Friday, December 24, 2010


While I am carrying on my Christmas Eve tradition of typing W-2s why don’t you get acquainted with Russ Fox, EA of Clayton Financial and Tax in Irvine CA, author of the TAXABLE TALK blog. Russ has been in private practice since 1999, specializing in small companies, typically Subchapter S Corporations and LLCs, fiduciary returns, and gambling.

TAXABLE TALK posts often deal with tax cheats who have been caught – proving that tax crime doesn’t pay. Russ’s discussions of recent changes in the way gambling winnings and losses are reported on the 1040 has kept me up-to-date on the topic.

(1) How did you become interested/involved in preparing tax returns or teaching taxes?

I fell into it by accident. Playing poker, someone asked me if I could do his return. I said yes, and it grew into a profession.

(2) How were you educated/trained in preparing tax returns?

MBA in Finance and Accounting; SEE prep course (offered by OCEA); and then on-the-job training. I didn’t do many returns at first, and this allowed me to research each issue slowly. I also specialize in an area that I understood very well - gambling.

(3) When and why did you decide to write a blog on tax issues?

I started a blog to help my books (not this blog), and it did. I then read Hugh Hewitt’s Blog and I was convinced that a blog would be a good means for publicity and help me attract clients in the areas I practice. I wrote about my reasons in my second blog post, and not much has changed.

(4) How has blogging helped your business?

Yes. I’ve gotten business directly from the blog, and it’s a way for potential clients to see that I understand issues that concern them.

(5) What do you consider the “best tax advice” you can give anyone?

Document, document, document. Keep good records.

(6) Do you think the regulation of tax return preparers is a good thing?

Neither good nor bad. Some of the low-hanging bad preparers will be put out of business, but it’s going to create a new bureaucracy. In California, all return preparers have been required to be licensed for years and we have numerous preparers who have done everything from telling clients that anyone can take an education credit, anyone can take a mortgage interest deduction, even if you don’t have a mortgage, etc.

(7) Do you think CPAs and attorneys should be exempt from testing and required CPEs in taxation?

CPAs and attorneys who currently specialize in tax should be exempt from testing but should be required to obtain CPE in tax. Likewise, attorneys and CPAs who have no desire to prepare tax returns should be exempt from testing and CPE. I’d prefer to see CPAs and attorneys who choose to specialize in tax to, in the future, show demonstrated knowledge in the field. That said, this would face fierce opposition from the AICPA and the ABA.

(8) What is your favorite Broadway musical – and why?

I live quite a distance from Broadway. I’ve seen one Broadway musical live - The Producers.

Russ’s BTA is good advice indeed!

I do agree that CPAs and attorneys who currently specialize in tax should be exempt from testing – as should all experienced previously unenrolled preparers as well – under a grandfathering system. But it appears that this is not going to happen. And I certainly agree that CPAs and attorneys who want to prepare 1040s should be required to obtain CPE in tax. Attorneys and CPAs who have no desire to prepare tax returns should not register for PTINs at all, and therefore would not have to deal with testing and CPE in taxation. They would also not be permitted to prepare 1040s for a fee.

If Russ had to see only one musical The Producers is a good choice. Matthew Broderick was singing for me in the number “I Want To Be A Producer”.

Next week – on New Year’s Eve – we talk to Peter Reilly of PASSIVE ACTIVITIES AND OTHER OXYMORONS fame.



Peter Reilly said...

Not that it necessarily stops some of them, but CPA's have an ethical obligation to not take on any sort of work that they are technically qualified for.

Robert D Flach said...


I agree with Peter - it does NOT necessarily stop them. Ethical obligations only work on those who have ethics to begin with. The ENRON scam involved CPAs, didn' it.

Also, many CPAs, as well as some unenrolled preparers to be fair, THINK they know what they are doing - but do not.