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Tax News Now Ep. 9 – Community, Collaboration and R&D Tax Incentives with Randy Crabtree
271 Plays6 days ago
Mark Gallegos, Tax Partner at Porte Brown, and his guest delve into the leading tax topics each month. Gain insights from their expertise on the current tax landscape, with 2025 looking like a pivotal year for expiring tax provisions and potentially a new tax policy landscape. Recognizing the many uncertainties tax professionals face this year, Mark and his guests emphasize the opportunities to strengthen client relationships and drive future revenue for tax practitioners.
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Transcript
Introduction and Guest Welcome
00:00:09
Speaker
Hey everyone, welcome to Tax News Now. I'm your host, Mark Galagos. And today we're joined once again by a guest who truly embodies innovation in our profession. Our guest is Randy Crabtree, co-founder and partner at TriMerit, specialty tax professionals, host of the unique CPA podcast, and the visionary behind the Bridging the Gap Conference.
Bridging the Gap Conference Overview
00:00:29
Speaker
And if you've been in Denver this past July, attending the Bridging the Gap conference, it's just not another accounting event, right? It's it's a part conference, part community, and part spark plug for what's possible when CPAs and accountants come together that share ideas.
00:00:44
Speaker
Today, we're going to talk dig into what's made this year's conference so impactful, the lessons Randy took away, how the event continues to evolve, and what's ahead for next year. And a lot, of course, we'll also talk about what's happening in the tax law since we last spoke regarding the HR1 bill that was signed by the president on July 4th and what it means for Section 174 and research and development tax credits.
00:01:09
Speaker
So Randy, welcome back. It's great to have you here again. Mark, thank you. Thanks for having me. and And thanks for being a big part of Bridging the Gap. ah You were on our advisory council and ah ah made a big impact with what you contributed. So thank you for that.
00:01:24
Speaker
Yeah, thank you, Randy. That's awesome. um No, it's it's a great event. And, you know, now you bring it up. Let's just start there. Let's go to Denver in July. We're bridging the gap 2025. I heard nothing but energy and excitement from folks who were there talking to everyone, really feeling the vibe of what was going on.
00:01:42
Speaker
And then looking back, what's the first thing that comes to mind when you think about this year's event? Obviously, maybe a month or so ago. Yeah, the first thing is community that comes to mind for me, the community that has developed over the three years of hosting this conference and the community that just somehow went through the roof this year in Denver. We had the probably an extra 100 plus people over last year and somehow everybody integrated into, you know, one um community in minutes. It felt like you walked in the doors and you were part of a group that some people been there all three years, some people one year.
00:02:22
Speaker
But that community aspect of supporting each other was a number one for me. Yeah, and i think I think community is such a huge um topic for people, especially in the accounting industry. I know when I first came into the accounting industry working in a bigger firm, I felt like community was something that was you wouldn't talk about and nor would you share with anybody, let alone go to a conference and actually hang out with the people that are maybe doing the same thing you do. So, um you know, to see in my life now to go to an event like Bridging the Gap for the last three years, but really see the involvement of it, it's just, it's highly amazing in my opinion.
00:03:02
Speaker
Yeah. it The thing is that I'm flying high. See, I don't even have words right now. I'm flying high from this year still. And every year I do. But the just stressing the fact that 100 plus new people, and even more than that, we had 100 more than last year, but the new had to be half the people in the room were new, which is great.
00:03:21
Speaker
But the impact that they had immediately to creating the atmosphere and the vibe in that room was amazing. And it makes me think that this is just so needed. it Like there was just a craving for something like this, for a place where people can just be themselves and and share with others, whether they're it's there their struggles or their successes, um whatever it is, it just...
00:03:47
Speaker
it just melded together. I don't even have the words to say it, but, um but believe me, I'm going to be ah flying high ah over the next year, just anticipating next year.
00:03:59
Speaker
No, and in rightfully so. i Fantastic event. Every year you raise the bar, you know, you and the team. And so what have you, what do you think about but this past year compared to the first two years of the event?
Conference Improvements and Engagement
00:04:12
Speaker
but What did you do differently that really raised the bar to kind of take it to another level that inspired people to come for the first time, you think?
00:04:20
Speaker
I think obviously our marketing team does an amazing job. There's, know, what is that? Four or five people on that team that just run with this. we none ah Nobody had ever run a conference before the first one we did um three two years ago, the know the number one conference we had and in twenty three August of 23.
00:04:38
Speaker
um So they do amazing job. But really, one of the key things I think was me just... not getting in the way at all this year.
00:04:50
Speaker
ah me yo know i I had the vision of what this is. They ran with it the first two years. I was actively involved with all all the planning really. And this year i just got out of their way and I had the confidence that they could do it, which they could day one. It's just that you know i had to put my fingers on it here and there.
00:05:09
Speaker
And it still is. But my only contribution this year really was ah the speaker lineup. And that was not and that and I relied heavily on you and the advisory team for that. ah But that was that was the key. So for me.
00:05:25
Speaker
It was a combination of them just having the confidence to run an amazing event and the passion to do it. They are just through the roof with the passion for this.
00:05:37
Speaker
But as much as them, and I don't want to take anything away from them, but the people that come, the attendees, made a huge impact. And I got a feeling, know, the first two years, I hand delivered the attendees, I felt like. i Like I invited people, I got the certain people there. I you know was hand selling event to people.
00:05:59
Speaker
i did none of that this year. i i really did not. I mean, I talk about the event, but I didn't reach out to anybody say, you have to be there, I need you there. I didn't do any of that this year. But I think the two years of the attendees you know, raving about it, hey creating FOMO out there in the industry ah for for this event.
00:06:24
Speaker
People were prepared. People were like craving this. People couldn't wait to get there. And so a lot of it was obviously marketing, doing their amazing job, putting it together and coming up with the theme of the conference, which the that was amazing. But it was, and we can go into that theme because it was amazing.
00:06:43
Speaker
But it was the the people who already had an idea what this was, that they wanted to be part of it, and they immediately integrated into it, as I said before. And I think that was that was it, just allowing the attendees to you know spark the interest with everybody else.
00:07:02
Speaker
So good. So good. As we look and kind of look at the content and unpack it for a moment, Were there any sessions or speakers that really sparked conversations that you weren't expecting from this event?
00:07:15
Speaker
So for me, i heard great things from all every session. Honestly, the thing that the overriding theme of the conference will always be mental health, physical health. And those sessions are where I hear the most impact. You know, had people that talk about, you know, the things that they've gone through, the things they've overcome, the things they've now integrated into how they run their practice.
00:07:37
Speaker
um There was ah um just a name, uh, A few off top of my head, and I don't want to slight anybody because everything was great. But Elliot, I always say his name wrong, Bastion Marin.
00:07:52
Speaker
um Sorry, Elliot. um And in fact, he and I have a call, I think, this week. He did a ah ah session on basically storytelling and and how you storytelling in your business, dealing with your clients.
00:08:06
Speaker
And I walked into I can't sit in the sessions just because I'm on the go all the time, but I try to poke my head in for a few minutes into each session. And just the energy in that room was crazy. The people were working. They were you know ah participating.
00:08:22
Speaker
um Dave Lane had a session that I did get to participate in a little bit. And that was fun. He asked me some questions about you know the conference. And he was just showing basically coaching techniques and that. And I heard great things about that session.
00:08:39
Speaker
um i had, oh so who was it? It was ah Jackie Meyer. And was it? Sam, I'll say her name wrong. Hal Burton, I think. Hal? Yes. Sorry again. right, good. Look at me. All right.
00:08:51
Speaker
I heard great things about their session. ah And then just, in as I mentioned earlier, mental health, physical health, that's an overriding theme.
Wellness Activities and Community Interaction
00:09:00
Speaker
We have sub themes. The wellness room, I think, was even more attended this year than it ever has. And we run the wellness room, you know the entire ah conference schedule. The wellness room is open and that as well.
00:09:13
Speaker
I know I did ah yoga one morning and i mean, just what a best way to kick off your day with with yoga and just feeling amazing and just the having the wellness room there and being able to just go in there and decompress and then get back to it is just an amazing thing that You know, he we take for granted, but when you put yourself in there and immerse into it, it's it's so good.
00:09:36
Speaker
So good. you know In addition, sorry, Mark. In addition, we did, that this was something that Mark and they had added this year, which I liked a lot, was just a morning walk and talk. And so we had each morning we had the one of the speakers ah took a group out before everything started and walked and just talked about anything. You know, they could ask the speaker anything they wanted to, whether it was about their session. That's something I want to try to add. We talked about adding it this year and we didn't do it.
00:10:05
Speaker
But adding in the future where we could have a space, you know after somebody's session, you know, there's not a lot of the time for Q&A, have a room where that speaker goes to and, you know, allow 10 people in that room where they can have more one-on-one conversations with that speaker specifically about what they just talked about.
00:10:23
Speaker
That ends up happening in the halls. You know, that's one thing I hear about the ah conferences, the accessibility to, ah you know, the presenters and how they're always available around and you can talk to them.
00:10:35
Speaker
But I want to think if we see if we can do that more intentional of of giving them a space where they can actually talk about what they just heard. no I completely agree. And I think I think that's the great thing about the speakers is that they're just not coming to speak, but they're coming to um actually be part of the event and not only attend, you know, speak at their session, but attend other sessions and and engage with everybody. And I think that's.
00:11:00
Speaker
the The environment that this conference has created is that it does that. It just creates everyone to be involved with each other from the time they get there to the time they leave, which is bit fantastic. Well, and that's intentional too.
00:11:12
Speaker
yeah I've gone to lots of conferences over my time um and I love them all. um But some of the conferences... A lot of the associations that I go to keep peoplee to get keep people together the whole time, which I like that a lot. I know you're part of an association, um but then other conferences don't have scheduled events the entire time. So, you know, after the sessions end, maybe they have an hour happy hour and then everybody's off on their own. Or maybe they have, you know ah
00:11:43
Speaker
Not many of them have dinners and and many of them are a lot more attendees. i mean, we had 325 registrations this year, which is a good number. um But what happens when you get to a larger scale, and I want to see if there's a way to combat this, but when you get to a larger scale, there's two things that happen.
Maintaining Community in Large Conferences
00:12:01
Speaker
ah One, it's hard to keep every everybody together, um which I like because creating community is I think, so important, as we talked about earlier. um But the fact that they are larger and you can't keep everybody together, people end up going off on their own in the evenings.
00:12:16
Speaker
And that typically they do it with groups they already know. Hey, it's so easy just to hang with the people we already know. Nothing bad about that. That's a great group. But I think there's so many amazing people in this profession and I want to give everybody an opportunity to make new friends when they're at the conference.
00:12:32
Speaker
And so that's why i try to intentionally create events where we keep everybody together the whole time. Love it. Love it. One of the, talking to various attendees, one of the things that they were telling me was that this, bridging the gap is more community driven, less transactional than other conferences they may attend.
00:12:52
Speaker
and And so when you when you take a step back and go to that 50,000 foot level and go, why do you think they respond that way? Why are they saying this is more community, less transactional? What your thoughts? um Yeah, I think part of it is we intentionally aren't very technical. I mean, we are technical. I mean, we talk about tech stuff. We talk about you know technology involved. But it's more, I think, the when you're talking about things like, you know, I often share you know struggles I had mentally after after my stroke.
00:13:22
Speaker
um Things like that. When people are sharing very intimate things like that. when you're vault when you When you're vulnerable in front of somebody, i think it's easier to make connections with people. And it's easier for them to feel that they can come up and talk to you about something. Or you struck a chord in them that like, yes, I've dealt with that before. And and i I'm connecting with you.
00:13:43
Speaker
So I think it's that the topics are a big part of that. And people expect that. those types of topics and then then they learn from it and they come to you. I mean, every time i do a you know, I do, ah I love talking about things. I mean, I hate the fact that I have talk about mental health awareness, but I love the fact that and when I do that, people seem to get I mean, people come up to me after these and they'll say, hey, you know, I thought this is just the way I had to be. And and now I realize I can try to do something about it.
00:14:14
Speaker
That creates a connection. And that, I think, is how this is more community driven ah than if we're just sitting. And I have nothing against something that's just a tax conference because I'm a tax geek. I love taxes.
00:14:26
Speaker
um But it's harder to build, I think, relationships when the common commonality is just tax. Oh, so, so, so impactful. And I agree. I mean, i think there is a honesty, I mean, your keynote talk, and I know you don't want to beat your own horse, but I mean, like, it was so impactful, just the way your vulnerability of just sharing who you are, what you're doing.
00:14:52
Speaker
So if you're someone that's attending for the first time, and you're like, you know, typically, I go to technical conferences. Now I'm sitting there and Randy Crabtree gets up to kind of do his keynote intro to the conference and you just go and hit a home run.
00:15:05
Speaker
I mean, I think people just sit there and melt and go, wow, there is more to all of this. I could still be in this industry, but still have an emotional heart ah for what I'm doing and the people that I do it with.
00:15:16
Speaker
Yeah. So what Mark's saying is ah I cried a lot on stage, um ah but that does set the tone. And that yeah just as a side note, ah the the morning, the evening before the conference or the day before I was talking to our marketing team, I said, you know what? I honestly think we need to put boxes of Kleenex on every table.
00:15:36
Speaker
I have a feeling that's going to be a very emotional opening session ah tomorrow morning. And it was, but it was really, i and i had so much fun with that. But the more I think about it, it set the stage for for the conference.
00:15:51
Speaker
and And I wanted to do that. And just as a ah sneak peek, it was kind of a, a journey story of how we all ended up in Denver on July 22nd, 2025 in this Rocky mountain conference room together. Uh, and it was just a lot of, you know, uh, ebbs and flows and, and, uh, missteps and restarts and, uh,
00:16:17
Speaker
course corrections and mindset change and embracing and change and all this. And, and yeah, yeah it was, I appreciate the the kind words. And Elliot, who I mentioned earlier, helped me a lot on that presentation. And man, I just, it was my favorite ah talk ever. It was just so fun for me.
00:16:39
Speaker
So good. So
Future of Community Building at Conferences
00:16:40
Speaker
good. No, I think it's great. and so you is And personally, what do you think is the biggest takeaway from this year? is yeah i mean, obviously, you're still processing and this whole thing. but yep And something that you say, hey, as you walk away thinking,
00:16:56
Speaker
this is why we do this you know conference. you know As much as there's a lot of work and there's a lot of organization, like you said this year, you just try to stay out of the way. But when you get done with it you say, why do we do this? This is why.
00:17:08
Speaker
What are those things that come to your mind? Well, it it goes back to the community aspect of things. So when when I was at the conference, the final day which was a half day.
00:17:23
Speaker
um I woke up that morning and I was already thinking about next year. What are we going to do? how we going to keep this going? How not even next year? i was thinking about the day after everybody leaves this conference. How is this conference going to continue to have an impact on people?
00:17:41
Speaker
And, uh, And so the takeaway for me was, well, you probably remember this. We were sitting in the ah final, you know, closing, you know, a few minutes and I'm up on stage and i'm talking and I, this is kind of just came to me in the moment.
00:17:58
Speaker
I'm like, okay, we cannot, this vibe, this energy, this community that has, that we've all been part of and we all have created over the last two and a half days, cannot,
00:18:10
Speaker
die in this room that we're sitting in right now. We have to take it with us. We have to cultivate it. we have to We have to share then what happens. And so I asked people, I said, don't don't let this die. I want you to leave. I want you to reach out to these people you met. I want you to build relationships that are strengthened the relationships that you built on,
00:18:30
Speaker
ah in this last two and a half days, because if it just stays here, yes, it's a fun two and half days, but what impact does it have? I want to have, i want this conference to have more impact than just that two and a half days.
00:18:44
Speaker
I think it does, but I want it to be intentional about it. And so if you don't mind, I'm going to kind of go into those, what I was thinking about. Yeah, let's do that. so So this has really been consuming my mind ah for the, wow, we're a month after the conference right now.
00:19:03
Speaker
And so I'm like, OK, I just challenged everybody to keep this community going. What am I going to do about that? How am I going to how am I going to have an impact on this? Because, you know, it is something that I can have an impact on.
00:19:18
Speaker
And so this is not official. But what I've been thinking is I want to take BTG on the road. and I want to. Not only, you know, i want to live what I just told everybody. I want you to continue to have an impact during the year and I want you to build these relationships.
00:19:36
Speaker
um But I think I want to also extend this community to others. I don't think I know I want to. And so. It's in the works right now. Nothing's official.
00:19:47
Speaker
I have some state CPA societies that want to get involved. They've reached out to me. I've had some you know ah sponsors, vendors that want to get involved. I've had some larger CPA firms that want to maybe even host events.
00:20:00
Speaker
And so this is all being worked on, but I want to take this and we'll do a half day event where we go in and maybe we talk about a few subjects that that are pertinent to the conference, you know, and and tax being one of them, because this is a very significant tax year.
00:20:15
Speaker
um so So talk about that. But then... allowing others that weren't part of BTG this year to see what it's about and hopefully attracting additional people to the conference in the future.
00:20:30
Speaker
And so that's that's that's where I'm at. And and in my mind... I've already started naming the sub theme of next year's conference. Man, I'm just going to throw everything out here and this will all change.
00:20:43
Speaker
course. But I'm thinking ah community collaboration and culture ah being a sub theme, because I think that's a lot of what is important in this conference.
00:20:55
Speaker
so So taking this on the road, seeing what it becomes, and then just if you don't mind me rambling for a little bit longer. um Part of Bridging the Gap, the name of Bridging the Gap is, you know, Bridging the Gap between a lot of things, between like obviously ah between ah burnout and a great work-life balance, between, um you know,
00:21:17
Speaker
a 80 hour work week and building efficiencies in and breaking that down to 40 hour work week. Still, you know, bridging the gap between, you know, making working less, making more, having a better work life balance.
00:21:29
Speaker
But one of the original ideas of bridging the gap or sub themes that I wanted because I wanted to bridge the gap between what I see is two distinct communities in the profession.
00:21:40
Speaker
There's the large firm community and that's top 500 firms, let's say, which is what, like 6 million and above? yeah Or is that 400, whatever. The top 500 firms. And then these ah smaller, probably startup firms, most of them,
00:21:55
Speaker
and And they both do such amazing things, but and they can both learn so much. And I've been very fortunate to to be part of both of these communities, which feel very distinct to me.
00:22:09
Speaker
ah They feel like there is, there is they they don't, this is I don't mean this as negative, but they don't, I think they can integrate well. I just don't think they end up hanging out in the same spot as often as I hope they would.
00:22:24
Speaker
And so the integration part of bringing those two groups together, I think is important because the This is my opinion. the the The smaller startup firms just seem more nimble. They're more apt to try different billing methods. They're more apt to integrate different technologies because you know it's it's it's something that helps them from compete with a larger firm.
00:22:50
Speaker
where larger firms have the process of procedures and all these you know KPIs they've tracked and everything, and and also integration of technology from probably a more revenue standpoint that they could do this.
00:23:00
Speaker
So all those things are so important that I think each group can learn from each other. And so that's one of the ideals the ideas I have with this roadshow is I want to build and test my thesis that that these two groups can coexist in the same room together and learn from each other and have as much fun together ah as possibly can. and they And it has happened at Bridging the Gap. Man, you get me excited now.
00:23:28
Speaker
It has happened at Bridging the Gap already, but not to the level I want. So I want to just see how that works. And I think this is a really good testing ground to see ah the impact that that will have.
00:23:41
Speaker
I love the idea. i think I think, you know, taking meeting once a year for bridging the gap and then, you know, have your conference, but also go out to the different communities and really um start to build, you know, the collaboration like you're talking about, talking about ways that you can bring together the technical content with practice management, with leadership, wellness, all of it together. and and meet the people where they're at versus just saying, hey, I'll come here once a year. And then, like you said, we got to keep the vibe going. We got to keep this momentum throughout the year. And that's hard for most people, right?
00:24:17
Speaker
Oh, yeah, for sure. So dream big for me with one second here. So if we have time and budget and logistics aren't an issue, you know, we don't care about any of that, right?
00:24:28
Speaker
um If there's one topic or experience you love to bring to Bridging the Gap, that would blow people away and really kind of start to, you know, even even expand the net of people coming to this conference.
00:24:42
Speaker
What do you think that would be? Oh, man, I have so many things that the one that I'm so right. So ah let me give you two things. First, I'm probably going to ramble here again, but we're going to go with it and then we'll go with the second. So the first one is I kind of feel like this idea of the roadshow is a ah almost like a social experiment.
00:25:04
Speaker
um And I'm kind of treating it that way. ah But I want to ah absorb everything I can from this. And i with the way I'm envisioning this right now is that closing...
00:25:16
Speaker
ah you know, whatever, five minutes, 10 minutes that did at the conference is the beginning of my keynote for next year. I mean, I started my keynote when we left when we were leaving that conference.
00:25:28
Speaker
And so now what I'm going to do is I'm going to build on all the experiences I have over this next year, meeting with people, hearing their stories of what happened to them from this experience, how they cultivated and um i am I'm going to absorb everything that I learned during the year, and I'm going to build that into next year's opening. So so that's going to be fun for me.
00:25:49
Speaker
But the other the other topic, and I think it's good this is the idea. We'll see if it happens. But I'm already like making notes of everything that's going on. i I'm actually going to start...
00:26:02
Speaker
um this will sound a little weird, but there's some AI tool where I can kind of um track everything I do on a daily basis about with, you know, talking about the conference and and community and all that.
00:26:17
Speaker
And I can actually ask AI, hey what ah over the last month, what has been the impact to me on these events and things like that or the community? um And so that's that's going to be interesting to see how that evolves.
00:26:32
Speaker
But number two, I've got this new, really, I'm building this passion right now on um people in general, but people in this in the in and accounting is where my passion is most.
Career Development and Future Speakers
00:26:50
Speaker
and And seeing, I'm reading some things where there is, there's data out there that shows that people have, really should have like two arcs to their career.
00:27:03
Speaker
you know There's this first arc where you're very you know technical and and you know working hard and learning all this stuff. um and But there's a there's statistics out there that show that you lose those skills fairly early on in your career. Anywhere depends on what you're doing from your late to mid to late 30s to early 50s. And you just start stoping you start losing those technical skills.
00:27:29
Speaker
But that doesn't mean that that's, I think too many people are fighting this is what I'm seeing. And then they they just try to keep, you know, getting to that point where they were at the top of their game.
00:27:41
Speaker
When in reality, there's the second arc to your career, which what I feel I'm in now, where I, you know, I go out and I talk about all these other things. And I think this is something people don't see and they don't realize.
00:27:54
Speaker
And so if there's a way that I can, know, Have a session or a theme in here for somebody that's in their mid-40s, mid-50s, where we could talk about maybe you are struggling with you know your career. yourre yourre youre You're just fighting to keep the spot you're at. the you know Maybe you get you know elk accolades because you're such a great technician, but you feel that those are waning.
00:28:22
Speaker
Talking about how you can you'll change that. You've gained so much knowledge and that knowledge that you've gained over the years is so important in starting to use that knowledge in a different way in your firm, from a teaching, from a mentoring, from a whatever standpoint, the impact that that can have on others You know, and and that is something that I really am starting to think I've already started research and I've already started put together and see if there's a way that I can turn this into a presentation.
00:28:52
Speaker
So that that would be one. And that's not even a money thing, but because that one I could do. that. But there's people out there that talk about this stuff, that yeah that's where the money would be coming. They'd be better at this than me. And so ah bringing somebody like that in to talk, if if it was like who would be my you know a number one speaker to come to the conference and if money wasn't and an object, I think Simon Sinek would come ah top of mind for me. That's somebody that I would love to have in there.
00:29:28
Speaker
um there's I'm trying to think of names. There's a guy out there who wrote a book. I think it's actually The Power of Vulnerable Leadership, or it's a very similar title, ah Jacob Morgan.
00:29:41
Speaker
yeah um He would be somebody that I would love to have at the conference today. this This topic I was just mentioning, I'm trying to remember names.
00:29:51
Speaker
The guy's name last name is Brooks. ah He wrote book. well Oh, it's From Strength to Strength. And one of our attendees at the conference this year told me about this book. And man, I've been listening to on tape and it's got me going.
00:30:06
Speaker
So those three people, um if it was like, hey, could I have anybody at this conference to speak? Right now, those three are top of mind. So good. So good. And one thing I so admire about you, Randy, is your emphasis on community. And you know I think accountants in general, whether they're in a big firm or a small firm, or maybe they're just a sole practitioner, they can feel solitary, like they're in a jail cell sometimes in the profession with the busy hour season, long hours, client demands, all the stuff that goes along with all that can kind of feel like you're kind of constricted. And the one thing that
00:30:45
Speaker
um And maybe ask you, is do you see bridging the gap as part of a solution to help accountants out there not just survive that, but find ways to have community and thrive in it instead?
00:30:58
Speaker
i do. so this is ah another area that I've been very passionate about finding, you know, don't know if it's a solution, but finding information about, and that is that isolation, especially, um you know,
00:31:13
Speaker
pandemic and post-pandemic where remote work is a lot more common. And I love remote work and I'm a big proponent of remote work. I think it's, I think, ah well, as you heard, we do a survey in the profession and one of the greatest satisfaction creators for people in the profession is having the freedom to work ah you know there their own schedule, yeah and more so where they want.
00:31:35
Speaker
But if you talk to Jennifer Wilson, she has your her Anytime, Anywhere work survey, and it's also when you work. And I think that's important because the bottom line is the work is needs to get done.
00:31:47
Speaker
Where it's done, when it's done isn't important. But to go to what you're saying, there can't you can feel isolated when you're in your, you know, I'm in this you know bedroom in my house working right now. um I get to talk to people all the time online, which is great.
00:32:02
Speaker
But for me, the greatest thing we do as a company at Trimerit is an in-person event twice a year where people in our company get together in a remote location.
00:32:16
Speaker
and build relationships. Relationships are huge. And so yes, Bridging the Gap does that for people. It helps build those relationships, but that two and a half days, as we talked to right already, I don't think is enough. And so we have to promote continuing that in some way.
00:32:33
Speaker
And so yes, we can Bridging the Gap can be a catalyst for that, but ah yo me, you, the advisory team, the marketing team can't do that all for everybody. And we at least have to give them the tools to continue that on their own as well.
00:32:50
Speaker
So Randy, as we wrap up the Bridge in the Gap conference conversation, you had to define the BTG conference in one word, the culture, and just one word, what would it be and why?
00:33:05
Speaker
Openness, that's the first thing that came to my mind. you know The culture is open. People are open to to meeting new people. They're open to share. They're open to to experience something new. And so if I had the to define the first thing off the top my head, culture, it's the openness factor of our culture.
00:33:26
Speaker
I love it. And then I would agree with you 100%. mean, having that openness for people to come from all over um the country with different backgrounds, different experiences and come together and share, have the platform to share what they're doing, how they're doing it.
00:33:43
Speaker
and And sometimes, like I always say i attend all these events constantly. And the best thing to do is just have ears to listen and and take it all in and do something with it. So I love it.
00:33:55
Speaker
Thank you for sharing all that. That means a lot. I don't know if it comes through, but I'm a little passionate about this. so Thank you for allowing me to ah talk about it, because believe me, this is such a its such a fun event for me. And this sounds maybe egotistical. I don't know. But it's, I think, a very important event.
00:34:14
Speaker
No, thank you. Now, as we shift gears to more of a technical side, we know that, um you know, you mentioned it during, you there's a lot of new tax ah legislation that
Tax Law Changes and Implications
00:34:26
Speaker
has been passed. There is the the president on July 4th signed the H.R.1, also known as the One Big Beautiful Bill Act.
00:34:33
Speaker
um And one of the things that, you know, there's a lot of provisions in there, a lot of it extension of TCGA, a lot of new things. But with all that being said, as we wait on guidance, one the big wins was that section 174 is back for immediate expensing starting in 2025 with a number of things, caveats that go along with that.
00:34:54
Speaker
And that's a huge change. Am I right? Oh, yeah. So, you know, 174 defines R&D expenses. um That was a ah ah fairly negative impact to taxpayers starting in the what was it? 22 was the first year. Yeah.
00:35:09
Speaker
Of capitalization. um And so, yes, now we have the ability and we're waiting for guidance still. But as you just said, to start expensing that in 25, there's some specific rules for capitalization.
00:35:22
Speaker
you know smaller companies and larger companies on how that works. And again, that still needs some guidance as well. ah But that is just, it had a very negative impact on people claiming the R&D tax credit.
00:35:35
Speaker
And the R&D tax credit, I think this is, you know personally, I think is a ah huge incentive for our country I think manufacturing in general is, a I believe, the lifeblood of our country. And when this happened, the capitalization of 174, people really pulled back on R&D expenses and were not claiming the R&D credit, probably because they weren't expending as much in R&D as they were in the past. And so this will be positive from...
00:36:09
Speaker
ah many standpoints, and you know, bringing jobs into the US, allowing companies to be innovative and creative. Without innovation, you know, we become stagnant companies. And how are we going to innovate if we don't have an incentive for it? Because that financial ah expenditure in R&D is by definition a risk. We don't know if it's going to work or not.
00:36:30
Speaker
And so from that standpoint, it's it's super important for taxpayers. I think it's super important for the country and It is, we are already seeing a huge influx in R&D expenditures ramping up because, I mean, we have hundreds of, ah I think it was right off the bat, I think the number was 438 clients who we were either reaching out to or were reaching out to us that were, hey, they're ready to start investing in R&D again. And so want to talk about the R&D tax credit.
00:37:03
Speaker
So good. So good. Yeah. I mean, and we need guidance from this, obviously. And so to kind of give everyone a little bit of background from the technical side, um the tax law, um Tax Cuts and Jobs Act back in 2017 was passed, had a provision in there that said starting January 1st of 2022, you had to start capitalizing your 174 research and experimentation um expenditures.
00:37:28
Speaker
And then if it was domestic, you had to amortize over five years. If it was foreign, you had to amortize over 15 years. And so that kind of threw a bad taste in a lot of taxpayers' mouth. But one of the things that came from this new HR1 bill was that starting January 1st of 25, on a new code section, 174 cap A will be in place that will allow immediate expensing of the 2025 domestic research and experimentation expenses. So for 25, if all your experimentation expenses are domestic, you can expense them. You no longer have to capitalize.
00:38:04
Speaker
Foreign, and right, Randy? You still got to capitalize and amortize over 15 years. Yep. yeah that And then, yeah, go ahead, Mark. and then And then the thing that I think, you know the clients that I'm sure they're calling you and and I know they're calling me, they're like, well, what about the stuff that I had to capitalize? Do we get any reprieve from that? Meaning the stuff that is unamortized, intangible asset that we've created, right?
00:38:27
Speaker
And the answer is yes. And this is the home run. So if you're considered, you have to look at one of two things. One, are you a small business? And so They define that under Code Section 448 is that a small business is average gross receipts of the previous three years of $31 million or less. So if you're a small business and you fall in that range, then you have the ability, the option to go back to 2022, 23, or 24 and amend those years and write off the unamortized costs that's still available.
00:38:59
Speaker
which will obviously create you know refundable situations for clients. um Or they can not go back and amend and they can just go and write it all off in 25 or write it off in 25 and 26. If you're a large business, and I believe this is right, Randy, then you can't go back and amend. So you're over that 31 million, but you can go forward um to write off that amortized cost 25 25, 26. that how you're hearing it?
00:39:22
Speaker
that how you're hearing it That's how I'm hearing it spreading out over those two years. If you're the large or if you if you're the small and decide not to go back, you have that same option. ah The thing that we're waiting on, and I assume i don't know if you have any update is the mechanics of that. Do we have to do a 3115 if we're going back to amend? Have have you heard any updates on that?
00:39:42
Speaker
So this is probably the one thing that I spend long hours um at night waiting, talking to people and hearing. But, um you know, with the stuff I do with the ICPA and other um committees, um we're still waiting on that guidance from Treasury. what What the important thing here is that if you remember back to 2022, we didn't have to file a 3115 for a change in accounting method because that's what it was.
00:40:04
Speaker
We had to put a statement in the return that said, hey, we're basically changing the accounting method. And that's what the IRS wanted us to do. So when we flip now back to immediate expensing and being able to make some sort of election to either go back and amend the previous three years or go forward, it's again, we're going to have to change the method.
00:40:22
Speaker
And so like you said, Randy, Are we going to have to file 3115? I suspect the answer is no, because that's just more paperwork that the IRS probably doesn't want, nor that they want to process.
00:40:32
Speaker
So we'll probably have a statement, but what does that look like? And so some of the questions that I'm getting is probably the biggest one is, hey, Mark, my client's tax return is on extension due September 15th. It's an S Corp.
00:40:44
Speaker
um And we've been sitting on it now. Do we capitalize the 24 expenses? Because guess what? The bill under HR1 says immediate expensing under 174 cap A starting in 25.
00:40:58
Speaker
So what do I do to 24? Because it would be easier to just expense it versus capitalize and then have to go back and amend. So we're waiting on if Treasury will give us some guidance. And I, every day, I'm waiting to see what's going to happen there.
00:41:10
Speaker
So- Yeah, well, we have about 35 days or so before. running out of time. No, 25, think even. Yeah, it's we're definitely running out of time. and And that's one that we get that question nonstop to. And the answer we have is we don't know.
00:41:25
Speaker
And that's where it is, unfortunately, at this point. Now, over the last couple of years, we saw many companies back off from claiming R&D tax credits, even slowing down investments because of these capitalization rules.
Encouraging R&D and Collaboration
00:41:38
Speaker
Do you think this change in the the law will actually bring them back to the table? Oh, yeah, I do. I mean, just what we're seeing already, it definitely is going to. ah The interesting thing would be, yeah,
00:41:54
Speaker
Would people go back and amend 22, 23, 24 and claim R&D tax credits? That's a little odd ah because if they did capitalize, yes, that's fine. But if they did capitalize, they probably would have claimed credit.
00:42:10
Speaker
If they didn't capitalize, well, were we saying we made a mistake and we should have ah capitalized, but we're going to now because we don't have to capitalize and we're going to claim an R&D? There's a little bit of...
00:42:23
Speaker
yeah of things that have to be looked at there. ah But it'll be interesting to see. There could be some of that, especially for companies that capitalized in the past, which they obviously were required to under the under the rules under 174. But it'll be interesting to see what happens there. But yes, going forward for sure, even in 24, we're seeing, as we just said, there we're not at September 15th as we record yet. So we're seeing companies that are...
00:42:51
Speaker
looking to claim R&D tax credits in 24 that haven't in the last handful of years. So that's been significant change for us. In fact, we're we're going to make the deadline for all the clients that looking to, but it is ah it is busy time for us right now, for sure.
00:43:06
Speaker
More importantly, starting at 25, that'll be a much easier process because we'll a lot more time to plan for it. But yes, R&D tax credit, R&D investment ah is definitely heading in the positive direction.
00:43:19
Speaker
and And Randy, from an accountant's or CPA's perspective, what's the best way to bring this conversation to clients right now? And how do people position themselves as the, you know, the advisor to who spots these opportunities? What should they be doing? They might be listening to this going, yeah I don't know how to bring this up. You know, what's some things they can do?
00:43:39
Speaker
Well, I think the one thing is, as we talked about, as we were talking about bridging the gap, collaboration is an important thing. you know As a tax advisor, you cannot be an expert in everything. And i've you know I was a generalist for many years. I had ah my own accounting firm before I started Trimerit, which is now a specialty firm. but But I realized there's things I just don't handle.
00:44:00
Speaker
have the ability to absorb all the knowledge. The tax code is big. ah hu and so And getting bigger, it appears. yeah and so So I think one of the things is you just need to know who could potentially benefit. And once you do that, you just educate on the fact that, hey, yeah if you're a manufacturer, a software developer, one of those two, you probably have an opportunity to claim an R&D tax credit. You at least have the expenditures that need to be analyzed to see if it gets to the level of a credit or not.
00:44:30
Speaker
And so you start with there. You can start. and i And I think it's I think collaboration on this and I'm not trying to sell our service or anything. I'm just saying anybody out there that has an expertise in any area, whether it's a COSEG or SALT or anything, it's important for you to build relationships with those types of individuals.
00:44:49
Speaker
or those types of organizations. And so ah for me, when I'm out educated on R&D tax credits or any type of incentive, I have a goal of I want to identify, i want to help you identify who the clients are.
00:45:03
Speaker
I want to give you an idea of what the potential opportunity is for them. and equip you with enough knowledge that you can educate them on the, hey, yes, this is worth a discussion. Never promising there's a, hey, you're going to save a hundred grand in taxes because you never know until you dig into it.
00:45:20
Speaker
But just, I want to educate people on the the the ability to identify somebody that could potentially benefit from an incentive. no Great tips there. And I'd agree. i mean, just and And I could say started off as a generalist and, you know, I specialize in certain areas, but you can't know everything about everything. And if you are someone who doesn't have a firm of people that are experts in all these other areas, collaboration, like Randy said, is the key. Rather, it's reaching out to Randy and TriMerit or whoever it may be, bring them in.
00:45:55
Speaker
Because guess what? I talk to other CPAs sometimes and say, yeah, my clients probably should be taking the R&D tax credit, and but I don't really feel comfortable doing it and I don't you know I just think I'll just ignore it basically instead of bringing someone in that can get it.
00:46:08
Speaker
And I would say this, and I and i know, Randy, we've collaborated quite a bit on different things, but when you bring in another specialty place or whoever that is, no matter what the topic is to help your client, you're only going to look like a hero because you're bringing value to the table. You're not going to look like, well, maybe i'm going to lose this client.
00:46:27
Speaker
And I just have to always reemphasize that with other accountants. I've seen the same thing. and And when we started Trimerit 18 years ago, that was a yeah that was even more so the case. Oh, well, you know, I've never brought this to my client before. How do I do it now? Well, you do it now because you're bringing value to them now.
00:46:45
Speaker
and And, you know, especially now, especially this moment in time is the great opportunity to do it because, you know, we've now got these new rules and you can go to them and say, hey, you know, capitalization of these expenditures has gone away. it's time for us to look in an R&D tax credit to see if there's a benefit for you there.
00:47:02
Speaker
So good. Absolutely. ah Randy, this has been another fantastic conversation. You've given us a lot to think about today, both from the perspective of how we connect as a profession through conferences like Bridging the Gap, but how we seize opportunities for clients post HR1 with 174 and R&D. So if you had to leave our audience with one key takeaway from today, what would it be?
00:47:27
Speaker
Well, you know what? I think weaving those two discussions together, it's collaboration, ah how important collaboration is, because one, it's just so important to us from a ah mental standpoint to be able to have others that we can rely on.
00:47:42
Speaker
And then two, we see how important collaboration is in just our practice because we cannot know everything. So weaving those two subjects together, I'm going with collaborations. And that's one of the reasons I think that's going to be part of our theme next year.
00:47:56
Speaker
Love it. I think it's absolutely agree with that. And where can, you know, people listening to this and maybe they don't, they're like, this is the first time they're hearing you. Where can listeners go to learn more about you, TriMerit, Unique CPA Podcast, and of course, Bridging the Gap Conference? What's the best way for them to Well, yes. Everything you just mentioned can be linked to from the ah Tri-Merit website. tri-merit.com. I'm sure there'll be something in the show notes on that.
00:48:24
Speaker
um And yeah, there's links there to the the conference. I do webinars all the time. I got a really fun webinar coming up next week, and which will be on YouTube afterwards, on basically just all the benefits from credit cards and how to how to identify those. And I think it's important for business owners and accountants to look at that because, man, there is so much there.
00:48:48
Speaker
And so I try to do things like that, but then tax incentives too. so So at our website, you can get the webinars, you can get the podcast, you can get Bridging the Gap, you can get the many other things. And and links to ah ah to where to find me, which LinkedIn is obviously a good place to do that as well.
00:49:05
Speaker
Well, that's fantastic. Randy, thank you for joining me. It's always ah highlight having you on. Your reflections on Bridging the Gap and the opportunities we have to better serve our clients and support each other as a profession are exactly the kind of insights we need for this profession moving forward. So thank you very much.
00:49:23
Speaker
And to our listeners you to our listeners, don't forget, you can earn CPE credit for this episode. Check out the show notes for details. And if you're enjoying tax news now, please subscribe, leave a review and share the episode with other colleagues.
00:49:36
Speaker
We'll be back next month with another timely discussion to keep you ahead of the curve. And until then, stay sharp, stay proactive and keep bridging the gap.