18: Fascinated by Payroll with Charles Read - Steve Preda Business Growth

Charles Read is a serial payroll entrepreneur and the CEO of GetPayroll. He is also the founder of Custom Payroll Associates and Payroll On A Budget and has over 40 years of experience in the industry. Charles is a US Tax Court Practitioner and a United States Marine Corps veteran.

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Fascinated by Payroll with Charles Read

Our guest is Charles Read, who is a serial payroll entrepreneur. He’s the president of GetPayroll, a payroll and HR advisor firm serving companies with 10 to 1,000 employees. Previously, he was the founder of Custom Payroll Associates, a CPA payroll firm of which the CPA part, he spun out into a company called Cheyenne & Reed, and he kept the payroll. During this time, he also set another company called Payroll on a Budget, which was serving his customers. Prior, he started his career with Texas Instruments as a financial analyst. He’s a Marine. He was in the U.S. Marine Corps, and he is a graduate of the University of North Texas, where he got his bachelor and MBA degrees. So welcome to the show, Charles.

Steve, it’s a pleasure to be here. Thank you.

It’s great to have you. So, Charles, tell me a little bit about you. You have an interesting background. It seems like you are well-reached on this payroll business, but you’ve done different iterations of it. So tell me a little bit about how did you start this business and how do you become a payroll entrepreneur?

I’ve been in business, I started working for my father in his business when I was six years old. So business has been what I’ve been all my life. When I was in school, I actually started a business making nose clips for my daughters who were synchronized swimmers and sold them to other synchronized swimmers around the country, around the world. So I’ve always been in business.

But when I got to about 40, I’d been working for major corporations and realized I was never going to run a major corporation. I didn’t have the political skills. I was unwilling to stab people in the back and throw them off the ladder. So I figured if I was gonna run a business as my father had done, I’d have to do what he did and start my own. So being a CPA and an MBA with lots of experience, I started a business. I actually bought a franchise. The franchise went belly up a year later, and the wife and I just took it and ran with it.

That’s been almost 30 years now. So, you know, being in business is how I was, you know, born into it and grew up in it. It just seemed natural to have your own business. So, for all those who have started one, you know, great. Bring your kids in. It’s fun. Now, I never could work with my father. He was a rather authoritarian naval officer and we didn’t get along all that well in business. But later on in life, we got along fine. But it’s just what I was born to I guess and it’s been a great run. I’ve enjoyed it immensely.

So you think that you bought the franchise and then the franchise ran out of business. So was your franchise company was the Custom Payroll Associates or CPAI?

It was actually Financial Express, which was a mobile accounting service. And the board, I was the COO at the time, I’d come from Pennies, and I was the COO, and the board was after the franchisor to sell off the original office and concentrate on selling franchises. So I bought that and took it over, and was having a lot of fun, and it had an integral payroll service bureau in the franchise.

Then when the company went, the franchisor went belly-up, we changed the name, incorporated, and just moved on and built the payroll. I enjoyed payroll, I enjoyed taxes, I enjoyed accounting. Later on we took on a partner and my wife retired. She passed away a few years ago, but we had 45 years of marriage, it was pretty good. So the partner wanted more autonomy himself, so I sold him the accounting portion, kept the payroll, and we’ve been growing it leaps and bounds ever since.

And he kept your name in the business because it’s called Shane and Reed, right?

We’d incorporated it separate, and when I sold it to him, he kept the name. So I’m part of that one, too.

You have to make sure that he doesn’t get into trouble and tarnish the name.

He still often is here in the same building with me, so I see him every day.

That’s awesome. So what happened with the payroll on a budget? I’m particularly interested because it looks like it’s right below where you position GetPayroll. So GetPayroll is 10 to 1,000 employees. Payroll on a budget is 1 to 10 employees. And I’m interested because I’ve done something similar with my M&A advisory business. I thought, wow, there’s a big market below us, let’s start a business brokerage firm. And that didn’t go anywhere. And I just wasted my energy and my attention on it. And I had to just wind it up at some point and go back to the M&A, which made the money. So what was your experience with this company?

Well, we wanted to set up a budget operation for small businesses. And it was set up where it was very little contact, mostly online, no handholding, no lots of touchy feely. Well, over the years, the technology changed, everything was easier to handle electronically. And we found that they really needed more on hands than some of the bigger companies. So we weren’t able to continue to do it for a lower price, so we just rolled it into our regular business, up the price to standard, and moved on. I think we lost one client when we did that.

Everybody pretty much understood that it was just something we couldn’t afford to do at that price and still give them the hand holding they wanted. So it worked out for everybody, but it just, it’s one of those things we wanted to try a low cost alternative and it just didn’t work because they needed the hand holding and the personal service that’s the hallmark of GetPayroll. So when we offered them that at a regular price, they all said, okay, except one guy who’s, you know, wanted to nickel and dime everybody over everything, so be it.

No, it was exactly the same for us. We thought that we could provide the streamlined version of the service, but actually they needed more hand-holding because they were less sophisticated and it just didn’t work.

Exactly the same experience.

Expectations were unrealistic there on both sides, I guess.

Yes.

Okay, that’s interesting. So why payroll? What excites you about being in the payroll business? Some people might say, I mean, I started life as a CPA with KPMG, so I guess I have the right, I kind of pull your leg on this, but what, and you can ask me why I became a CPA, what excited me about it, but what excited you about being in the payroll business?

Well, the payroll business is fascinating. First of all, you’re dealing with businesses, not consumers, which you’re dealing with an audience that more understands business because they’re in business, so they wouldn’t have payroll. You’re dealing with business. You’re dealing with government. You’re dealing with 15,000 taxing authorities around the country. There’s a million things going on every day. Things change. It’s constantly interesting. It’s constantly changing.

The last year, of course, has been just crazy, as I expect the next few will be as well. So it’s always interesting. There’s always something new. There’s always something exciting. There’s new clients. There’s new things. There’s new taxes, there’s new opportunities, the IRS makes mistakes, there’s opportunities to advocate for my clients effectively. Fighting the IRS for clients, it’s kind of like playing high stakes poker with somebody else’s money. You get all the fun and none of the risk. Particularly when I was younger, I was very, very much one for the fight, being a Marine and everything else. So the chance to take on the IRS on a regular basis and win is just fun to me.

I bet it is. So how do you beat the IRS? How do you go about this? Obviously, you cannot tell me in five minutes, but in a nutshell.

Frankly, you know more than they do. You study more, you learn more. I’m a U.S. Tax Court practitioner as well, which means I can represent clients in tax court without being an attorney. But I had to pass basically the tax court bar evidence, ethics, procedures, and so on. So I’m very, very educated in payroll and payroll taxes and payroll tax compliance. I do this all the time. I study, I read, I take courses, I get education, I practice, I go to court. I do all these things constantly.

The IRS is lax budget, lax training, and it’s not, for many people, it’s not the most desirable job. So you get a class of people that may or may not be the very best possible people in the world. Now, most of them are nice people. Don’t misunderstand me. I deal with them all the time and most of my life. There’s the occasional one that’s a real loser, but for the most part, they’re good people. I mean, I go up to D.C. and meet with the IRS as part of the IRS Advisory Council.

I’ve met the new commissioner. I’ve had lunch with them a couple of times. I’ve met all the commissioners of the operating divisions and their deputies, lots of people. For the vast majority, good people. New head of OPR is a friend of mine. That part’s fun, but I study and I read and I learn and I practice. Thirty years of doing this, I’ve gotten more experience and more education and more knowledge than most of the people that I deal with because they’ve been moved from area to area in the IRS and they haven’t spent thirty years unemployment taxes.

I have and I’m going to court and i filed tax court petitions and I’ve litigated cases, I’ve learned i read the IRS manual, I read the procedure manuals, I read the IRS I read tax law, I read congressional bills. So I’m just more knowledgeable and more experienced. And that gives me the upper hand. A businessman trying to fight the IRS, the analogy I use is if you take the best Brazilian soccer player in the world, somebody like in my day and age, Pelé, who was an incredible athlete, okay, wonderful soccer player.

You know wonderful person you take and you put him in a New York Yankees uniform and stick him in Yankee Stadium and tell him Okay, you’re going up to bat and then you’re gonna go play the outfield. He’s lost He doesn’t know the tools. He doesn’t know the playing field. He doesn’t know the rules. He doesn’t know Diddley he’s a great athlete but he’s Not in his ballpark. That’s businessmen. They may know their business, they may be sharp, educated, knowledgeable, hard-driving, successful. But you stick them in front of the IRS, it’s like sending a six-year-old to the Marine Corps. It ain’t going to work.

So, Charles, why should I outsource payroll? So let’s say I’m a company, I have 25 employees, I’m using all the technology available in the cloud, why does it help me to outsource payroll?

Okay, you’re doing all this, you’ve got it all set up, the IRS makes a mistake and sends you a notice demanding taxes, penalties and interest. What do you do you don’t have any idea what to do you don’t even know that the IRS penalize you for a simple mistake that you made you know they tell you you all this money to you screwed up or they tell you you know this money cuz we screwed up and we think you did you don’t know what to do you don’t know who to call you don’t know what letters to write, you don’t know how to fight this.

This is what I do every day. Okay? I don’t make widgets, I don’t make cars, I don’t make computers. I’d be lost, but I know tax law, I know employment law, I know the IRS. This is what I make my life at. Now, you can take payroll, you can do a good job producing check so does my competition but it’s like insurance you have insurance on your car you have insurance on your house you may have insurance on your life well you don’t expect your car to be in an accident you don’t expect your house to burn down you don’t expect to die very soon we’re payroll insurance we make sure that if something goes wrong, we fix it. If the house burns down, the insurance company pays you. If the payroll screws up, the IRS screws up, you screw up, we screw up, we fix it at our cost. It’s a guarantee. It’s insurance.

Basically, your business model is that you only take on clients who are permanently your clients as opposed to having people who have runoff issues and come to you to buy your hourless service?

We prefer permanent clients. I mean I have clients that have been with me 30 years. If somebody has a tax problem, an employment tax problem, and they want to come to me, yeah I’ll take care of it. There’s a fee. If you’re a regular client, it’s just included your monthly fee. There’s no additional fee fixing IRS problems. If you got an IRS problem with employment tax, you need an expert, my hourly rate is not cheap.

So, what’s the advantage of having employees as opposed to just employing contractors? So is there…

That’s not your choice. Okay, you don’t get to choose. There’s laws. And the IRS is very picky about those laws. If you put them on as independent contractors and they’re really employees, be prepared for taxes, penalties, and interest that may put you out of business.

So how do you know whether they are employees or how do I know if I have to turn my contractor into an employee?

Well, first of all, there are 20 common law rules that are the basis for that and it’s a preponderance of those rules that you have to go through. There’s control issues, there’s profit and loss issues. If they don’t get to control their job, if they can’t substitute their friend for their job, they’re probably an employee. I’m a CPA. You bring me a tax return, I have Joe in the back do it, put my name on it and sell it and Charge you for it. That’s my business Do you make a profit or loss does your employee? Does your worker get paid a set sum? Okay.

Now does he have costs that can vary if his costs can be more than what he gets paid? He takes a loss. He’s probably a contractor Okay, if he’s getting a set sum and he has no costs other than his time, then he may be an employee. Now you can file an SS8 with the IRS and they’ll tell you whether he’s an employee or a contractor. And I promise you in 99% of the time, they’re going to say he’s an employee. They would prefer everybody be employees because the compliance rate for taxes is much higher than it is for independent contractors.

Now the Labor Department has just proposed new rules about what’s an independent contractor and what not and what isn’t. And those have a real kicker in them. If they go into effect, it’s the real, what really goes on in a company, not what’s on paper. So if you say, well, he’s a contractor because he’s allowed to do these things, but he never does those things, the IRS is going to say, that doesn’t matter because he doesn’t do them. And that’s a real new kicker.

Whether those rules go into effect or not, I don’t know, particularly if there’s a change in the administration. And then every state has different rules. So you have to be careful. California has their own rules. They passed a law that was overturned by a referendum. It changes all the time. So now Uber drivers are now back to being independent contractors in California. They probably aren’t going to be anywhere else in the end, and they probably won’t be in California in the end because law changes, administrations change, people change, technology changes, things change. And you gotta be on top of it.

And if you don’t live it, like I do, you’re not on top of it, you can’t be. I’m also a, or used to be, a financial advisor. I had a series seven and 66 licenses. I could do anything. I was a registered investment advisor. I gave it up because I couldn’t keep up with all the changes in payroll and payroll tax laws and employment tax laws and taxes and keep up with investments. My money is, I have an investment advisor to handle it. I don’t have time to keep up on it and keep up on payroll. It’s another reason I gave up the accounting. I can’t do both and be effective in both. There’s too much going on.

The age of polymath is over. So what about these PEOs, professional employment organizations, I think they are called. Yep. And so how do they try to get around the employment issue and are they succeeding?

Well, a lot of them aren’t, and the states have come down on them and they’re best co-employers. Because if they file an unemployment claim, the employer is going to pay the taxes in the end. The original purpose of PEOs or employee leasing as it was originally was to avoid unemployment taxes. It was a way of shifting the tax burden illegally. A number of the founders in the PEO industry went to jail over it and the law was changed to prevent that.

Then the next thing was, well, we can get you a better workers’ comp rate because we have all these people. So if you have a bad comp rate, we’re going to throw it in and you’ll get a better rate. Well, the workers’ comp companies caught on to that and now they do individual underwriting of the individual companies for workers’ comp loss. Well, the next thing was we can get you a better medical plan because we have thousands of people to negotiate.

Well, that’s fine if you want the Cadillac plan that the PEO offers, but if you want a Ford or a Chevy plan, they don’t offer that. Then on top of that, they charge a fortune for their services. The reasons why the big guys, ADP Paychex, are really pushing the PEO, because it’s so profitable. Why is it profitable? Because they overcharge you. Help yourself. We have not found any instance where we can’t go in with our partners and provide a complete comprehensive solution for workers comp, health insurance, payroll, and HR, and not save at least a thousand dollars per employee per year. So if you’ve got 30 employees and you’re with a PEO, I’m telling you, you’re wasting $30,000 a year. You’re just throwing it away, but that’s up to you.

Okay, that’s interesting. So what about this pandemic? Do you see any changes that this pandemic is catalyzing in the employment area? So many people are working from home. Isn’t that going to change the mindset of people? If I can work from home, then it’s more important what I deliver, that I’m present. And if I don’t have to be present, maybe I can have a side gig. I have two friends who basically had full-time jobs and they started a side gig.

One of them started a residential construction company like spec construction, and he grew it into a real business and he could afford to quit his job. Another one, he built a staffing company on the side and then I think he’s still doing both, but he doesn’t have to be there all the time. He’s a sales agent for a lumber company and he built a successful business on the side and he’s got the fixed cash flow every month and he’s got the profit potential as well. So do you see this changing employees’ desire in terms of how they want to run their own career?

Absolutely. I made a comment to a blog the other day. What was going to be a major impact of employees coming back to the office? Well, they’ve been successfully doing their job without micromanagers, without managers to speak of on their own time at their own pace. They’re not going to be happy coming back and being told eight o’clock, five o’clock, half hour for lunch, no breaks, another cup of coffee. No, you can’t have coffee. What do you mean? I’m used to doing this in my pajamas.

I’ve been successful for the last year. You’re telling me I can’t do that now? What the hell are you talking about? They’re not going to put up with that stuff. They’re just not going to. They’ve been successful, they’ve been doing the work without all the poor management, and there’s a lot of it in this country, so why should they put up with it now? Plus, yeah, the availability of side gigs now, doesn’t everybody have one? And that’s a lot of where the world is going. Okay, all these things, it’s going to make a difference.

And then, of course, unemployment costs for employers are going to go right through the roof. I’ve seen increases as much as 500% in some states. Okay? So the costs are going to go up. In 2022, FUTA surcharge is going to come back on in at least 20 states already, and probably a great deal more. So the costs are going up, and people now have the freedom. You know, that’s one of the reasons I went into business, was my own freedom. I want to take the day off, I take the day off. I want to come in late.

If I don’t want to come in at 11 o’clock, I don’t come in at 11. Of course, I may have to work till midnight or work Saturday, but it’s the freedom to adjust my own schedule. And now you’re taking people and you’re going to say, no, you can’t go pick up the kids. You can’t stop for this. You can’t eat when you want. You can’t do what you want. You gotta wear a tie and a coat, whatever. No, I’m not gonna do that. There’s gonna be lots, lots of kickback.

So, is this an opportunity or is this a threat to get payroll?

We’re finding the whole thing an opportunity. We’re getting more inquiries because a lot of people are going into business. And when you go into business, if you incorporate, you’re an employee. You’ve got to have payroll. I had a young lady in here this morning. She was, another guy was in and we were doing a podcast and she was with him and I asked her what she did. Oh, she’s a nurse practitioner but she’s gone out and started her own practice.

I said, “Did you incorporate?” She said, no. And he said, “Oh yeah, you did, you’re an LLC.” I said, “Do you file as an S-corp?” She said, yeah, she does. I said, “You’re an employee?” And she went, “What?” I said, “Yeah, you’re an employee and you have to take W-2 compensation.” She said, “I didn’t know that.” I said, “Yeah, here’s my book. Okay, read the chapter on who’s an employee and you’ll see you’re an employee in that entity.” So we’re getting a lot of people who have turned their side gigs into profitable operations. They’re now employees because you want to be incorporated for tax purposes and liability purposes. Okay, it makes no sense not to. So we’re getting lots of new business. We’re getting lots of people who have been laid off and taking their 401k and started something. So we love it. We like small businesses.

So, if I’m an entrepreneur, I’m starting my business, then what’s the best business form that I should choose? Should I be as an LLC or a C-Corp, an S-Corp? What are the pros and cons?

Again, we go through that in the book, and Chapter 1 is the entities, and it describes the four major entities, sole proprietor, corporation, LLC, partnership, and the pluses and minuses of each, particularly in relation to payroll. My personal choice is an S-Corp. Second choice would be an LLC filing as an S-Corp because you save a lot in taxes by doing that.

Those are the ones I recommend. Sole proprietorship, I’d never recommend just for the liability purposes. Somebody sues you, they can take your house, your car, the clothes off your back. A partnership is the worst entity for taxation of all the entities out there. So an S-Corp or an LLC that files an S-Corp, a C-Corp is double taxation and it’s just until you get big it’s not something you want even consider. So that’s my take.

What about the jurisdiction? I mean a lot of talk about other companies being safer for liability protection, so asset protection. Is this still the case? Do you advise people to pick their jurisdiction or that’s a thing of the past?

Well if you’re a big company, Delaware has been the obvious choice for decades. Nevada is a close second, if not first at the moment, because the laws there are better. But if you incorporate in Delaware or Nevada, you have to pay taxes there. And you pay taxes in the state you’re operating in. So in most cases, it’s just easier to incorporate in the state you’re in. I mean, if you incorporate Nevada and you work in California, you have to register in California, you have to pay California corporate taxes regardless.

But then you pay Nevada taxes on top of it. And California subject you to California law for everything you do. That being said, Nevada is a good place to incorporate. Delaware is a little more expensive, but a very legally favorable place. But for most small business and entrepreneurs, I would just do it in the state you’re in because you have to pay that anyway. You’re going to end up paying double fees if you don’t.

That’s cool. So I mean, you are very well versed in tax laws, obviously pay, especially payroll. What do you see are being the major mistakes? What are people missing? Entrepreneurs that run a business, you know, 10 to 100 employees, where do they leave money on the table?

Well, the biggest thing that entrepreneurs don’t do is pay themselves W-2 income. That’s gonna come back and bite them. If they’re a corporation or LLC, finance corporation, they have to pay themselves W-2 compensation. They don’t have a choice. The next big thing is, Oh, we’re just going to hire independent contractors. Well, you don’t get to make that choice. Like we’ve talked about. They’re either employees or independent contractors and you don’t get to choose.

And a lot of these small businesses, entrepreneurs, I’m just going to pay them cash. No! You’ve got to follow the rules and follow the law and follow the forms. If you don’t, the IRS and the state is going to get you. All it takes, if you have all these independent contractors and you tell one you don’t need him anymore and he goes down and files for unemployment within two weeks the unemployment auditor is going to be out and go through your books and they’re going to tell you that all these people are employees and all the money you owe plus penalties plus interest to the state and you know if you’re not nice to them they’re going to and the IRS will come in.

So it’s just a serious, serious mistake not to classify people correctly. Now, a lot of companies don’t. Department of Labor estimates that 70% of US businesses have a classification problem, either independent contractor versus employee or overtime versus non-overtime. You gotta know the rules and you got to follow them. If you got questions, call me. I’ll talk to you. If I can answer it off the cuff, I do it for free.

So, Charles, I know a lot of entrepreneurs who have LSCs and they don’t think of having to pay themselves W-2 income. Most of them just take distributions at the end of the year or they lend money during the year to themselves and then they turn it into distribution. Is there anything wrong with that?

Nothing’s wrong with that legally. Absolutely nothing wrong. But they are a sole proprietor for tax purposes because they’re a disregarded entity. And if that, they’re overpaying taxes. If they will talk to their CPA and say, is this the most tax advantage way to doing this? If the CPA understands small business, he’s going to say no. You need to file as an S-Corp, and on that distribution that you’re paying 15.3% in self-employment taxes, we can cut that in half. So if you have $100,000 of income, you’re paying $15,300 in self-employment taxes. I can see what would happen.

Choosing the right business structure is crucial; an S-Corp or an LLC filing as an S-Corp can be tax-saving game-changers. Click To Tweet

The company has to pay the other 7%, right?

No. See, as a sole proprietor, you pay it all.

Yeah, but if you own the company, then does it not matter?

The company pays half. You pay half of the company? The company pays half and you pay half. But if you incorporate or file as a corporation, you only report half as compensation subject to employment tax. The other half is distributions, dividends, which are not subject to self-employment tax. So on that half, on $50,000 of that $100,000, you don’t pay 15.3%. How about that? $7,800 in your pocket. Tax return costs you $300, so your net is about $7,500 in your pocket.

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Okay, that’s a good point. So basically when you start paying yourself more than the average person in your job classification would get paid, then it’s worth converting yourself into an S-corp and pay that excess amount as a dividend, as a distribution, as opposed to a W-2.

Actually, I tell my client, if you are taking out over $10,000 a year.

Over $10,000 or $100,000?

$10,000. If you’re taking out $10,000 or more, it makes it worthwhile to be an S-Corp. Wow. It’s that simple. Because on that $5,000, you save 15.3%. That’s $750. The tax return costs you $300 maybe, maybe less for the corporate tax return. You’re ahead $400. If you make $20,000, you’re ahead a lot more because tax return price doesn’t really go up but the savings go up for every dollar. So at around $10,000, it becomes profitable to be an S corp.

Interesting. Okay, well, that’s very good. So before we wrap up, I want you to pick your brains on this IRS and obviously, we talked about it at the beginning that you are, you know, you have 30 years of experience and you’ve read the tax code and all the bills and everything and you know more than your average IRS or even above average IRS person. But you speak in your book, you speak about the seven steps to force the IRS to abate a penalty. Can you share a little bit with our listeners what these seven steps are?

First thing is you respond to every notice. Every time you get a notice from the IRS, you respond in writing. I don’t care if two weeks later they send you the same notice, send them a copy of your first letter and mark it, same copy. Now, the first letter you sent asking for an abatement of the penalty, they’re going to say no. They always do.

The second letter, it goes to the appeals coordinator. They’re probably gonna say no. They do about 95% of the time. The third letter is gonna get you an appeals hearing. Okay? An appeals hearing, your chances of success go way up. Okay? If they get nasty before you get an appeals hearing, you file a 20, 25, let’s say, whatever it is, a notice for a due process hearing, okay?

That stops all collection efforts until the hearing, and it’s an appeals hearing. But a collection due process hearing stops all collection efforts, okay? So that’s something you can do if they’re getting real nasty and want to levy your bank account. Once you file that, they can’t levy any bank account until they’ve had the hearing, then they got to give you 30 days. Don’t use it as a laying tactic. If you have the money, pay it or come to an installment agreement.

But if you’ve got a real complaint or a real case, file these things. Constantly dealing with the IRS is a whole series of no’s followed by a single yes. And once you get that one person to say, oh yeah, we’ll obey that, say thank you and walk away. Don’t continue to argue, okay? Don’t do that. But take advantage of all your appeals up to and in filing a U.S. tax court petition. The cost of doing that is $60. You can do it yourself pro se. Okay? You can do it yourself. You don’t need a lawyer to do it.

The IRS, 95% of all tax court cases are settled before court. The IRS doesn’t like to go to court. Okay? Because if they go to court and lose, there’s a precedent. So they don’t want precedents because they know a lot of this stuff is really wishy-washy. So lots of times you get to tax court, pre-tax court, they’ll often settle for half. And if you’re in the wrong, take the half and run. If you’re in the right, you can still take your chances, but there’ll be lots of chances to settle for less.

So don’t ever give up. Keep writing letters, keep arguing your position. One more thing, when you start your first letter, put everything into it. Research it, think about it, talk to people, get advice, but do everything because the IRS does not like and won’t accept changing narratives. So make sure you have all your facts down in the beginning. You may not have all the proof with it, but you have the fact and then you have the proof you can provide later on.

Those are some of the basic steps on fighting the IRS, and you can do it successfully. But we had one we settled it in 2019. We actually got it abated. It took nine years. It was a $95,000 penalty. I talked to the chief of appeals. I’d gone up the ladder and the guy I wanted to talk to wouldn’t return my calls. So I called the chief of appeals and spoke to her. She answered her phone. And I said, I can’t get a hold of this guy. So should I talk to you or do you want to have him call me? He called me that afternoon.

And at that point, we re-examined the whole thing. He put it with another appeals office and it was coming from the top down, not from the bottom up. So they looked at it as if it was coming from the top down and they said, oh, he wouldn’t have asked us to look at this if he didn’t want it to go away. It went away. The $95,000 penalty turned into a $400 refund. But it took nine years and I probably had, oh, I don’t know, 200 hours into it. Okay. But that was part of the service we provided the client. I didn’t charge them a penny for it.

Okay.

Okay. Because that was part of the service we provided.

So that’s the insurance paid out for this client.

It worked for him to the tune of $95,000.

Yeah, that’s right, $95,400. Well, that’s great, Charles. So lots of interesting information. And it’s fascinating that someone would find payroll fascinating. I love that. So people who listen to this and are intrigued and they wanna know more and maybe gonna work with you to get their payroll answers to you or ask for your help. Where can they reach you? How do they find you?

Well, I’m available at getpayroll.com. I’m CJR at GetPayroll for the email. The book’s available on Amazon, Barnes & Nobles and at thepayrollbook.com.

Can you repeat the title of the book? Just to make sure that our listeners got it?

The payroll book.

Okay.

A guide for small business and startups. It’s available on Amazon or at thepayrollbook.com. Frankly, if they just need some advice, 972-353-0000. That’s my phone number.

That’s easy. That goes straight to you.

That goes to my people, but ask for me. I’m Charles.

All right. I’m sure they will find you. Well, Charles, thank you for coming to the show. Very interesting and good information. And for our listeners, stay tuned and next week, we’ll have another fascinating entrepreneur join us. Have a great day.

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Fascinated by Payroll with Charles Read

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