase Manhattan Bank and Chemical Bank used their merger as an opportunity to both reduce operating costs and achieve an important strategic objective.
  6. Scott Paper‘s chief executive officer (CEO) decided to implement the layoffs quickly—in less than a year—to minimize workplace disruptions and gain credibility with the capital market.

We’ll probably never know why they reorganized. What matters is they reorganized for some reason. Despite the massive size of Global 500 companies, and despite the difficulties presented by re-organizing a massive company, they are not afraid of re-orgs.

Privately owned business re-orgs

Privately owned businesses seldom re-organize.  It’s just not one of the clubs in their bag. They’ll ride their present structure right into the ground even when the company is collapsing around them.

Never fall in love with your company. You can fall in love with your business. A business has value because that’s how you make money. A company is a legal creation for operating a business. Nothing more & nothing less. Most people don’t think this through well enough and get the two confused. A few years of operating your company like it was your business can put you in vulnerable position.

If most companies lose a lawsuit, they could lose everything they’ve been building all their lives. If they win, the litigant can strip your company bare. We plug that hole through business re-org by removing everything of value from their operating company and putting it in an LLC that does no business what-so-ever. It never does anything to get itself sued. If everything of value is in the LLC, and the mothership loses a lawsuit, you can just shutter the doors and start over again with a new company the very next day with everything of value behind an impenetrable LLC barrier. The LLC just needs to license it to your new company, and you’re good to go. Since you own both of them, there are no barriers.

Business restructuring and reorganization is one of our strengths. I personally have been involved in two Fortune 500 re-orgs & countless re-orgs of private companies.  Not all of them have followed the approach we describe in this post. There are many ways to re-org and many things a business wants to accomplish. Every private re-org I was involved with succeeded without repercussion. We re-org our clients frequently for tax purposes. We have significant expertise in this area.

An actual example.

A few months ago I got a call from a client who was being sued by a marketing company. They had entered into a contract and the marketing business failed to perform, so my client quit paying the marketer. But there was a contract, and the contractor sued the company, but not the individuals. There was no way to sue the individuals. Their lawyer was vigorously defending the suit. He warned them it could cost several thousand dollars to defend suit. He also warned them, they could lose the suit.

For some reason they called me.

  1. I questioned them and discovered they hadn’t recorded any business assets. Their company was basically a vacant shell. There were assets, but no assets had been recorded in the company. They were still owned by the owners.
  2. I advised them to abandon the company.
  3. I also advised them to simultaneously form two new companies, an LLC to hold company assets, and a corporation to operate the business.
  4. I then advised them to legally transfer all the business assets into the first new company (an LLC), including web sites, trade names, trade secrets, and everything essential to carrying on businesses. Since they had never trademarked their name, I suggested the do that in the name of the LLC.
  5. Simultaneously again. I advised them to open new bank accounts in the name of the new corporation and begin conducting business in the new corporation.
  6. I also advised them to run this past their lawyer. He said it would work. The only thing he suggested is to file bankruptcy on the old company that had failed. That was a good final touch.
  7. It did work. The marketing company, rightly or wrongly, was got nothing but legal fees.

Tax savings

This methodology is one of my favorite re-orgs. It is used to protect vital assets and to change the character of earnings. It can also be used to eliminate C corp taxation by removing earnings from a C corporation and turning it into royalty income on the personal returns.

That eliminates an entire level of taxation.


Predatory Taxation

The U.S. Code is divided by broad subjects into 53 titles. Title 26 is the Internal Revenue Code,  commonly referred to as the tax code.

The tax code is unique among all codes. The other 51 codes stand as they were written, one code is reserved and 50 of these codes are stable. The tax code is the exception. No other code is continually interpreted by government agencies (IRS) or court cases. Only the tax code. The tax code is unique in this respect. It’s a living, breathing body of law continually reinterpreted administratively and by the courts.

To a lesser extent, state tax codes are subject to the same phenomena.

That is not a bad thing. The constantly changing nature of tax codes opens the door for strategists like me to legally keep your taxes under control. But predatory practices sometimes make temporary advances. But so far, they have always been stopped.

Even if a tax professional would learn the entire 77,000 page to the tax code, in a year there would be so many subtle changes, they wouldn’t recognize it. That means everybody has to be very careful how they deal with federal & state tax authorities.

Predatory taxation happens from time to time.  Here is an example of how the Supreme Court responds. Our republic is safe.

Every tax authority, at one time or another, takes a predatory stance. When that happens, people without hundreds of thousands of dollars to fight a hostile and predatory stance can be destroyed. This happens more than it should.

Personal animus for clients or professionals defending their clients causes predatory behavior more than you might expect. The IRS took a dislike to one of my clients for some unknown reason. I didn’t even let him talk to the IRS. Never-the-less, they disallowed a $100,000 deduction and wouldn’t back off. We pushed the issue all the way to the courthouse steps before the IRS relented. Finally, outside the tax court doors, ten minutes before the case was to be heard, the IRS attorney relented. Had it been the revenue agent, that never would have happened.

Our strategy was to drop the case rather than spend hundreds of thousands of dollars fighting to save $100,000 in tax. That’s the position predatory taxation puts you in. And believe me, every IRS revenue agent knows all about how the game is played.

Our only defense against that treatment, is the Supreme Court.

As far as I can tell, revenue agents aren’t subject to disciplinary action for being overly aggressive with taxpayers. They may claim they are, but I’ll never believe them. Your only recourse is court, and most taxpayers can’t afford that option.

A recent decision on predatory taxation reassures us the Supreme Court has our backs against predatory taxation.

States can be predatory just like the IRS. In my mind, the state of California is the most predatory.  It is so bad that the CA tax authorities have been losing cases in the CA Supreme Court over CA’s attempt to push more & more into interstate taxation. This particular Supreme Court case does not involve CA, but it does close a loophole that predatory states were using to push more into predatory areas.

Everyone should read the article to understand the predatory nature of tax authorities when they are not kept reined in by close observation and regulation.  Predatory taxing authorities are very powerful and very scary.

Here’s the link to Forbes. The Forbes article is well written, interesting and even brings Roman law into play as the originators of the NEXUS issue that interstate taxation is based on. As it turns out, NEXUS is a Roman word. Subsequent quotes are from the Forbes article.

“Typically, a state government will enact a statute that identifies who it will tax and what it will tax.  When it comes to taxation of trusts, there are several moving parts. There is the person who created the trust.  There is the beneficiary. There are the assets and income of the trust. And, there is the trustee. Each might be located in a different state.  It would seem that four different jurisdictions are licking their chops for tax revenues. This is where “nexus” comes into play.’

There were several long standing Supreme Court rules the states were ignoring. I’m not going to repeat them here, but you can read the article. I am going to continue quoting from the article below.

“In spite of these long-standing rules — upon which there is about 150 years of US Supreme Court rulings — some states attempt to tax without sufficient NEXUS.  Unless a taxpayer protests and asserts there is not sufficient NEXUS, the state gets away with it. And, often, the dollar amount in play is too little to fight for.  But, occasionally, there is enough money in play and the taxpayer victim fights. (I use the harsh term “victim” because these states offend our cultural sense of fairness and equity when they pull this stuff in light of the US Supreme Court’s long standing position.)”

“In recent years, taxpayers who have asserted a lack of nexus and due process have won . . . with their own states’ supreme courts overturning the states’ offending statutes.  But, this has occurred one state at a time. What taxpayers and tax planners have wanted was a newer US Supreme Court ruling that left no doubt . . . involving a state that had a ridiculously weak case . . . to finally put the issue to rest.  North Carolina gave it to us.”

“And this is where predatory states got involved. Generally, trusts the taxes that were levied against trusts using inappropriate methods violating state NEXUS rules did not involve enough money to justify bringing expensive suits. And even when the tax justified a lawsuit, the case was brought in state court. So while this issue was working it’s way through state courts, other states were still being taxed in a predatory manner. ”

Finally two cases found their way into the Supreme Court and the issue was decisively decided unanimously. Sotomayer wrote the unanimous opinion.




Wise Words From A Wise Man

“Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one’s taxes.”

“Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands.”

(Judge Learned Hand.)

From <

Hello Depression

Obamacare gives U.S. Firms $3000 incentive to hire illegals over native born workers.

This will obviously be bad news to working Americans. Watch people lose jobs to illegals and wages plummet. Can this be what Democrats, Republicans and the big employers want? (Chamber of Commerce, Zuckerberg)? Apparently so. I’m hearing no uproar. None at all. they’re playing Russian Roulette with voters. They’re liable to get one in the brain.

Everybody, let’s sing.

If you want to be happy for the rest of your life, have a cash flow business on the side.

It lost a little something in the translation, but that is the best advice I can give you. You can open a network marketing business for under a thousand dollars. Great way to learn how to do business. Also has a high upside. But, for your own good, get something going on the side, even if you’re cutting hair in the alley.

Just saying. Then you’re your own boss in control of your own destiny.

And that’s just good news.


Inversion Joke (We hope)

This is getting …

You know, I don’t know the word to use here … funny … ridiculous … pathetic?  Plug in whichever you’d like. I guess I’ll opt for pathetic because this reminds me of a spurned lover shaming his former lover to get her back. “You tramp.” Never worked yet. Never will.

Background data: Inversion describes the practice of a domestic company buying a foreign subsidiary and switching their tax base from the U.S. to the foreign country. This practice has been picking up steam and several large U.S. companies have already done it. Several government solutions have been mentioned, among them an Obama Executive Order.

Reuters featured article of the day …


WASHINGTON (Reuters) – A senior U.S. senator said on Thursday he has written to the chief executive of Hospira Inc and urged the drug and medical device maker not to move its tax domicile abroad to save on U.S. taxes.

The Senator is Dick Durbin, number 2 Democrat in the Senate.

“Please don’t leave. Sure our taxes are high, but please … “

What did these idiots think? Everyone would just go along with the biggest tax increase in history? Companies don’t have the sentimental attachments to their country of origen that individuals have. (Perhaps you’ve noticed, more individuals have also been abandoning the good ol’ USA for tax reasons as well. Inversions aren’t some kind of anomaly. They’re part of the pattern). Companies have to answer to shareholders, and can even be sued for failure to take every possible opportunity to increase shareholder wealth. One of the benefits of new fangled B Corps is that it allows corporations and their management to make contributions without having to fear this repercussion. (There are other drawbacks to B corps, so look before you leap.)

One of the characteristics of a corporation, developed by consulting firms like McKinsey and academics like Porter, is this … the primary goal of a public company is to maximize shareholder wealth. Period. If they knowingly fail to do that, they’re subject to a lawsuit. 

Senator Durbin is making this argument to management. “We want you to stay in the U.S. and put your personal wealth at risk of getting wiped out in a lawsuit by stockholders for knowingly subjecting the company to the higher U.S. taxes.

This is a losing argument.  If there is an inversion alternative, every public company in the U.S. will be obligated to take it. Or get sued. 

This is as certain as (1 + 1 = 2)

This discussion is going on in board rooms all over the country. Every tax savings opportunity must be taken. If you ignore it, you may get sued personally. No board member wants his personal fortune wiped out by a lawsuit for voluntarily squandering shareholder wealth by voluntarily paying more tax than the law requires. Before this is all over, every company in the country will be looking at possible inversion opportunities. This is the driver behind that.

I cannot speak for large multinationals and the Fortune 500, because it’s been some time since I worked in that area. But I suspect they are fully aware of this and, as far as I know, their tax strategies reflect that. I described in another post how Apple saved $400 billion with innovative tax strategies and how Congress responded by conducting hearings to humiliate them. We should have realized then that the government considers it our patriotic duty to pay more tax than the law requires. There is a video of the Congressional hearings out there (I’ve seen it on Business Insider a couple of times) with Tim Cook denying anything illegal. Apple was never charged, It was just a dog and pony show intended to embarrass them into abandoning this legal tax strategy. The government has been lobbying the EU to get them to outlaw this practice as well. If you have friends like these, who needs enemies?

Our largest companies obviously have their act in order, but their little brothers, the closely held companies are another matter altogether. They have long since sacrificed cutting edge tax strategies in favor of a long and comfortable relationship with their accounting firm. If they like most firms are in the practice of slapping the same ol’ numbers on the same ol’ forms year after year, the question is why?


Government Response to Tax Inversions

Twofold response.  

More adventures in la la land.


Remember TAX INVERSIONS from a couple days ago? The practice of buying a foreign company and moving your tax base to that country? So far this year, nine TAX INVERSIONS have taken place, and the government is beginning to notice. The logical response would be … “whew, we’d better cut taxes” … but that isn’t the response coming from the political class. The response is more along the lines of … “immediate action is needed … we have to put a stop to this … double up your fists, get your guns, we’re gonna bust some heads.”

The fact that taxes are so high they’re driving business away, doesn’t even enter their mind. Neither does it enter their mind that the ONLY way to solve that is to CUT TAXES. If we have the most expensive taxes in the world, everyone will leave eventually. Outlawing TAX INVERSIONS will not solve the problem. Google, Apple, Amazon, Caterpillar, etc. found other ways to do the same thing. There is always another way. Once a company starts looking for ways to save taxes, they will find ways. If that’s illegal, they’ll leave. Stopping TAX INVERSIONS will not stop the flood of companies abandoning the United States. You can only do that with a tax cut.

Second …

Orin Hatch’s response to TAX INVERSIONS is to REFORM TAXES.

This is another danger sign.
Here are some basic definitions to help you understand government speak about taxes.
TAX REFORM – this is tricky … to the person hearing the phrase, it means CUT TAXES … but to the person saying it, it means INCREASE TAXES.
TAX REFORM is just a tricky way of saying TAX INCREASE.

As I said on my earlier post … will the last person out please turn off the lights?

Good grief

This just won’t go away.

IRS seeking help to destroy 3,200 more hard drives

Remember how many times I have talked in these emails about the IRS attitude? This is a good example. Read it and weep.

This started as a political controversy about Lois Lerner’s missing emails. She was head of the IRS, but she’s not there any longer. But when this kind of in-your-face attitude comes from the top levels of the IRS, it’s worth reporting. And since mine is but to do or die, I’m going to report it.

Henceforth, this is all about the IRS attitude.

Some states are this bad as well. Colorado and California come to mind. So consider this slinging mud at all of them.

Let me reiterate … Probably a year ago, in the midst of a political argument (stress on political not official), requests were made by the House of representatives for certain emails. After ignoring it for some time, suddenly came the announcement that the emails in question had been inadvertently destroyed. Along with the hard drives where they were located. (Coming from someone who deals with this stuff all the time, this didn’t sound plausible.)

But, one of the responses was to search the computers of people who may have received a copy.

Then yesterday came the news that some more hard drives had been destroyed.

Now today comes the news that the IRS is seeking outside help to destroy 3200 hard drives.

Whoo. What’s that all about?

Even if there is nothing wrong here. Even if everything is on the up and up, the IRS really doesn’t give a squat. They don’t care what you think, or what the public thinks or what the House of Representatives think or what the law thinks. They could care less. They’re the biggest gorilla in the jungle and we can all go twiddle our thumbs.

Remember I told you one of our tax cases had gone to court? … but the case had been negotiated away in our favor before it actually got to court? Well guess what? A few days ago, that taxpayer got a bill for $75,000 of penalties. Isn’t that cute? “OK, you don’t owe any more taxes, but you do owe penalties.”

For doing nothing wrong? I mean if he didn’t owe tax, how could they penalize him?

If you give people enough power to do what they want, they will do what they want.

More Crashes?

Regular epidemic over there.

Horror upon horrors. These are the people who are supposed to be fairly and accurately collecting our taxes and protecting our private information.

In case you didn’t know it, as professional tax preparers, they make us keep every single email … just in case they want to prove something. This isn’t the first time I’ve said this, but they can’t even do what they make us do.

One thing we know for certain, Lois Lerner is not the Lois Lane we all came to know and love in the Superman comics.


A reader suggested she may be Lex Luther, another of the double L’s from the Superman comics.

Pretty fishy

Federal Tax Revenues Set Record Thru May; Still Running $436 Billion Deficit

Size of Income Tax Drop Surprises U.S. States.

Click to access 2014-06-12-Special_Report.pdf

Can’t be both ways … same taxpayer base. Of course we did have a federal tax increase, but could that set records while the same taxpayer base is surprising the states with a drop in state taxes?