TaxCoach Briefs:    February 18, 2010

Volume 5, Number 7

• Marketing Minute: Tax Strategies for Bank Robbers
• New Tool: Tax Summary Cover Letter
• Member Event: SuperTable Registration Open
• Member Call-In: More Strategies for Bank Robbers

****Attention All-Stars and Press Club members ****: We'll be dedicating our next monthly webinar, on Tuesday March 9 at 4pm Eastern, to the topic of "Hunters vs. Farmers" — understanding and profiting from differing personality types. We'll update you with agenda and connection details via The Scout as the time nears.

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MARKETING MINUTE (EAL)
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TAX STRATEGIES FOR BANK ROBBERS

Keith and I dreamed up TaxCoach one afternoon over lunch at Teller's restaurant in Cincinnati's Hyde Park Square. So it's fitting that our current offices are just down the street from that restaurant, across from a bank and a funeral home (which would be even more appropriate if we offered an estate-planning tool).

Yesterday morning, three spirited youngsters robbed that bank across the street. They took off in a stolen SUV just as a red dye pack exploded in the cash. At that point, our underemployed youths panicked and threw the money out the window, scattering the cash up and down snow-covered Erie Avenue.

I showed up at the office just as the police were clearing the scene. I didn't realize what was happening, so I missed my chance to pick up some easy money. But the robbery did spark some entertaining discussion on our weekly Member Call-In. (See below for the question log, with some clever takes on the tax implications.)

I'm a big fan of targeting markets. Targeting specific markets, like real estate agents, physicians, or retirees, and specializing in solving their problems, is a smart way to build exposure and command premium fees. It's like opening an orthodontics practice and specializing in braces versus a general dentistry practice. (What's the difference between a dentist and an orthodontist? About $25k/year - Keith)

I doubt many of you are looking to target bank robbers for your practice. It's hard to build long-term relationships with clients unexpectedly serving time in "government subsidized housing." And there aren't many planning opportunities for inmates making 11 cents/hour stamping license plates. But you can use stories like our local bank robbery to boost your business - by taking a topic that intimidates clients and injecting a little entertainment.

Taxes aren't fun. Even accountants and attorneys are intimidated. Keith is a CPA, and he's never prepared his own returns - which is a good thing, otherwise there would be no TaxCoach. And I recently met with a local judge (who coincidentally took and passed the same bar exam as I did), who confessed she's never done her own taxes. Is it any wonder the typical client thinks they couldn't even spell tax, even if you spotted them the "t" and the "a"?

One of the best things we can do for our clients is to make taxes less intimidating. We can take stories like the bank robbery, find a tax angle, and make the whole topic less terrifying.

Those of you who have been around for awhile will remember the "Tax Strategies for Somali Pirates" module we offered in last April's Lineup. We repositioned that piece for one of our Press Club weekly client emails - and Press Club members told us they were overwhelmed with positive responses from their clients. None of you were looking for pirate clients - but it made an impact and your clients appreciate it and remember you for it.

Back when I launched my personal service practice, I worked hard to promote myself as "the funniest tax guy in America." Clients weren't necessarily looking for a funny tax guy - they wanted a good tax guy. But the humor got me appearances on CNN, Fox News, and other networks, and that credibility turbocharged my business. That's why you'll see the picture of me on the CNN set on the TaxCoach home page - even though I've lost a good 20 pounds since it was taken. That credibility is worth the 20 pounds the camera adds.

If you're looking to build your business, keep an eye out for the dramatic, funny, or thrilling stories that clients are already talking about. Find a way to work taxes into the story. Use that story in your marketing efforts and client communications. And watch your business grow with less effort and more fun than you thought possible.

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NEW TOOL (EAL)
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TAX SUMMARY COVER LETTER

This time of year, your plate is full with tax prep work. You probably don't have much time for planning. But it's also the time of year you're in contact with all your clients. How can you use this time to market your business?

For years now, Keith and I have recommended you identify tax-prep clients with possible planning needs, prepare a TaxCoach Summary report to attach to the return, and use it to identify specific planning opportunities to discuss after April 15. (Many of you have asked whether doing so violates the Section 7216 privacy rules; however, Revenue Ruling 2010-4 clarifies that this doesn't.)

Yesterday, one of our weekly callers asked if we could prepare a cover letter for that summary report. Great idea! We've prepared the following letter for you to use for those clients. It's especially appropriate if you're mailing the return, but still worth attaching even if you can discuss it personally when delivering the return:

Dear Client:

Thank you for letting us prepare your tax returns this year. We know that you have many options for tax preparation, including preparing your returns yourself, and we appreciate the trust and confidence you have shown in our service.

Tax preparation is a critical part of our service. But tax planning is the key to minimizing your taxes. And in today’s economy, with record-setting federal budget deficits, higher taxes are certain. That means tax planning will become even more important. So we’ve decided to place new emphasis on tax planning for clients like you.

We’ve prepared a brief report summarizing some of the planning opportunities that may help cut your tax. We’d like to discuss them with you in detail after the busy season ends.

Take a quick look at the attached summary to see just how many items bear investigating! We'll give you a call after April 15 to schedule a Tax Analysis and discuss them in more detail.

Thank you again for your continued business. We look forward to delivering even more value by preparing you for the coming tax increases. And if your friends, family, and colleagues are looking for this same value, be sure to let them know we’re available to help!

Sincerely,

Your name

This move will reinforce the value you deliver to your client, and tee up tax planning engagements for later in the year. Give it a try - you'll rarely find a client focused so attentively on his need for proactive tax planning than when he sees the pain of this year's tax bill!

You'll find this letter in the Playbook, as #28 under "Sample Letters in Microsoft Word."

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MEMBER EVENT (EAL)
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SUPERTABLE REGISTRATION NOW OPEN

Keith and I are excited to open registration for the 2010 SuperTable, May 5-7, in New Orleans! Our focus is pricing, and out goal is to help you make more from your practice without even having to add clients by showing your current clients how much more you're worth!

• Wednesday, we’ll present the Roundtable “Basic Training” for those of you who missed it.

• Thursday we’ll present a full day of advanced pricing strategies.

• Friday morning, we’ll present more advanced TaxCoach topics.

• Friday afternoon will be advanced training for Certified Tax Coach™ licensees.

We’ve never liked hosting meetings at the average bland and boring hotel. So we've traditionally looked for private golf and business clubs. But this year we've outdone ourselves - we're setting the SuperTable at the Old US Mint in the famed French Quarter. (Honestly, where better than an actual mint to host a meeting for tax professionals?)

Click here for more information. The SuperTable isn’t going to be just another tax conference. It’s going to be an experience, with local color in a great American city. And you’ll kick yourself if you miss it.

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MEMBER RESOURCE (KAV)
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MEMBER CALL-IN WITH ED AND KEITH

This week: "The Goodness" again, as usual. Plus we got a bit silly with an analysis of the tax implications of a nearby bank robbery, as Ed alluded to, but it seems the dozens of people on the call enjoyed the diversion as much as the serious business we covered.

Here's an excerpt of questions and comments raised by callers this week, straight from the call log:

• Can you briefly review the requirements for avoiding penalties for improper disclisure or use of taxpayer information imposed under IRC 6713 and 7216.
  [A: Also see in the Playbook, under the "Gathering Client Data" heading, for compliance tools and our analysis of the impact of 7216 on our members, as well as the IRS interpretations issued earlier this year. ]
• Is the link up yet for the Supertable
  • when can i register for the New Orleans thing?
  • When signing up for the super table how do we handle the payment section as a press club member.
    [A: Regular members, visit www.TaxCoachSuperTable.com for complete details and registration. All-Stars and Press Club members, use the link in the blue sidebar on the All-Stars page to claim your discounts. ]
• What, if any, are the issues with Tax Coach and professional corporations? Any specific PC plans?
  • Most Physican clients I have in ohio are set up as a Professional Service Corps- can they un elect that status thus becoming a regular C Corp then trigger the Sub S election to take advantage of our tax coach concepts
• The bank robber this morning. If he got out of the bank with the money, is it at that point income? Is is still income to him even if he dropped the bag and the bank got the money back?
  • on the bank robber, could you argue that he never received "income" because the money was delivered with a dye pack, thereby eliminating the value that he would have received?
  • Does the Bank issue a 1099 and then recognize the mitigated casualty loss in the business interruption?
  • I don't think you could argue that the legal fees are deductible due to public policy issues.
  • Did the robber keep enough of the money to make a deposit on a TaxCoach plan?
  • Re: Bank Robber: Illegal activities are not considered "ordinary and necessary" and hence, our robber is out of luck deducting associated expenses.
  • Since Keith has stock in the bank, then had he picked up the $20's it wouldn't be income. He was just safeguarding his assets
  • But doesn't the bank get reimbursed by the FDIC?? So bank actually suffers no loss. Why would they issue a 1099 if they can't substantiate a loss?
  • we're going to beat this to a pulp... re: the legal fees of the bank robber, I think you would have to look at the origin of the claim, which is a bank robbery, in determining whether the legal fees themselves are deductible. Given that the robbery is illegal, i think under the origin of the claim that the legal fees would not be deductible.
• Do you have any written material to present a "Tax Strategy Summary" with an income tax return? Assuming that you mail the tax return to the client.
  [A: Now, we do! See the Marketing Minute above. The new letter is in the Playbook. ]
• Where do you recommend getting some "education" about how to write good motivating marketing letters and material? Books to insturct or seminars to attend?
  [A: Ed recommends the Dan Kennedy book No B.S. Sales Strategies, among others, or any of several by Jay Abraham. I'd add Writing that Works by Kenneth Roman, former CEO of Ogilvy & Mather and biographer of David Ogilvy. ]
• Can a section 127 plan cover education expenses for the employees dependents? Can the education expenses of independent contractors be covered under a sec. 127 plan?
• Is there a way we can deduct a partner's "Nanny" services for his child? Perhaps under some sort of benefit plan?
  • Nanny should be able to do admin work for the business for some offset
  • deducting day care... open a day care business. Hire a nanny to watch the kids. Add your child to the mix "for free"

If you're looking for clarification on TaxCoach strategies or additional ways to profit from TaxCoach too, join us for the next call, on Wednesday February 24, at 1pm Eastern. Enter a question or just listen in on the repartee. Check the "Contact Us" button within TaxCoach for registration instructions.

While our elite members (All-Stars, Press Club, and Hall of Fame) can still schedule time directly with Ed as part of their coaching programs, we simply cannot answer marketing and tax-strategy questions via email or unscheduled calls.

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We can answer questions on using TaxCoach system features anytime. (Save marketing and tax strategy questions for Member Call-Ins.) For best response, email support@taxcoachsoftware.com. If we think the answer will be useful to all of our members, we'll publish it (anonymously) here in the 'Member Q & A' section of TaxCoach Briefs.

Regards,

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