Transcript
Speaker: Welcome to the Solarpreneur Podcast where we teach you to take your solar business to the next level.
Speaker: My name is Taylor Armstrong.
Speaker: I went from $50 in my bank account and struggling for groceries to closing 150 deals in a year and cracking the code on why sales reps fell.
Speaker: I teach you to avoid the mistakes I made and bring in the top solar dogs of the industry to let you in on the secrets of generating more leads, falling up like a pro and closing more deals.
Speaker: What is a Solarpreneur you might ask?
Speaker: A Solarpreneur is a new breed of Solar Pro that is willing to do whatever it takes to achieve mastery and you are about to become one.
Speaker: Why I got audited by the IRS and the many mistakes I made.
Speaker: That's what we're going to be talking about in today's podcast.
Speaker: Welcome to the Solarpreneur Podcast.
Speaker: My name is Taylor Armstrong.
Speaker: We're here to make your life easier as a solar professional and help you close more deals, generate more leads and referrals, and have a much better time in the solar industry.
Speaker: Hope you're doing well.
Speaker: Thank you for making the Solarpreneur Podcast the first listen of every Tuesday and Friday.
Speaker: And speaking of every Friday, I want to apologize because we did not have an episode go out Friday.
Speaker: I promised an episode with Mr. Brian Leposki.
Speaker: He was going to be on talking about his CRM and how he built his company from the ground up after coming from SolarCity, but...
Speaker: went to upload the podcast and unfortunately we had an uploading error with our podcasting software and the entire time he talked it was dead silent not even crickets so figured you probably didn't want to just hear me talking and asking questions without a response so we did not get that podcast out
Speaker: We are working on a solution to possibly recover the file, but looks like we might have to go ahead and record a new one.
Speaker: So appreciate Brian and his patience and apologize again if you were expecting an episode last Friday, but didn't get one.
Speaker: I know heartbreaking, probably couldn't sleep, probably couldn't function.
Speaker: But life goes on.
Speaker: Learn from it.
Speaker: And my lesson was is to check beforehand if the file is actually uploaded.
Speaker: Because if I would have verified if the audio was good the day after we recorded it, probably would have made it a lot easier to recover and troubleshoot.
Speaker: But I didn't even notice it until we went to click upload.
Speaker: And the audio file was bad.
Speaker: Didn't work.
Speaker: So always double check things and look into things sooner rather than later.
Speaker: That's the lesson that I learned.
Speaker: But speaking of lessons, let's jump into another important lesson, and that is how to not get audited.
Speaker: I guess I can't tell you any foolproof secret because I am being audited right now.
Speaker: But I'm just going to tell you my experience.
Speaker: This is my first time being audited.
Speaker: I hope and pray that none of you listening to the show have to go through this.
Speaker: It is a nightmare.
Speaker: It sucks.
Speaker: It's been taking time away from selling.
Speaker: It's been adding the stress levels.
Speaker: The IRS is showing up at my door.
Speaker: They're hunting me down.
Speaker: So whatever you do, don't...
Speaker: try if at all possible to not get audited and I'm gonna share with you some things that I could have done better that I think maybe would have prevented this but who knows maybe they just had my number no matter what I did so I'll tell you what happened to me about three four weeks ago and those of you that follow me on social media you may have seen this but I posted that I got a letter in the mail
Speaker: from the IRS.
Speaker: And I put a photo on my story, but the letter, it looked kind of sketchy, to be honest.
Speaker: It came in an envelope, had like six stamps on it, was handwritten.
Speaker: So my first thought was, did this come from like China or something?
Speaker: Why is it handwritten?
Speaker: And why is there like 20 stamps on it?
Speaker: Like it has to be a scam.
Speaker: So that was the first red flag that came up in my head.
Speaker: This is a scam.
Speaker: There's no way this is from the actual IRS.
Speaker: Then I open it up and it says, Dear Solarpreneurs, your employment tax return shown above has been selected for examination.
Speaker: And then it tells me it tells me to contact Min Pan.
Speaker: So that was another red flag.
Speaker: No offense, Min, but I don't know, just with all the stamps on it.
Speaker: And then with like a Vietnamese name, I'm just getting even more red flags.
Speaker: And then on top of all that, there were a few typos in it.
Speaker: And the letter tells me to call Min on September 15th.
Speaker: And you can reach me at the number shown above.
Speaker: So I'm just thinking, okay, if they're telling me to reach out to this person personally, like IRS, they wouldn't talk like that in the first person.
Speaker: Wouldn't they talk like, I don't know, official business?
Speaker: It looked like a personally typed out letter.
Speaker: So there were just a lot of red flags.
Speaker: I mean, after that, yeah, the pages did have like her ID number and, you know, the letter...
Speaker: 3850 from the IRS.
Speaker: But I logged in to the IRS website.
Speaker: There was nothing.
Speaker: You can log into your IRS account.
Speaker: I think you have to create an account.
Speaker: So that was my second idea.
Speaker: I'm like, okay, I'm going to log into here, see if there's something about being audited that I need to pay attention to.
Speaker: Log in.
Speaker: There's nothing in there.
Speaker: I send an email to the IRS.
Speaker: I don't get any response back to verify that this was like an official document from them.
Speaker: So all things considered, I'm like, okay, there's no way that this is official.
Speaker: This is a scam.
Speaker: Tossing this in the trash.
Speaker: Don't have to worry about it.
Speaker: I'm good.
Speaker: I'm clean.
Speaker: Let's continue selling.
Speaker: And I thought I was good, but just my luck.
Speaker: I'm doing my thing.
Speaker: This is right as we're about to run a half marathon.
Speaker: So I'm logging a lot of miles running outside.
Speaker: One day during one of my long runs, it was like, I don't know, 10 mile run I was doing.
Speaker: I get a call from my wife.
Speaker: She says, hey, there's someone at the door from the IRS.
Speaker: Can you come back here?
Speaker: And I'm like, I'm like six miles from the house.
Speaker: I can't really come back.
Speaker: So you're gonna have to tell him to wait.
Speaker: And she's like, well, it looks pretty official.
Speaker: I don't know.
Speaker: You probably should hurry back here.
Speaker: And I'm like, okay, this is ridiculous.
Speaker: Now these scammers are so elaborate that they're literally showing up to my house.
Speaker: No way.
Speaker: So I told my wife, okay, we'll put me on the line with them.
Speaker: She passes this IRS representative the phone.
Speaker: And sure enough, it's Min on the same person that sent me the letter.
Speaker: And she says in her Vietnamese accent, but she tells me,
Speaker: Hey, I'm here at the house sitting at your table.
Speaker: We're here to go over your taxes.
Speaker: Where are you at?
Speaker: And I'm like, well, I'm running.
Speaker: I didn't know you were coming.
Speaker: She's like, well, did you not get my letter that said we're showing up that day?
Speaker: I go, yeah, but I thought it was a scam.
Speaker: I mean, it didn't seem very official.
Speaker: And she's like, no, well, this is my ID number.
Speaker: It's official.
Speaker: You're being audited.
Speaker: So we have an appointment.
Speaker: So long story short, I reschedule with her.
Speaker: And at this point, I'm like, okay, if they're showing up to my house, must be legit.
Speaker: Talk to my tax guys a little bit more and some other people.
Speaker: And sure enough, it's legit.
Speaker: Okay.
Speaker: I mean, at least to this point, it's legit.
Speaker: Maybe it is so elaborate that they're so deep in it now.
Speaker: And it's still not legit.
Speaker: But yeah.
Speaker: After verifying with my tax guys and getting more calls, having appointments, I'm pretty convinced now that it is legit.
Speaker: So if you get letters like that, definitely take them more serious than I did because this lady was not impressed.
Speaker: Luckily, she lets me reschedule.
Speaker: And we go back and forth.
Speaker: I was out of town for my half marathon.
Speaker: Another day, I had something else come up.
Speaker: So I had to reschedule a couple times, actually.
Speaker: But then by the time we finally get on the phone, she had sent me a long list of like 20 things I was supposed to get her.
Speaker: And we talked the first time.
Speaker: She's like, yeah, we'll just get as much as you can.
Speaker: Have your tax guys look for it, whatever you need to do.
Speaker: And so there's I'm looking at the list right now, but they're literally, I think.
Speaker: 20 different, about 25 different items I was supposed to get her just of basically like all my expenses for 2020 and 2021.
Speaker: Bank statements, copies of prior audit reports, state employment tax returns, copies of 2020 forms, W-2, list of employees, all this, all this, all these shenanigans, right?
Speaker: A ton of stuff.
Speaker: So of course, I'm just like, forget about it.
Speaker: I'm not really going to.
Speaker: I'll get a couple of things.
Speaker: I'll send my tax guys.
Speaker: But I get on the phone with her and she's asking me for all this stuff.
Speaker: I'm like, I don't think I have very much.
Speaker: She starts grilling me.
Speaker: And this is where it gets real.
Speaker: And this is where she was not even impressed even more.
Speaker: We're going through all of it.
Speaker: She's asking me.
Speaker: I'm working on getting it to her.
Speaker: And then finally, I get my tax guys on the line.
Speaker: And keep in mind, 2020, I was using different tax people than I am right now.
Speaker: I'm using Pi Syndicate right now, which they have been great.
Speaker: They're sponsoring this show.
Speaker: And maybe this wouldn't happen if I use them back then.
Speaker: I don't think they're doing taxes.
Speaker: But I was using someone else.
Speaker: And what happened was I filed for this employee retention credit called the ERC.
Speaker: It was something they were doing during COVID.
Speaker: And I think I got around $10,000 for it.
Speaker: I heard about this from my tax guys at the time.
Speaker: And they're like, oh yeah, you should file all businesses, LLCs, S Corp.
Speaker: You can get it.
Speaker: So I'm like, all right, sweet, free money.
Speaker: They get it for me.
Speaker: And I don't know if it's something they did wrong.
Speaker: I'm not here to point fingers.
Speaker: But for whatever reason, the IRS is convinced that I should not have gotten this.
Speaker: So I get on the phone with Min.
Speaker: My tax people are on who filed this for me.
Speaker: And Min just starts grilling us.
Speaker: She's like, okay, well, first of all, you had to have employees to get this.
Speaker: Who was your employee?
Speaker: And my first answer was, oh,
Speaker: Hey, solarpreneurs.
Speaker: Are you sick and tired of spinning your wheels every month and not seeing your cells increase?
Speaker: Well, so was I. And the truth is I was never able to improve it until I figured out what was going wrong.
Speaker: So that's why I'm excited to announce for a limited time, we are doing a free cells diagnostic.
Speaker: You'll break down your cells process.
Speaker: to figure out the holes in your business and see how we can help you improve.
Speaker: So at now, we have six bucks for this month.
Speaker: So book a call now.
Speaker: Don't miss out.
Speaker: What you're going to do is send an email to taylor at solarpreneurs.com.
Speaker: That's taylor at solarpreneurs with an s dot com.
Speaker: I'll send you out a calendar link and we will figure out a time that works best.
Speaker: So shoot that email and let's increase your sales.
Speaker: I've never really had employees.
Speaker: I have a virtual assistant, but she's in the Philippines.
Speaker: So I don't list her as an employee because it gets all complicated with that.
Speaker: So I told her first, oh, I don't have employees.
Speaker: And then right off the bat, she's like, okay, what were you doing even filing for this?
Speaker: So I'm like, oh, shoot.
Speaker: Probably should tell her that I did have employees because that's why I was supposed to get this.
Speaker: So I remembered, and I'm not saying lie to your IRS representative, but what I didn't remember is that in 2020, I was having my wife actually...
Speaker: work in the business.
Speaker: She was helping me organize lists, organize my CRM, do customer follow-up, stuff like that.
Speaker: And so that is how I actually was able to qualify and get this ERC because I listed my wife as an employee in the business, but was not a good look when I told Min that I don't have an employee back then.
Speaker: Okay.
Speaker: So if you're being audited, make sure you remember what happened, why things were filed, what was going on,
Speaker: Remember that because it's a bad look and it's not doing me any favors by having to like try and remember all these things.
Speaker: So try to get your story straight.
Speaker: She probably thinks I'm just lying through my teeth at this point because I at 2020 I had no I couldn't remember a thing what happened in 2020, let alone last week.
Speaker: All right.
Speaker: So she's asking this.
Speaker: She's already suspicious.
Speaker: Then the second thing that gets me in trouble is she's like, OK, well, the other thing you're supposed to have COVID during this.
Speaker: So I need proof that you got COVID.
Speaker: I'm like, OK, I mean, I don't really have I didn't record when I got sick or anything.
Speaker: What what do you mean?
Speaker: She's like, well, send me your negative COVID tests.
Speaker: Send me anything you had.
Speaker: And I'm
Speaker: I didn't have anything.
Speaker: I don't have like negative COVID tests.
Speaker: I didn't have.
Speaker: Yeah, I did have the COVID symptoms.
Speaker: But to be honest, I didn't like I don't maybe I got tested back then.
Speaker: If I did, I did not save the test.
Speaker: I didn't save anything.
Speaker: I didn't go to the doctor.
Speaker: I'm not doing that.
Speaker: So she's saying she's like, look, in order to get this, you need to have some type of proof that you actually had COVID.
Speaker: So I didn't have any of that.
Speaker: And it blew my mind.
Speaker: These guys want proof of everything.
Speaker: So there's a lesson for you.
Speaker: Anything you file, anything that happens in the taxes, make sure you have proof of it.
Speaker: Obviously, it shouldn't be Nita said that you need to keep track of all your business expenses.
Speaker: That's another thing.
Speaker: We started going through that.
Speaker: She's asking me, hey, well, you listed $10,000 on...
Speaker: education for this year.
Speaker: What did you do?
Speaker: I'm like, I don't know.
Speaker: I just took a few courses, whatever.
Speaker: These people are ruthless.
Speaker: At least Min was.
Speaker: So make sure you know exactly how it's classified.
Speaker: And I do have another meeting with her.
Speaker: And the next time she wants like solid answers on everything.
Speaker: So that's actually what I'm going through right now.
Speaker: I have to go through every single expense, go back through my business expenses and figure all this out.
Speaker: So it's a very unpleasant experience.
Speaker: As you can probably tell, there's just so much to be done.
Speaker: And really just, I would say more than anything, my biggest lessons learned were probably a couple things there.
Speaker: Number one, just question things when you can get free money like that.
Speaker: I had a lot of friends that were getting this emergency retention credit.
Speaker: They made it sound super easy.
Speaker: My tax guys at the time made it sound super easy.
Speaker: But I wish I would have dug a little deeper, done some research into it instead of just saying, oh, yeah, send me my free money, whatever, because I knew nothing about it.
Speaker: And I'm just like, I don't know.
Speaker: My tax people did it.
Speaker: And that goes with taxes in general.
Speaker: Make sure you have some basic knowledge just about taxes in general.
Speaker: You don't need to be an expert, but a great book is
Speaker: that has helped me with I'm still not done reading it but everything I know about taxes really up to this point um good books called rich dad advisors tax-free wealth it's by Tom Wilray that was recommended by my friend Brady Slack who is a tax guy himself works with a lot of solar people but that's a great just a little fundamental book explains you you know a lot of the fundamentals of tax it goes pretty deep too
Speaker: So I'd recommend listening to that.
Speaker: Know your stuff, especially if you are getting audited or have to get on an appointment with an IRS agent.
Speaker: It's going to make you look a lot better if you actually know some of this stuff.
Speaker: Okay.
Speaker: And then the second thing is just keep detailed records of what you're actually doing.
Speaker: In 2020, when I wrote out all my business expenses and sent it in to my tax people, I just estimated on everything.
Speaker: Like, okay, tell me what you want to write off, put the amounts, and that's it.
Speaker: I'm just like, okay, well, I spent quite a bit in education this year.
Speaker: Let's put 10, 20 grand.
Speaker: Okay.
Speaker: Yeah, I spent quite a bit in vehicle expenses, but guess what?
Speaker: I didn't go out and actually calculate this.
Speaker: So, and it's coming back to bite me.
Speaker: So my first recommendation is use a bookkeeper if you can, because now with Pi Syndicate, they are doing my bookkeeping.
Speaker: Now I'm going to know exactly where the expenses are categorized and I can go into QuickBooks at any time and see all this.
Speaker: So I don't have to just guess on it like I was doing in 2020.
Speaker: So either use a bookkeeper or if you're not, just keep detailed records.
Speaker: Hey, you don't want to look like an idiot like me.
Speaker: So those are my biggest lessons learned.
Speaker: Number one, just question the free money.
Speaker: Learn more about what you're actually applying for.
Speaker: Keep detailed records and understand basic tax questions.
Speaker: And on top of that, these are some that I didn't necessarily think about as much, but I just did a little research into how to prevent tax audits.
Speaker: So I thought this may help a few of our listeners here.
Speaker: So here's a couple of good ones.
Speaker: It says, number one, don't report a loss.
Speaker: Seems like a good idea.
Speaker: Don't report a loss in your business.
Speaker: Always report a little profit.
Speaker: Number two, be specific about expenses, which I did not.
Speaker: I was not specific about expenses.
Speaker: Number three, provide more detail when needed.
Speaker: Yeah, so just make sure you keep your detailed records about what's going on.
Speaker: Number four, be on time.
Speaker: So yeah, if you're the type of person that's always filing an extension, that's always waiting until the last second to do their taxes, maybe consider getting them in early.
Speaker: Apparently, it's less likely to get flagged for an audit.
Speaker: And they've had so many new IRS agents hired.
Speaker: I probably wouldn't have got audited if all these new freaking IRS agents weren't brought on board.
Speaker: So thanks a lot, Biden.
Speaker: But it is what it is.
Speaker: And then number five, avoid amending returns.
Speaker: Number six, match up all your paperwork.
Speaker: Number seven, don't use the same numbers repeatedly, which that's what I was doing back a couple years ago.
Speaker: It was always the same write-offs, always the same numbers.
Speaker: Number eight, don't take excessive deductions.
Speaker: Just not overestimating the extent of your donations or excessive home office deductions, excessive deductions for meals, travel, etc.
Speaker: Number 10, don't leave questions blank.
Speaker: Number nine, sorry, skip that.
Speaker: Use Schedule C, which asks your tax people if you don't know what that is.
Speaker: So anyways, hope that helps some of you to not get audited.
Speaker: That was my experience.
Speaker: It sucks.
Speaker: Don't do what I did.
Speaker: Hope you can avoid all of the men's in your life.
Speaker: Men, if you're listening to this for some reason, I love you, but please don't audit me again.
Speaker: Okay, so that's the podcast today.
Speaker: Send this to someone that hates taxes or could use some help on their taxes.
Speaker: Remember, I am not a CPA.
Speaker: This is not financial advice.
Speaker: This is just my experience being audited for the first time, hopefully the last time.
Speaker: We'll see you guys on the next episode.
Speaker: And we got some great guests coming up.
Speaker: I'm going to make sure to check the recordings so they actually get scheduled this time.
Speaker: But we'll see you guys on the next one.
Speaker: Happy selling.
Speaker: Peace out.
Speaker: Hey, solopreneurs.
Speaker: Are you sick and tired of spinning your wheels every month and not seeing your sales increase?
Speaker: to improve it until I figured out what was going wrong.
Speaker: So that's why I'm excited to announce for a limited time we are doing a free sales diagnostic.
Speaker: You'll break down your sales process, figure out the holes in your business and see how we can help you improve.
Speaker: So at now we have six bucks for this month so book a call now.
Speaker: Don't miss out.
Speaker: What you're going to do is send an email to taylor at solarpreneurs.com.
Speaker: That's taylor at solarpreneurs with an S dot com.
Speaker: I'll send you out a calendar link and we will figure out a time that works best.
Speaker: So shoot that email and let's increase your sales.
