The 5 New Yr’s Resolutions Each Tax Professional Ought to Make

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The Five New Year’s Resolutions Every Tax Pro Should Make

Here we are, year six of the annual New Year’s Resolutions column for the tax industry, and I think we can all agree that 2020 was the BEST. YEAR. EVER.  

I saved thousands in gas money. My dog’s separation anxiety has not been an issue. And I haven’t seen in my in-laws in months. I was actually sad to see the year e…

…you’re not buying it, are you?

Happy New Year 2021 Text Holiday Celebration Graphic with Gold Fireworks Background in Night Sky

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Man, I’m trying. I’m trying to find some silver lining to the past 12 months, but it just can’t be done — 2020 was historically brutal. The COVID-19 pandemic has left nearly 350,000 dead. The resulting lockdowns have cost people their livelihoods. There’s simply no positive spin to put on what unfolded in 2020.  

Mercifully, the calendar has turned to 2021. Around the tax world, however, the impact of the past year will be felt for quite a while. With COVID continuing to spread unabated, two of the Big 4 firms have told their staff to work from home until May. Some large regional firms have shut their office doors until next December. An industry that once viewed remote work as a scourge has now been forced to embrace it on a universal scale.

If there were ever a year that we need to set some goals and stick to them, this is the one. But these aren’t resolutions like we’ve seen in the past, like “get a Masters in tax” or “write an article” or “join Twitter;” no, these are resolutions designed to preserve our very sanity and prevent a mass exodus from the industry unlike anything we’ve seen before. And the reason for this step-up in seriousness is obvious:

During 2020, working in public accounting really, really sucked.

Of course, even during the best of times, our job is no picnic. What made 2020 different, however, is that there wasn’t enough good in the industry to wash away the bad. No relationships. No sense of accomplishment. And for many, no professional growth.

Accounting firms have long prided themselves on forging their own unique “culture” to differentiate themselves from competitors and keep staff satisfied. And it works. When you first start out in tax, there’s not a whole lot to get excited about in terms of, you know…your actual job. It’s a lot of deadline-driven hours for not a lot of pay, and the subject matter is largely incomprehensible. What keeps kids in the industry is the culture: the friendships they forge around their firm via the open bars, long lunches, and free tickets to the ballgame. It’s that stuff that make public accounting palatable until the pay picks up and the tax law starts to click.

As we’ve just witnessed, however, culture disappears in a hurry when everyone is relegated to working from their spare bedroom. Many of us haven’t even seen a coworker since March, let alone shared a meal or a beer with one. In 2020, we stripped out so much of what makes our job enjoyable, and all we were left with was the work.

And boy, was there a lot of work to be had. With the deadline being extended until mid-July, this past year introduced the never-before-seen SEVEN MONTH tax season. And while we’re no strangers to hard work, in 2020 those hours felt a lot less rewarding. We didn’t get to see our clients, to shake their hands, buy them a lunch, and talk about the project we just finished or what comes next. Most people didn’t get into tax to pore over numbers all day; they want to help someone. And while we may actually be doing more of that than ever as we guide individuals and businesses through the pandemic, because we’ve become isolated from our client base, the sense of accomplishment that comes from servicing their needs has become elusive.

Now, not everyone’s job satisfaction is dependent on networking with coworkers and clients. Take me, for example: roughly 95% of the time I wake up praying that my day will be free from human interaction; it’s part of what makes me so fun at parties. So if it wasn’t the happy hours and client lunches that kept me placated in public accounting during my formative years, what was it?

Learning.

I love to learn, and while busy seasons are torture, if you sit back and listen to those with wisdom to impart, by the end of that miserable stretch you’ll emerge a whole lot brighter than when it began.

For today’s developing staff, however, forced isolation made 2020 a lost year. No asking a question of the person in the cube next to them. No getting pulled into an office to go over what you got wrong. And while Zoom might be fine for conference calls, family gatherings, and inadvertently exposing yourself to your colleagues at the New Yorker, it’s not the the ideal way to learn the finer points of Section 263A.

So…if what I’ve said is true, if we’re going to be working from home for the better part of 2021, and culture, client contact, and continuing education are going to be hard to come by — what can we do to make sure 2021 is better than 2020? How can we avoid burning out thousands of talented people?

Well, that’s where the resolutions come in. The first four are specific to weathering the impact of COVID and surviving the separation that has come to define our collective work experience. The fifth is a technical resolution, because I’ll be damned if I’m ever going to write one of these without directing readers to crack the pages of the IRC, and courtesy of COVID, one provision of the Code may soon become VERY popular.

Let’s get to it…

Resolution #1: Unplug Every Day

Last March, when much of the American work force was sent home en masse, we were excited by the possibilities. After all, our industry isn’t exactly known for its remote work arrangements or work-life balance, and the thought was, if some historically unfortunate circumstances were thrusting the former upon us, at least we’d get to enjoy a bit of the latter.  

Fast forward to today, and most of us haven’t seen the inside of an office for nine months. We’ve spent not one, but two busy seasons cranking out tax returns in our pajamas. But how’s that work-life balance working out for us?

It’s not. And here’s why: working from home sounds great, and it can be…if you’re the only one working from home. Trust me, I did it for 14 years before COVID came along and shut down our offices, and it was awesome. Typing away in your bed and grabbing a mid-day mountain bike ride while your coworkers don their itchy pants and battle traffic? That’s heaven.  But when everyone works from home, the situation quickly loses its luster, because something far worse than having to head into the office arises. As we’ve all recently experienced, when everyone is working remotely, there ceases to be any delineation between work and personal time.

Think about it…within a few weeks of the beginning of quarantine, the conventional work calendar disappeared. Evenings stopped being quite as sacred once schools were shuttered and we were home with our families all day, so instead, we worked. With no need to hop in the shower and drive to the office, we started firing off emails at 6 AM. With weekends spent confined to our homes, we started scheduling conference calls on Sunday afternoons. As a result, there is no longer a start or end to a work day, or even a work week, for that matter. There’s just…work.

As I said, I’m not new to the work-from-home game, and having 14 years of experience has given me an interesting perspective of the changes in our industry over the past nine months. When you’re not physically in an office, you get in the habit of gauging you firm’s intensity level via your email inbox. And until quarantine, my inbox followed a VERY predictable pattern. Monday morning the emails would start showing up, but even during the busiest of times, things would tail off by 7 PM. On Fridays my inbox would slow down considerably, and interestingly enough, the decrease would be more dramatic during busy season, presumably because if people are told they’ve got to work Saturdays, they are going to sleepwalk through Friday. On Saturdays during busy season my inbox would see some action, but Sundays have ALWAYS been a ghost town.

But now…my inbox looks no different on a Thursday night than a Monday morning. Sundays are just as busy as Saturdays, which are just as busy as Tuesdays. Hell, I just got a question about the deductibility of payroll taxes while I was writing this, and it’s 7:30 PM on New Year’s Eve. Coworkers and clients alike have decided that the time of day and day of the week no longer mean anything, and in our current environment, you can’t blame them. We’ve got nowhere else to go, nothing else to do, so we open up our computer, crank out some work, and fire off some emails and invites to those we’re working with, assuming that they’re doing the same. But damn is it exhausting. 

And while this pace isn’t sustainable for anyone, it’s particularly damaging to younger staff. It makes sense: as you move up the chain, you answer to fewer and fewer people. As a result, when working remotely, a partner can — to a small degree – control their schedule and manage their workload and personal responsibilities. Some work from 6 AM to 4 PM, others from noon to 10 PM, and then there’s people like me, who work a bit in the morning, disappear for a bit to go play, and then work again once the kids are pumped full of Benadryl and down for the count.

But think about what those differing schedules mean for younger staff who answer to a number of different people. It’s BRUTAL. They have to be available for Partner A, who likes the morning shift. But they also have to be available for Partner B, who’s a night owl. Then of course, depending on their level of experience, they may also have to be available for a stable of managers, seniors and experienced staff. So when is it OK for a young tax pro to shut it down? When do they get to go play for a while?

The answer, if you listen to the kids around the industry, is never. When I had a post-tax season debrief with a few of the staff in my firm’s Denver office, to a person they described a feeling of CONSTANTLY being in fight-or-flight mode; they don’t think they can ever turn off their brain and disconnect for a stretch of time – weekday or weekend — because they feel like everyone else is constantly working, even when they’re most assuredly not. One staff even pointed out something I’d never considered, saying “Tony, your Skype messenger has you marked as ‘available’ from the minute I wake up until I go to bed…if you’re working that much, shouldn’t I be?”

What this person failed to realize, however, is that a solid 40% of the time my Skype says I’m “available” I am either a) binging Letterkenny, or b) picking fights with Eric Hjerpe on Twitter. Unbeknownst to me, that little green circle signaling my availability was constantly reinforcing the message to my team that I’m always working, and that they should be too.

Put it all together, and in 2020, it’s as if every tax pro in America has been forced to adopt the business model of the neighborhood 7-11: we may not always be doing business, but we always have to be open for business.

So what can we do about it?

In 2021, we’ve got to take a stand. I don’t care if you’re two weeks or twenty years into your career, you have to accept that you can’t be “on” for 16 hours a day. If I didn’t get outside for an hour or two a day; I’d burn out of this industry before February; why should I think you’re wired any differently?

You can’t bust your ass for Partner A all morning and for Partner B all night. Make 2021 the year you commit to taking some time for yourself, and I don’t just mean on weekends or vacations. I mean EVERY. DAY. Pick a window, and turn off your phone. Block off a few hours in your Outlook calendar. Power down your computer and go do something that makes all of the stress and numbers and Zoom calls worth it. Watch a movie. Go for a run. Play with your dog (You should definitely play with your dog). Of course, you’ll want to respond to everything you’ve missed while you were gone, but trust me, there’s nothing else going on right now, you can send off a few emails when you plug back in. If you don’t shut it down for a few hours each day, you’re never going to make it through another 7-9 months at this pace.

If anyone gives you hell for not being available for a two-hour midday stretch in an environment where evenings and weekends are no longer off limits, then that’s on them; not you. Which reminds me…

Resolution #2: Don’t be the Reason Someone Quits the Industry

….it doesn’t HAVE to be this way. Just because there’s no one around to tell us when to start and stop working doesn’t mean we can’t come to an informal, unspoken agreement to appreciate the fact that not everyone can or wants to sit in front of their computer all day. How about we start being sensitive to the sanity of the people who are working with us and stop behaving like work never stops. Here are a few tips:

1.     Every firm has at LEAST one person who makes a habit of sending an avalanche of emails during the middle of the night. And these ain’t “I’m just checking in to see how you’re doing” emails. These are “Research this issue and I need an answer ASAP” emails. Don’t be that person.

I know it probably shouldn’t matter what time of day a message lands in your inbox, but there’s just something about the ones that come in when you’re sleeping that feel particularly, well…intrusive.  Making matters worse, for reasons I can’t explain, whenever I wake up to a new batch of emails, I somehow feel compelled to address them right away. It’s like I fall into the trap of thinking, “Well damn…if Joe felt the need to send that email at 3 AM, it MUST be important. I better knock that thing out in a hurry.” YOU SEE WHAT YOU DID, JOE? I went to bed with my house in order, and now, through no fault of my own, I woke up to reprioritized to-do list and a renewed sense of urgency. That ain’t right.

So if you’re a night owl who likes to go to bed with a clean slate, try and remember that the people who work with you like to WAKE UP to a clean slate. This is exactly why all modern email systems allow you to draft an email and schedule delivery for a future time. It may seem like a small, unnecessary gesture, but it’s not for your benefit, it’s for everyone else’s. Use it.

2.     Let’s cool it with the early morning/late night/weekend conference calls, ok? And if you’re reading this and currently work at RubinBrown, I realize that when COVID hit, I asked the “technical team” to meet DAILY at 7 AM, but never forget that while I may spend one day a year doling out advice, I’m generally an idiot.

Here’s a tip: when scheduling calls, pretend that 1) offices are still fully occupied, and 2) no one has a cell phone. That way, you’ve got to try and schedule a call at a time when, in a different reality, everyone would be in the office and have access to their office line. No more 7 AMs or 8 PMs or Sunday afternoon calls. It’s another small gesture, but I promise, it’ll help.

3.     As my Skype story from earlier indicates, people who work for you are super sensitive to YOUR work schedule. They feel as long as you’re on the clock, they should be too. So when you’re “off work,” set your messenger app to “off work.” Crazy, right? And while you’re at it, throw an out-of-office reply on your email when you take a personal day so your staff knows it’s OK for them to take a day once in a while.

As an industry, let’s make an effort to stop pretending that there’s honor in working every minute of the day. Earlier this week, a conversation with a coworker evolved into the admission that while my family was visiting me over Christmas, on our way to the mountain my brother-in-law would drive so I could get some work done before skiing. Those words had barely left my mouth when I realized that they didn’t make me sound like a dedicated employee; they made me sound like an assh…well, you get the idea. Don’t be like me: make sure the people you interact with at work know that you’re not a robot, and that you have no expectation that they are, either.

Resolution #3: Create Some Culture

If you value your team members, you have to recognize that with the aforementioned “culture” currently nonexistent, the only thing standing between them and a new job is the right call from a headhunter. Think about it: if you’ve got some 25-year old whiz kid working for you from their bedroom, and she gets an offer from your competitor that will pay her an extra $5K to continue working from her bedroom, why wouldn’t she take it? At the moment, what differentiates her experience at different firms when in either scenario, she rarely interacts with her coworkers or clients?

As a result, we have to make a real effort in 2021 to bring culture to everyone who works with us, from staff to admin to processing people to even those lowly, lowly auditors. You can’t overstate how much this stuff matters. At my office, each partner was assigned a small team and told to routinely get together throughout the pandemic via Zoom. When I conducted a post-tax season check-in with the staff, those who had regular contact with their teams were infinitely more satisfied than those who didn’t. That’s low hanging fruit: have a formal process to gather a few team members and talk about anything BUT tax.

But don’t stop there. Send them a small gift. Or a big gift. Start planning some extravagant post-COVID experiences for your team. And for God’s sake; thank them for all they do. They have to feel that, despite their isolation, they are a part of something, or else they’ll choose to become a part of something else.

Resolution #4: Keep em’ Learning

It’s ironic: during a year in which we had more time than ever on our hands, we found it harder to use that time to raise the next generation. I get it: since COVID hit, we’ve been in self-preservation mode. We’ve been preoccupied with protecting our loved ones and ourselves. For those of us with kids, when we’re not working, we’ve had to play the role of educator as well. Professionally, we’ve dealt with a never ending tax season, during which we had to invest a ton of hours learning new law to carry BACK to previous years before we could even begin to apply different areas of that same law to current year returns. Put it all together, and few if any of us finished a long day and thought, “You know, now would be a great time to teach Sally about Section 338(h)(10) elections.”

But we’ve got to do better in 2021. Growth in this job is not optional; each of us has an obligation to impart what wisdom we’ve accumulated to the next in line. If 2020 truly was a lost year for many young tax pros, we can’t afford to duplicate that mistake in 2021. And with technology having evolved to the point where you can hop on a Zoom, share multiple screens, and walk someone through the mistakes on a return or a few pages of a purchase agreement, there’s no reason we SHOULD duplicate that mistake.

In an ordinary year, there are two barriers to teaching: willingness and time. With the lockdowns, we’ve got nothing but time; we’ve just got to collectively muster the willingness. Is teaching via Zoom or Teams ideal? Of course not, but we’ve got no choice. In my experience, while gripes over hours or pay may cause talented people to jump to another firm, boredom will cause them to flee the industry altogether, and when that happens, we all lose.

Intellectual stimulation has always been a major drawing card to a career in tax, and there’s no reason for that not to continue. In 2021, make a promise to yourself and those you work with that the traditional processes will not go by the wayside just because we no longer share the same physical space. You won’t clear your own points because it’s “easier.” You’ll walk your staff through new legislation. You’ll take advantage of the extra time we’ve been given and organize seminars for your team members on timely topics. Which reminds me…

Resolution #5: Dive into Section 108

if you’re looking for a topic to dive into, you could do far worse than Section 108. As a reminder, if a lender forgives a taxpayer’s debt, generally, that forgiveness creates taxable “cancellation of debt” (COD) income under Section 61(a)(11). There are, however, a host of exceptions to that general rule under Section 108, which provides exclusions — although they may be more accurately described as deferrals — from COD income in certain situations.

Among the exclusions are:

  1. Section 108(a)(1)(A), which provides that no COD income arises if the debt is forgiven as part of a chapter 11 bankruptcy,
  2. Section 108(a)(1)(B), which excludes COD income to the extent the borrower is “insolvent” — meaning the liabilities exceed the FMV of the borrower’s assets, and
  3. Section 108(a)(1)(E), which allows an individual to exclude up to $750,000 in COD income upon the forgiveness of a mortgage on the taxpayer’s principal residence.

Why learn about Section 108 now? Look around. Businesses have been destroyed by lockdowns, and negotiations between borrowers and lenders will be a recurrent theme throughout 2021. There will be bankruptcies, there will be debt modifications, and there will be foreclosures and short sales. In order to properly determine the tax consequences, you not only need to be well versed in Section 108, you’ll need to get familiar with the Tufts and Aizawa cases as well. Or, you could just read this…

For many reasons, the past twelve months will not soon be forgotten. The new year brings the promise of an effective vaccine, and hopefully at some point, a return to normalcy. These things take time, of course, and so from a professional standpoint, we can expect our circumstances to look much like they did in 2020. But just became we may remain isolated doesn’t mean we have to repeat the mistakes of the year prior. Let’s all agree to take some time for ourselves, return a sense of normalcy and culture to our jobs, and embrace the responsibility of teaching the next generation.