Paying Your Employees Correctly Is Important, Don’t Let Payroll Become Your Downfall with Charles Read
Your employees want to be paid correctly and on time. There are payroll taxes and quarterly filings. Employees must be classified correctly as new hires and have all the correct forms and documentation to be in compliance. Government agencies are not forgiving of mistakes made during the payroll process and can level fines and penalties. Don’t let payroll become your downfall.
Charles J Read is a Certified Public Accountant (CPA), U.S Tax Court Practitioner ( USTCP), member of Internal Revenue Service Advisory Council (IRSAC) and the Founder of GetPayroll.
Mr. Read’s companies have provided full-service payroll services, payroll tax services, and other payroll-related services since 1991.
Charles is an accomplished senior executive and entrepreneur with more than fifty years of financial leadership experience in a broad range of industries and author of four books, the most recent one being The Payroll Book: A Guide For Small Businesses and Startups.
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Full Transcript Below
Roy – The Business of Business Podcast – Paying Your Employees Correctly Is Important, Don’t Let Payroll Become Your Downfall (00:02):
Hello, and welcome to another episode of the business of business podcast. I’m Roy, we appreciate you joining. And this podcast is dedicated to our solo preneurs entrepreneurs and small businesses. We like to bring you new and innovative ideas and also provide you with solutions to problems that you may be having in your normal day to day businesses.
So today, uh, we’ve got a great guest. We’re going to talk about some very important stuff. Uh, his name is Charles Read. He is a certified public accountant, also a U.S. tax court practitioner and a member of the internal revenue service advisory council, and the founder of Getpayroll. Uh, Mr. Read’s companies have provided full service, full service, payroll services, payroll tax services, and other payroll related services.
Since 1991, Charles is also an accomplished senior executive and entrepreneur with more than 50 years of financial leadership experience in a broad range of industries and author of four books. The most recent being the payroll book, a guide for small businesses and startups, Charles, thanks so much for taking time out of your day to be with us.
Roy, my pleasure to be here. Thank you.
Roy – The Business of Business Podcast – Paying Your Employees Correctly Is Important, Don’t Let Payroll Become Your Downfall (01:20):
You know, I know that 2020 I’m sure has been a challenging time, uh, you know, payroll taxes. I’m just going to speak from the olden days, you know, back when we had to calculate them by hand and then dial them in with the phone. I know things have gotten a lot easier where you could be a lot more accurate, but I’m sure this year has been a, this has been a year for the books for, uh, people in the payroll business.
Oh, absolutely. All the changes that have happened. Uh, and the continual changes, uh, you know, when they first put in the PPP program, they changed it probably twice a week for four months and they’re still changing it on, on how to get your forgiveness and so on. Yeah. It’s, it’s been a very interesting year, frankly, payroll really changed starting with, uh, um, president Obama, Obama, and he did lots of tax changes. Lots of payroll changes for eight years. We didn’t have as much under Donald Trump until this last year. And it’s just gone. Yeah, absolutely insane. And we’re expecting more changes in the following years, uh, on and on and on, um, taxes are going to go up, uh, payroll taxes, unemployment is going to go up. It’s, it’s, it’s a very interesting time and it’s probably not going to get less interesting.
Roy – The Business of Business Podcast – Paying Your Employees Correctly Is Important, Don’t Let Payroll Become Your Downfall (02:47):
Right, right. Yeah. And I know there’s not, uh, you know, I don’t want to dwell on the past because there’s not much, you know, unless people are in trouble trying to work their way out. You know, we want to talk about some things that are upcoming. One thing did hear or have heard. I just want to get a clarification are that there were some deferred payroll taxes and correct me if I’m wrong, maybe I heard this wrong, but I just want to be clear on that word deferred because sometimes people don’t understand that and think that that means that they will never have to pay it. But deferred typically means that it’s been moved out to some point in the future.
President Trump issued an executive order, allowing employees and employers to defer the FICA taxes for literally the last four months of this year. But they had to be repaid in the first five months of next year. Okay. Okay. By the employee, he supposedly the problem with that was the employer was on the hook.
If he allowed his employees to defer taxes and then they quit, God laid off died or whatever, he was still on the hook, the employer paying those deferred taxes. So none of my clients allowed their employees to do it. In fact, probably the only place that it was widespread was the federal government. Because president Trump could insist that the government agencies do it for their employees. The rest of us said, this isn’t a big deal. It’s not a lot of money is deferred for a short period of time. And as the employer, I’m not going to take the risk.
Right. You know, unemployment is rampant. We get another uptick in. COVID like we’re getting now and. We may have to lay everybody off and close it down again. And then we have to pay it back. Right. And if we don’t pay it back, penalties and interest rat IRS is very, is not known as a forgiving agency. I promise you. Yeah,
Roy – The Business of Business Podcast – Paying Your Employees Correctly Is Important, Don’t Let Payroll Become Your Downfall (04:50):
Exactly. Yeah. You, yeah. You know, we had a time where we made like a 10, it was like a 7 cent, 8 cent mistake and they didn’t call you up and say, Hey, you know, it’s just 7 cents between friends. Why don’t you just not worry about it? They were like, if you don’t get that 7 cents to us pretty quick, it’s going to turn into a $5 bill. Yeah, exactly.
So, um, do we have any, I guess there’s, you know, I do want to make this point about payroll because I say this about my taxes all the time is that I can do taxes. I can even do my payroll, but the, the good thing about having professionals like yourself is that they’re always, there’s always guidance and there’s always changes coming out through the year.
And I think that’s where you get your money’s worth with the professional, because you know, you’re on top of these things that, uh, you know, I might have to sit down every end of quarter and try to think, okay, what’s the new change? What’s this, what’s the N you know, where that’s your business and you stay on top of it.
Yeah. If you know about it now for our clients, we send out stuff all the time. Yeah. You know, I’m on the IRS advisory council for the last three years. We’re involved in a lot of things, some of which are confidential still, but like the new NTC form that’s effective January one of this coming year, you no longer for non-employee compensation. Use the 10 99 MIS you use the 10 99 NTC.
Okay. Well, if you’re not reading the, the, the, the trades, you may not know it. Yeah. And if you filed the 10 99 minutes, the government’s just going to send them back to you. And by then you’re late. Yeah. So you have penalties. So the having a, having a professional, I, you know, I’ve done other things in my life. I used to do a lot of accounting and tax work for individuals and corporations.
I don’t do that anymore because I can’t keep up on employment taxes and payroll and payroll changes and all the things that go with it and all the related stuff. And keep up with corporate taxes. I used to be an investment advisor. I can’t keep up with the market and keep up with payroll. So how do you expect a businessman who’s making widgets or repairing cars or baking cakes or whatever, to keep up with things that takes me full time to keep up with, right?
We, we, we tell our clients all the things that are going on, keep them up to speed and protect them. When we go to file, uh, in January, they’re 10 90 nines, we’ll use a 10 99 NEC right. We’ve got it set up. We’ve got the format for, we can print it out on the right paper and envelopes and so on. They don’t have to think about it. We also know where to send it. We know when to send it. The, the, the deadlines changed last year used to be your head until the end of March to send electronic W2’s. Well, last year it became January 31. If you were still working on the old rules, you were late and there were penalties.
Roy – The Business of Business Podcast – Paying Your Employees Correctly Is Important, Don’t Let Payroll Become Your Downfall (07:51):
Yeah. And, um, you know, I’m like an old dairy cow. I just like go to the barn, you know, same path to the barn. And I walk into the, you know, the office supply and just pick up the, the 10 99, uh, MIS like I have every year before. So I’m that guy that you’re speaking to now, for sure.
No, I’m not. And look, a lot of my clients are that they’re busy people. They’ve got businesses to run. Right. They’re entrepreneurs, they’re small businesses. These people, you know, you, you know it. Yeah. It was 70 hour work week. Oh God. That’s an easy week. Yeah. Yeah. Okay. I only 70 hours this week. Wow. I had time to eat a couple of medication times my clients don’t have time as business people don’t have time to keep up with these ancillary things.
That’s why you outsource, I mean, look, you can make your own paper. Do you know anybody that does exactly. Okay. I mean, you could make your own ink. You can, you can, um, build, you can build computers. I don’t, I call Dell. Yeah. Okay. They, they deliver the next day or two. So, you know, outsourcing payroll like outsourcing tax prep, outsourcing a lot of things just make sense.
In this day and age, we’re not living on the frontier where we have to do everything right. Make our own clothes, cure our own food, shoot our own game, plow our own land, build our own houses. We don’t do that anymore. Uh, doing payroll yourself. My father used to do payroll on hand, on hand, created maybe a graft, remember mimeograph machines, mimeograph sheets of paper. And after I became a CPA, I finally got him to start doing some of these things more electronically and very late in life, uh, actually got them onto a computer to do it. Yeah. But yeah, I remember those days. So, um, and it’s just, it’s just silly for the pitons to outsource payroll to, to do it and you can’t keep up on it. You cannot keep up on it. That’s our specialty is compliance.
Roy – The Business of Business Podcast – Paying Your Employees Correctly Is Important, Don’t Let Payroll Become Your Downfall (09:59):
Yeah. And I, you know, the other thing just to reiterate is it it’s, um, the, sometimes these are deadly mistakes and you know, I I’ve read, we had a couple of businesses that around here close that got into trouble with payroll and it put them out of business. So I mean, it’s, it’s not a lot of times, it’s not something that you can recover from, but anyway, uh, so let’s talk about some things, uh, have you kind of got, besides the 10 99, have you got some other things that, you know, for sure are going to be changing, uh, early in 2021?
Well, unemployment rates are going to go up. I’ve seen a lot of them. Uh, some of them are getting delayed here in Texas. They’re delaying it until February to announce it, but, um, I’ve seen base rates go up as much as 500%, uh, minimum, minimum payments. Um, New Hampshire minimum payment went up 500%, uh, for, uh, 20, 21 over 2020. And this as the unemployment rate stays up, this is going to happen everywhere.
Every everybody’s basically going up, both in, in rates and in limits on top of that, starting in 2022, at least 22 States and probably more we’ll hit the food, uh, uh, credit reduction, which means that your food attacks is going to go up. Uh, normally you get a substantial, uh, deduction against the regular food or rate. Well, it’s going to go down. It goes down by two-tenths of a percent every year that your state still owes money that they borrowed for their state unemployment fund.
So that’s going to happen. Uh, the taxpayer first act is being worked by the IRS and going into place. Uh, the appeals, um, section is going to change some, um, they’re trying to become based on, uh, congressional intent, you know, a kind word gentler IRS. Well, we tried this about 10 years ago and it didn’t work either at so don’t, don’t expect to kind of, or gentler IRS. It’s not going to happen. Right. Uh, the IRS is making a major push again in, uh, uh, technology.
So expect disruptions there because the last time they did that, they spent $3 billion in gave up. Wow. Uh, but some of their technology runs back to the 1960s and it’s past end of life. Uh, nobody is maintaining it except the IRS. And so they’ve got to do some things to bring that up to speed. 40% of the IRS people will be eligible for retirement in the next two years and retire, but eligible.
So they’re, and they don’t have the funds to hire and train the people they need to. So service there is going to get worse and more ignorant, right? Um, this just going to happen, the States are not in much better shape. Uh, right now you have all the state bureaucrats at home getting full pay and working half-time on their phone. Uh, if you can get ahold of them, right. I don’t see that getting better until mid-next year. Then they’ll come back and, and have to retrain most of them. Um, and they’re not going to be, this was something that came up in a, um, webinar or the other day or a blog. A lot of these people have now found that they could work effectively from home. And, um, micromanagers are going to be really, really hard-pressed to manage these people.
Who’ve been working from home for months or a year, right? Uh, Hey Joe, I I’ve been doing this stuff from home. You don’t need to tell me what to do. You know, you haven’t, you haven’t looked over my shoulder for a year, quit doing it now. Right. It’s going to be a major change. Uh, then there’s going to be a lot of changes in the economy. People are used to work at their home.
Uh, I just heard on NPR the other day, the major, uh, real estate investment this last year in 2020 was in warehouses, not an office space for the first time in decades, right? Because we’re all on the West, shopping on the web. We don’t, we don’t go to brick and mortar. All that’s changed in life. Life life’s changing. Payroll is changing. Um, there’ll be other tax law changes. Of course, the progressive wing of the democratic party has promised all kinds of things.
Minimum wage is changing everywhere. Every place that’s allowed to change. The minimum wage is changing it in Texas. Dallas tried to change it. And the state said, no, it’s a state minimum wage. You don’t get to mandate it. And that would have been disastrous because what happens if you have a company and you have people that work part-time in Dallas and part-time in Mesquite or in Frisco, she got to pay him different minimum wage when they’re in Dallas, wow.
I’ve never heard a day, you know, come on. It gets, it gets insane. Now, um, you know, the minimum wage, when in Seattle, when it crossed the city line, the restaurants pay seven or $8 less an hour than there are people. She think their prices are cheaper. Of course they are. So, you know, the, the dislocations is causes. Uh, I wouldn’t be surprised to see a $15 minimum wage come in.
Uh, and your McDonald’s meal. Um, mine at burger King is $5, four 95. I get the double bacon cheeseburger and the value fry. Okay. That’s going to go from four 95 to nine 95. Yeah. That’s, that’s how, and this thing that people don’t realize, 75% of all federal revenue, the new comes through payroll. Okay. 75% goes through the payroll department. Okay. Cause it’s all the withholding and all the employment taxes, all the social security, all the Medicare, it all flows through payroll.
Yeah. 75% of it. So if you want to affect tax revenues, screw with payroll. Yeah. Politicians are going to do it. Yeah. This is going to be a very interesting year. Uh, we still have a democratic house, um, who knows what’s going to happen with the Senate. Uh, if that goes democratic, a lot of the progressive agenda will go through and that’ll be a lot of tax changes and a lot of roll back of, of the, uh, 17 tax change.
Talk, talk about regulation, the regulations on the 2017, the December 17 tax cut and jobs act final regulations. Aren’t written yet. They’re still being written three years later. Yeah. And it’s going to be another year or two before they’re all finalized. And if we go and change it back or rechange it again, next year, the IRS doesn’t write regulations overnight. It takes time. And it takes experience because anything Congress does that increases taxes.
There’s tens of thousands of people like me out here trying to figure a way around it. Yeah. Okay. And when we find it, we implement it and the IRS then has to write regulations to eliminate that loophole. Then we find another one, they write regulations. We find another one who finds. And it goes on for years to try and get congressional intent because congressional laws are, are very poorly written for implementation their ideas, their concepts, their guidelines.
They’re not hard and fast regulations for 330 million people. Right. And 5 million, six, eight, 10 million businesses, you know, they can’t write them for that. That’s the IRS has job Treasury’s job. And it’s a bear. Let me tell you. Wow. Yeah. I didn’t even, I can’t even believe that they’re still
Roy – The Business of Business Podcast – Paying Your Employees Correctly Is Important, Don’t Let Payroll Become Your Downfall (17:50):
Trying to write the 2017. Unbelievable. Yup. So does that, um, since such a big portion of the federal income is from the payroll tax Dee, do you anticipate the, an increase in that to try to make up for some of this, uh, spending that they’ve had to do during COVID? Or do you think that they’ll just pay it off over the years or?
Well, they’re, they’re, they’re going to have to do both, but you know, the, the idea we’ll, let’s tax the rich, uh, case. It doesn’t work. There’s not enough rich out there that make enough money. You can steal everything from them and it’s not going to make that big of an impact. Right. Literally you can, you can take the top, you know, 10,000 richest people in the country and seize their wealth. And it’s only their wealth, not their income, but their wealth.
Okay. Visa’s a hundred million, a hundred billion dollars. You know, you take all of that. It’s only one to go to run the company for a couple of months. The country. Yeah. Okay. It’s just not that much money. It has to come from us. The middle class, the people that work for a living, the people have small businesses, people that work in them, you can’t the poor people.
They’re not paying taxes. Okay. And that’s progressive tax system. You know, whether you want to talk about Romney’s 47% or whatever, I don’t care. But the middle class is where it’s going to have to come from, because that’s where the vast majority of income is. Yeah. It’s, you know, there’s a few people at the very top to make.
I’ve seen some amounts of money. I wish I was there. Okay. Don’t we all, but there’s not enough taxes there to make a real difference. It’s all, that’s a political nonsense. It has to be middle-class you can’t say, well, we’re only going to raise taxes on those that make $400,000 or more. You can take everything they make. It’s still not enough to, to, to make a budget shortfall. So what are you going to do? Lower the 200 Laura to a hundred lowered to 50. Yeah.
That’s, what’s going to happen. Everybody’s taxes are going to go up. If they’re going to pay down on the debt. And of course this year, we’ve just boom, the debt. I mean, the w when you talk, uh, uh, a $3, $3 trillion stimulus package, you know, that’s $10,000 for every man, woman and child in the country that has to be paid back sometime. Right.
Roy – The Business of Business Podcast – Paying Your Employees Correctly Is Important, Don’t Let Payroll Become Your Downfall (20:16):
Yeah. And I don’t think we’re stopped. I don’t think we’re through with that. And it’s just going to continue. It’s got to for a little bit longer anyway, so that kind of brings up a good point, uh, thinking about these, uh, maybe people that have lost their job or have gotten cut back so far that they’ve decided to step out on their own. Uh, you know, maybe you can just kind of speak just to, um, a little bit about the difference between working for a company and having these things deducted versus working for, and trying to make your estimated payments when necessary.
I refer to him as accidental entrepreneurs, right? Uh, they, they, they’re out of a job. They’re out of a company. Uh, they gotta make a living. They’ve got to put food on the table, but you know, they got a wife to take care of her kids or themselves. So they’re going to find a way to make money. They’re going to do it. We’re getting a lot of new entrepreneurs in the door to help them with payroll. Okay.
Because if you form a corporation or an LLC that files the corporation, you’re an employee and you have to have W2 compensation. You don’t have a choice. Okay. Uh, and if you hire somebody, you’ll hire a girl and you’re a lawyer, you hire a, a lady in the office. You gotta, you gotta pay her. You can’t just pay her under the table. Right. It’s illegal. Uh, you know, uh, it works until you her off and she goes down unemployment and files, and then the auditor comes out the week later and the penalties and interest add up in a hurry.
So don’t do that. Please. Don’t do that. Call me. So we’re seeing a lot of that. And yeah, uh, here’s the, here’s the problem in the IRS sees it. If you’re a W2 where they withhold the money and give you a W2 and report it to the government, compliance is about 99%. If they report like a 10 99.
Um, but don’t withhold compliance falls to about 97%. But if you not, don’t withhold the taxes and you don’t report the income to the government as a sole proprietor or business owner compliance falls to 37%. Wow. That’s why the government goes after it. That’s where the tax gap is. The tax cap in the gig economy is huge. Right? Okay. That’s why they put in the 10 99 K to force Uber and Lyft and people like that to report all the money they collect and distribute to their drivers and their gig workers.
But there’s so much gig economy out there. Whether it be the lawn guy, the window washer, the guy that comes pinks, the building, the guy that does your garage floor, uh, the mobile dog groomer, you name it, right. There’s a million of those. And that just exacerbates the tax gap because these people should, in many cases, be on a W2 and, or file estimated taxes. And they don’t because it’s easy not to.
Yeah. If you don’t make that estimated tax deposit, the IRS is not going to call next week and say, you’re past due, right? Your electric company will, your phone company will, your mortgage company will, but the IRS won’t, they’re not going to be in your face. Okay. You don’t pay your car payment. 60 days later, the repo guy is coming to take the car. Right? Okay. You don’t pay your tax deposit that may not catch up with you for several years, okay.
Or longer. But when it does, it’s going to be massive. It’s going to be the deposit, it’s going to be the penalties. It’s going to be the interest and the IRS could take your car, take your house, take your income. Literally take the clothes off your back. Right. I had, I had one agent collection agent. I was in the next cubicle with a client and he was telling the guy, uh, well, you’ve got a gold tooth go down and have that tooth taken out and pawn the gold watch people. I’m like, this is true. This happened. And I’m sitting there.
My client’s looking at me going. I mean, it was insane, but that’s, you know, when you get down to collections to the IRS they’re collection agents, right. And you don’t want to get into collections. Yeah. Believe me, because they don’t care. Whether you all or not, all they’re interested in, in collections is collecting the money. Yeah. That’s all they’re interested in. If you can say, well, I don’t know this. See the, I don’t know this. And the collection guy goes, I don’t care. Write me a check. Right.
Roy – The Business of Business Podcast – Paying Your Employees Correctly Is Important, Don’t Let Payroll Become Your Downfall (25:08):
Yeah. And it’s so important.
And out of examine out of appeals,
Roy – The Business of Business Podcast – Paying Your Employees Correctly Is Important, Don’t Let Payroll Become Your Downfall (25:12):
Right? Yeah. It’s so important. And you know, when I came off a W2 and went to, you know, estimating my own, you know, it’s, it’s the best, the best thing to do is to take a little bit out every time you collect money coming in, just set it aside and have it there because I will guarantee you that it will be such a snowball effect that, you know, if you missed one, two, then all of a sudden you’re trying to catch up at the end of the year.
I mean, it’s from my understanding. Most people just cannot overcome that, or right. And if you, the other thing I’ve heard is that it’s best. If you do get into a little bit of a scrape, just address it, take your lumps and move on because it’s not going to get any better. It’s just going to be the, uh, taxes, interest, penalties, everything just keeps compiling. And then, you know, you’ll just have a big old, uh, a bigger debt or payment to make.
But anyway, we won’t, we won’t get too far off track on that, but I just, you know, a lot of people are, are making that transition. And I think it’s important that you do. There is a reckoning for money that you do bring in the door on your own. You do have to address that in some respect,
I’m only going to make one caveat. Don’t set aside a little set aside. Well, yeah, yeah, yeah. Whatever. You’re, uh, you’re about 30% of what you take in. You need to set aside me more. Yeah. Yeah. So don’t, it’s not $5.
Roy – The Business of Business Podcast – Paying Your Employees Correctly Is Important, Don’t Let Payroll Become Your Downfall (26:46):
Yeah, no, no, no, no. Yeah, yeah, yeah, no. I just,
And, and, and, and have a CPA, right? That a tax advisor, you can sit down with at least once a year and he can tell you how much you need to put away right now, if you miss one, that’s fine. You know, you’ll, you’ll get by with one or two you’re. Right. Exactly. Right. But if you do it on a regular basis to make a habit of it, it’s going to solve it. And if you do get in trouble in the beginning, the IRS, you can they’ll work with you. These are nice people for the most part, stay out of collections, but the exam and so on, you can set up installment agreements. You can do all kinds of things, right. Uh, just be reasonable with them. Talk to them, treat them like they’re human beams and not some government machine don’t swear at them.
Don’t scream at them. You know, I amazed my staff. I’ll be sitting and talking with them on appeals officer in New York, and she’s close to my age and we’ll spend 20 minutes talking about grandkids. Yeah. Okay. And then when we’re done and we need to come to this situation and she has choices, she can say, yeah, that’s reasonable. Let’s go ahead and abate it. Whereas she can say, write me a check. Right. If you’ve been nice to her, she’s far more likely to say, yeah, let’s just debate it. Yeah. Okay. Cause that’s her decision. Yeah. So why do you want to off somebody? Who can do you a favor?
Roy – The Business of Business Podcast – Paying Your Employees Correctly Is Important, Don’t Let Payroll Become Your Downfall (28:18):
Exactly. Exactly. So let’s talk a little bit about the book. So what, um, what guidance or what is, what have you put in the payroll book?
There you go. There you go. The payroll book, a guide for small businesses and startups. It’s exactly what it’s for. It’s it’s 30 years of experience is still down to 85,000 words. Okay. Um, I, it starts out with what the various entities are and you know. What the tax effects of having those entities are, it goes into, what’s an employee, what’s a, non-employed, what’s an independent contract, or what’s not what are earnings. How you record them.
Deductions taxes, tax penalties, all the tax laws and, and various other payroll related laws, uh, how to run a payroll, uh, how to calculate it and get it out. I’m doing exactly, uh, record keeping all the records are required to keep for all the different federal agencies and state agencies. Workers’ comp security, internal controls, illegal aliens, and other miscellaneous issues, including this cheat and PEOs and so on.
Uh, it’s you know, it’s not something you’re going to sit down and read and a couple evenings. It’s a good thing to have on your bookshelf because when a question comes up, if you’re not using me or somebody like me, uh, then that’s a wonderful reference book. The nearest thing to that, you know, I’m in the industry. So I look at them is the source, the payroll source it’s available from the APA for a $595. Wow. This is a list price on it is a 29 95. I think. Uh, Amazon has it on for like 23 and a quarter at the moment. Um, it’s a really nice parallel reference book.
Roy – The Business of Business Podcast – Paying Your Employees Correctly Is Important, Don’t Let Payroll Become Your Downfall (30:07):
Yeah. That’s awesome. So, you know, what can a company like get payroll? Um, S one number one. What can you do for employers? Of course. And then also, how do you differentiate yourself from some of the, uh, bigger players that are out there in the field?
Thank you. Thank you for that question. Yeah. All of the payroll companies, for the most part, do a reasonably good job of creating paychecks or direct deposits. Okay. And most of them do a reasonably good job of depositing taxes and filling out forms for you. Prices vary in amount of services vary, but where the real problem comes in is compliance.
When you make a mistake or the IRS makes a mistake and believe me, the IRS makes millions of mistakes. Every year, you got a hundred thousand people and technology going back to the 1960s, but stakes are going to happen, right? What do you do? We’re compliance experts. I’m a CPA for every client. We take eight, 28, 48 limited power of attorney that allows us to advocate directly with the internal revenue service and the various States and the various other agencies. We can represent the client ourselves.
We can go to them and talk to them and make deals and make arrangements. And so the IRS then has a professional that knows as much, and in many cases more than they know, because I know the law, I know the regulations, I know the IRS manuals. I know what they’re allowed to do. I know what they’re not allowed to do the analogy I use for the poor businessman. And I’ve been there is if you take the greatest Brazilian soccer player, you can think of in my day and age, it was Paylite tremendous athlete, wonderful soccer player. And you stick them in a New York Yankees uniform, and you put them in Yankee stadium and you say, play second base.
He doesn’t know the rules, he doesn’t know the equipment. He doesn’t know anything. He’s still a great athlete, but he’s out of his ballpark. Right? Okay. And he can’t, you know, he’ll learn, but at what cost. So we do this for a living. This is what we do. We’re compliance experts. That’s why I have, I’m a us tax court practitioner. If the IRS too off base with it for $60, I file a petition with the U S tax court, which stops.
Everything gets kicked back to docket it appeals. And I get a knowledgeable, uh, district council to sit down and discuss the situation with not some collection agent, not some ignorant examiner, not some lowlife or excuse me, low-level clerk, not like this, but low-level clerk. I’m talking with a, an experienced professional that has many years of experience in this and understands as much as I do.
And we can come to an agreement. But if you don’t have that, and I don’t know of any other payroll company that does this, if you don’t have that, what do you do? You’re on your own. Yeah. We’re insurance. We’re payroll insurance. You insure your car, your insure, your house, your insure, your life, hopefully your car doesn’t get in a wreck and your house doesn’t burn down and you live a long life.
Right? What if something happens? That’s what you have insurance for. Well, when a mistake happens with your payroll, we solve it. Right. Once one thing I do want to make this point, the IRS cannot penalize you for a simple mistake. That’s illegal. Okay. They can only penalize you for gross negligence, but guess who makes that determination up front? They do. You don’t exactly. They’re going to determine gross negligence. So you have to be able to show them legally, ethically by the rules, by the regulations, by the court cases, that this is a simple mistake or it’s their mistake.
And if you do that, that all goes away. But if you don’t know how to do that, you’ll never be able to do it. I’m sorry. Yeah. I’ve spent 30 years learning. I learn more every day. This is why I’m on earth SAC. It’s I I’ve met with all the, the I’ve met with the commissioner of the IRS. I’ve had lunch with them a couple of times in DC. Uh, he, he said the employee cafeteria, I’ve met all the commissioners for the various sections of the IRS and their deputies and key people throughout.
All right. So if I need to, I can call the chief of appeals and get some help. Do you even know his name? Uh, Sharon who’s head OPR is a friend of mine. Okay. Office of professional responsibility. These are the things we can do that most of our competitors can because we concentrated on compliance, not just massive amounts of clients that were running through, you know, just to run them through. Yeah.
Roy – The Business of Business Podcast – Paying Your Employees Correctly Is Important, Don’t Let Payroll Become Your Downfall (35:16):
Right. And it makes a big difference to have somebody that, you know, if you do get into a little scrape to have somebody to be able to walk through the doors with you and to represent you and be there. Well, let me ask you this when yeah. If, uh, w what if somebody that has not been your client, if there’s somebody out there that is going through some troubles, uh, can you help them, or do you, do they really, do you really need to be involved or prior?
I prefer, I prefer to work with my clients that have been there, because we know what’s going on. We have all the records and everything else. Right. But if, if one of your listeners has a problem, call me if I can answer the question off the cuff, if it’s free, I’ll just do it. I like helping people. If it’s going to be more involved, we’ll talk about it. We’ll quote a fee and we’ll, we’ll go after it. Um, the earlier in the, in the process, you do it the better, right?
The later it gets, the more things become irreversible, right. There are some deadlines and some drop dead dates that are in the regulations. And the courts say, if you don’t do it by this date, Sol yeah, yeah, yeah. You’re just out of luck. And that’s just the way that Oh, but your, your honor, I don’t know this. They say, well, yeah, but you had to do it by this date. That’s the law. Yeah. And sorry. Yeah. Yeah. And the other thing, just to talk to your Congressman.
Roy – The Business of Business Podcast – Paying Your Employees Correctly Is Important, Don’t Let Payroll Become Your Downfall (36:46):
Yeah. The other thing just to make clear as well is that if, if it’s somebody that you are already working with, you’re already in their business, you know, what’s going on. If somebody that’s in trouble comes to you, you are going to have to do some digging through to see what has happened in the past. So it’s not just always as simple as I’m in trouble, help me let’s move forward. I mean, there, there, it depends on how complicated things are, but there is going to be some due diligence that would have to go along with that.
Absolutely. Yeah. And, and, and there are, as I was saying, some problems, if you delay too long, that are insolvable. Right, right. They’re just, you just have to chalk it up and as for experience and no next time not to let the deadline lapse. Right.
Roy – The Business of Business Podcast – Paying Your Employees Correctly Is Important, Don’t Let Payroll Become Your Downfall (37:31):
All right, Charles. Well, thanks so much for, uh, this has been great information. We appreciate it. And, uh, probably at the end of first quarter, next year, or if, if you, if some big things come along, please feel free to reach back out, but we’ll get you back on and, you know, kind of keep the listeners updated as we go. So, um, before I let you go, though, what is a tool that you use in your daily life business, personal, it could be a tool. It could be a habit, something that you do every day that you don’t think that you could do without.
Well, it goes back to, uh, and this is how we do business. And it goes back to an old saying, there’s never a traffic jam on the extra mile. Right. We always try to go the extra mile for our clients and they appreciate it. Um, because that’s who we are. That’s my staff. It comes from the top. It permeates the organization. We bend over backwards for our clients. We believe in customer service. That’s, that’s, that’s how I was raised. My father had his own business. I was raised in a, in a small business. I entered, I grew up in an, I did not understand it when I was started, but, you know, you learn over time. Right. And so you’d take care of your customers cause that’s, who’s paying you. Exactly.
Roy – The Business of Business Podcast – Paying Your Employees Correctly Is Important, Don’t Let Payroll Become Your Downfall (38:48):
Exactly. All right. That’s good to know. So tell everybody how they can reach out, either get ahold of you or, uh, get, get payroll and get them started work. Get you started working for them.
Sure. Well, obviously, as you can see from the backdrop get payroll, so it’s getpayroll.com. Uh, we’re all over there. Uh, the book’s available on Amazon Barnes and noble is other fine bookstores or at thepayrollbook.com. Uh, my email CJR@getpayroll.com email me there. And if it’s something that you ain’t got to talk to somebody (972) 353-0000. All right. That’s the phone number.
Roy – The Business of Business Podcast – Paying Your Employees Correctly Is Important, Don’t Let Payroll Become Your Downfall (39:30):
Put all the contact information and the book in the show notes as well for all of our listeners. You bet, Charles. Thanks a lot. Appreciate you taking time again. All right. That’s going to do it for this episode of the business of business podcast. You can find us at, of course, thebusinessofbusinesspodcast.com. We are also on, uh, Facebook, Instagram, and Twitter, and we will post the recorded session on YouTube as well. We’re on all the major platforms, iTunes, Google, Stitcher, Spotify. If we’re not on one that you use, please reach out. I’ll be glad to get us added until next time. Take care of each other.
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