Is Tax-Planning Evil? - Thoughts From a Tax Coach
Updated: Oct 9, 2020
Written by: Ceinwyn Rudnick, Executive Contributor
Executive Contributors at Brainz Magazine are handpicked and invited to contribute because of their knowledge and valuable insight within their area of expertise.
I thought through my first article for Brainz many, many times. I started and stopped articles on the effects of COVID-19 related work-from-home conundrums, the CARES Act, and the myriad complexities of PPP Loans. But then, the universe gifted me with a grander, more dramatic topic in the form of the Trump tax returns. $750 in taxes, for a millionaire? $70,000 in hairstyling expenses as a business expense? The outcry and debate have been heated, and I have stood on the sidelines and watched.
As an Enrolled Agent, my perspective, but more importantly, a Certified Tax Coach, is much different from a layperson’s point of view. Besides, I have no desire to get into politics on social media. But when we take the President himself out of the equation, we are left with a question that deeply impacts me and the work I do to help business owners legitimately save money on taxes.
Is tax planning immoral? Or worse - is it evil?
Obviously, as a professional tax planner, I am going to say no. However, I think there is a fine line sometimes between tax planning and flat out shenanigans. Certainly, it is going to make the average person angry when they think a millionaire is paying less than $1,000 a year in taxes when many people pay an effective rate of anywhere from 10% to 20% in taxes on a salary of $50,000 to $100,000. Contributing the limit of your SIMPLE IRA every year for retirement planning? Super! Buying a motorcycle as a work vehicle for your construction company? Shenanigans.
And sadly, it is mostly the latter that people think of when they hear the words tax planning or tax strategy.
The accounting industry is one of immense pressure. The jobs are highly technical but generally clear cut- until you factor in people's expectations. Obviously, most people want the shiniest financial statements while simultaneously paying the least amount of taxes possible. Some people are just willing to push the envelope further or demand more extreme results, no matter the destination's path.
"a small handful of people's bad actions will tarnish the type of work I do and diminish the true value of a good"
We will always come across clients who want to deduct that business suit or use their PPP funds to buy a sportscar. They want you to "be cool", not "be so square" or stiff. I like a good time as much as anyone-however orange is not my new black. I have built up a tolerance to these kinds of requests, though to be honest, I get them much less frequently now that I have an established business and a reputation. But if I feel the pressure from these small business clients, I cannot imagine how a tax accountant signing off on the tax returns of the person holding the highest office in our country must feel. Maybe terrified? Maybe complicit? I really don't know to be frank.
I do know how I feel, though. Worried that yet again, a small handful of people's bad actions will tarnish the type of work I do and diminish the true value of a good, honest tax plan. Despite scandals, which will probably add another 12 hours a year of ethics trainings to my CE load there are still great, dedicated and honest tax professionals that deeply love helping small to large businesses legally save on taxes so they can reinvest in their companies, their employees and the world at large.
I may not let you deduct your toupee or pay your kid $50,000 a year to be your Facebook model, but I promise we will come up with way better strategies to build your wealth in the long run through proactive planning and analysis.
Ceinwyn Rudnick, Executive Contributor Brainz Magazine
Ceinwyn Rudnick is an Enrolled Agent and Certified Tax Coach based in the Pacific Northwest. She opened her boutique accounting firm, Veritas Accounting Solutions PLLC, to help business owners realize the benefits of transitioning their accounting services to the cloud. Recently she has completed advanced training through the AICTP to become a Certified Tax Coach-making tax planning a leading service offered by Veritas Accounting Solutions PLLC. Ceinwyn has two degrees, a B.A. in English Education as well as a B.S. in Accounting. She loves helping her clients achieve a better understanding of the role accounting, money and taxes play in their business. Her goal is to guide business owners to a place of peace and confidence regarding their taxes and finances through education and customized tax planning.
