If It’s 4th and 1 Against the IRS, Make Sure You Have Your CPA and Payroll Team Onboard! | Charles Read

Charles J Read is a Certified Public Accountant (CPA), U.S Tax Court Practitioner ( USTCP), a former member of the Internal Revenue Service Advisory Council (IRSAC), a Vietnam Veteran, and the Founder of GetPayroll. Mr. Read’s companies have provided full-service payroll, HR, and timekeeping services since 1991. Charles is an accomplished senior executive and entrepreneur with over fifty years of financial leadership experience in various industries and the author of four books. His latest book The Payroll Book: A Guide For Small Businesses and Startups is currently #25 in the Small Business Books section on Amazon. Did you know our amazing voices can go beyond just the microphone? Yes, we have video! Subscribe to our YouTube channel here!

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Charles’s Links:

•  LinkedIn | @Charles Read

•  Website | thepayrollbook.com 

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GOLD NUGGETS:

(06:23) - Entrepreneurship Journey and Small Business Success

(17:06) - Navigating Tax Issues With the IRS

(22:37) - Payroll Services

(33:14) - Navigating IRS Mistakes and Bookkeeping Challenges

(39:15) - Book Success and Business Growth

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Special OFFER – GOTO thepayrollbook.com use the code PODCAST and Get your FREE VERSION of Charles’ book The Payroll Book: A Guide For Small Businesses and Startups

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Previous guests on The Small Business Safari include Amy Lyle, Ben Alexander, Joseph Sission, Jonathan Ellis, Brad Dell, Chris Hanks, C.T. Emerson, Chad Brown, Tracy Moore, Wayne Sherger, David Raymond, Paul Redman, Gabby Meteor, Ryan Dement, Barbara Heil Sonneck, Bryan John, Tom Defore, Rusty Clifton, Duane Johns, Beth Miller, Jason Sleeman, Andy Suggs, Chris Michel, Jon Ostenson, Tommy Breedlove, Rocky Lalvani, Amanda Griffey, Spencer Powell, Joe Perrone, David Lupberger, Duane C. Barney, Dave Moerman, Jim Ryerson, Al Mishkoff, Scott Specker, Mike Claudio and more!

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If You Loved This Episode Try These!

• Inventing Uber for Landscape Services | Bryan Clayton

• Maximizing Business Valuation and Exploring Growth Strategies with Rob Macklin

• You Should be in the PeopleWare Business Not Just the Software Business | Mark Herschberg

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Have any questions or comments? Connect with me here!

Transcript

Charles Read: 0:00

within a year, the franchise or went belly up. The president was sleeping with one of the national sales girls and the vice president wanted to be president and was going around his back to the board and it all blew up in collapse. That was rather dysfunctional.

Chris Lalomia: 0:18

I would say that puts the D in dysfunctional. And that brings me back to one of my best gold nuggets I learned right away Never get your honey where you make your money. I got that figured out. Welcome to the small business safari, where I help guide you to avoid those traps, pitfalls and dangers that lurk when navigating the wild world of small business ownership. I'll share those gold nuggets of information and invite guests to help accelerate your ascent to that mountaintop of success. It's a jungle out there and I want to help you traverse through the levels of owning your own business that can get you bogged down and distract you from any of your own personal and professional goals. So strap in adventure team and let's take a ride through the safari and get you to the mountaintop. Here we go with another small business safari episode.

Chris Lalomia: 1:07

Alan, I'm looking forward to this one. I am pumped up. It's about numbers, which I think I'm pretty good at, because I like to ask them my final four questions. And you still have all 10 fingers Right. I do One A, b, seven, seven, six, four. Oh no, thank God we got somebody on who can help us. But before we get to them, alan, somebody had a big daddy weekend and it wasn't Chris. And here's how I found out that Alan is. Of course, we all know he's an accomplished chef. He's a good cook. No cook, he's a cook. I'm not a chef?

Chris Lalomia: 1:35

I'm not trained, all right. So we were laying down some trailers for some of the podcast stuff that we're doing and we send Alan a note saying Alan, check this video and he goes. Hey, I just placed seventh in a professional chili cookoff. I'm like you didn't even tell me he goes. Well, because the episodes are always all about you. I'm like well, as they should be, I said, but you can still tell me. I think you're embellishing a little bit, but you kicked it, man. Yeah, it was awesome, yeah, and so why I tie in the chili cookoff that you came in here in Atlanta, went out to Madison, georgia, went out there and did a non-traditional chili, and I think that's the coolest part of everything there is that you went, not the traditional chili wrote.

Alan Wyatt: 2:16

And I would argue that I had the most traditional chili, because everybody in the national circuit they use ground chuck, they use a bunch of store bought spices and we seated, toasted, steeped, pureed, strained and smoked over 500 chilies. It was 16 man hours just to prepare the chilies and then it was. I mean, there was nothing out of a jar.

Chris Lalomia: 2:40

So I love that because this is the golden nugget before we get to our guests and I'm gonna tie this all back in and he's been patiently waiting. We appreciate that. But here's why you prepared, you planned, you executed, you sweat your butt off. You say you're traditional, but you, as you know, you were unique when you went there. So, to be a unique person in your marketplace, to do what you gotta do, you've gotta plan, prepare and go out there and do it. But you went against the grain and didn't even know you were being in, being entered into the professional category. You thought you were going out there just for a buddy and helping them out and doing your thing. Next thing, you know seventh out of 12.

Alan Wyatt: 3:16

So there were 28 teams. Yeah, so I thought we were just gonna do a small town chili cookoff, and it's been going on 17 years. It's actually part of the chili appreciation society international national circuit and so you're awarded points, the top 10 teams are awarded points, kind of like Formula One Nice. And then we found out and we'd practiced three times, because the kind of chili we make takes a long time to make, so how do you make it in a shorter amount of time? Well then we found out we had to turn into the professional judges after three hours, not four.

Alan Wyatt: 3:48

But the fact was is I mean, we planned it out so well, it was just flawless. And they had live music going and we're swapping drinks with the tent next to us. And it wasn't until and my friend who got us involved in it, he was our barker and serving the chili. We served over 500 servings of chili. But when he started getting feedback like you guys do this all the time, where can we find you? How can we follow you on social media? How can I buy this? Hey, I own a restaurant. Can you give me the recipe? That kind of thing. And all of a sudden he just started going to town and it was a blast.

Chris Lalomia: 4:18

All right. Now, that was awesome, and that here's my tie-in Cause. What state in our, in our 50 states here in the United States, says I am the king of chili, texas. And who do we have on the phone with us? And in the podcast room today we have Charles Reed from Texas. Welcome, charles. Thank you for having me. It's a pleasure to be here. Chris Allen, thank you. I don't know if Charles is a chili aficionado, but what I will tell you is that we were adding this up, getting this bio together. He's been in business for for himself for over 30 plus years. Been in business for 50 plus years. Has a wealth of knowledge and experience helping people with financials. He's a CPA. He can help people with payroll HR. Has written four books. Yeah, but what we really want to know before we get into all that stuff is what's your favorite chili?

Charles Read: 5:09

My favorite chili I ever made. My daughter was working at Benigans and they made prime rib and she would take all the leftover prime rib bones and we cook those down for a pot of chili and I season it with real chili, because I'm like you, I'm a cook, not a chef. I'm a cook. So we roast our own chilies and grind them and so on, but it was basically prime rib chili.

Alan Wyatt: 5:39

Oh wow, wow, I'm looking, if you can see Charles. I have Charles just rolled back.

Chris Lalomia: 5:44

I my mouth is watering. Charles goes back. He goes back to that happy place. You just saw that happy place. Look on his face. We all did, because who doesn't want to have a little bite of prime rib chili right now?

Charles Read: 5:54

That was the best pot of chili we have ever made that is awesome.

Chris Lalomia: 6:00

Well, charles, thanks so much for coming on the podcast with us indulging us with a little chili conversation For the audience. What we're going to do is we're going to talk a little bit. We're going to talk a lot about what he offers and what he does today, but I got to go back to the very beginning. So, charles, how did you get started in this business?

Charles Read: 6:20

Well, let's go back a little further. I got out of high school in Iowa, I joined the Marine Corps, spent four years in the Marine Corps. Thank you for serving. When I got out of the Marine Corps I realized that my skills I had learned in the Marine Corps weren't valued in business, even though I was an IBM trained computer programmer and systems engineer. But people who haven't been in the military don't understand what military brings to the table. So I went and got my degrees BBA, mba, set for and passed my CPA exam. While I was still in graduate school, went to work for Texas Instruments Whoa.

Charles Read: 6:58

That's a blast from the past TI baby.

Chris Lalomia: 7:01

Yep TI here in Dallas so that's obviously not a small business, no, big business, especially when you started with them. So what did you go to do there?

Charles Read: 7:11

Well, I was a financial analyst. I stayed there about 18 months and moved on to pick up a control or system controller spot and moved up through the ladder. I spent 15 years worked for big and small. I worked for pennies, I worked for other companies, did some startups, did some turnarounds, which was a lot of fun, though dangerous when he said I worked for pennies.

Alan Wyatt: 7:39

It took me a second JC penny, JC penny, you didn't work for pennies right At that point.

Charles Read: 7:44

No, I worked for JC pennies. I also did a turnaround in North Carolina.

Chris Lalomia: 7:48

I got that Took you a second, but you went in and out of the big companies and startups. Yeah, oh wow.

Charles Read: 7:54

I did all kinds of things as you applied your skills that way?

Chris Lalomia: 7:57

why did you bounce so much around?

Charles Read: 7:59

Well, I was moving up the ladder, yeah, getting better pay, more position, more authority. My final job was really owner part owner of a startup. It didn't work. We got bought up. It was part of a startup within a Fortune 500 company who had asbestos problems. They shed everything. I realized I was never going to get to the top of a major corporation because I didn't have the political skills. I'm unwilling to stab people in the back and toss them off the ladder. So 30 some odd years ago, the wife and I started our own firm.

Chris Lalomia: 8:43

Holy cow. So you started in Texas, started moving around. You said North Carolina, so you just kept moving the fam around, just kind of doing your thing.

Charles Read: 8:54

The kids were grown. When I married Ruth, she had five children. She was 10 years older than I was. I was 21. She was 31. My youngest was six. So by the time I started my own firm they were grown, which made life a lot easier, Thank you. But Ruth and I started it together. It was not just me that made it easier to work, because she knew how the hours we had to put in and what we had to do is entrepreneurs to be successful. It's one of the things I tell people if you're going to be an entrepreneur, if you're married your spouse better be on board, Otherwise you're going to have real problems.

Alan Wyatt: 9:40

Your fingers are crossed, Chris.

Chris Lalomia: 9:41

Amen, and extra system coming soon. My wife says she was on board 16 years ago. As we're finding out, not exactly.

Alan Wyatt: 9:49

Anyway, okay, let's back to this you want me to call your therapist and set up an appointment while you finish the interview.

Chris Lalomia: 9:54

Well, yeah, it's coming soon. So you started your own business. You said, hey look, we're going to do this, You're going to make the leap to take us through Again. You said 30 years ago and I love it right now is here in Atlanta. People always say, well, my house was built 20 years ago, because every 20 is like the magic long time ago number. Right, that's like I'm going to exit my business in five years, which is a forever number away from whatever you're going to do. So 30 years ago, here we are 23. So you started late 90s.

Charles Read: 10:24

I started over in 90s. It was really 91. We started.

Chris Lalomia: 10:28

Right. Okay, so there we go. 91. Wait a minute. That's why you need a good accountant. I don't think I have him on the podcast right now. Okay, all right. So did you guys build a business plan? Did you have clients? Tell us how you got it? We said, all right, we're leaping, here we go.

Charles Read: 10:42

Well, actually I was working as chief operations officer for financial express, which was a franchise operation with mobile accounting service, and the board was after the company to get rid of the original operation. So I bought it, which gave me clients to start with not a lot, but some. So Ruth and I bought that. Basically let everybody go and we ran it.

Charles Read: 11:15

And within a year within a year, the franchise or went belly up. The president was sleeping with one of the national sales girls and the vice president wanted to be president and was going around his back to the board and it all blew up. That was rather dysfunctional.

Chris Lalomia: 11:35

I would say that puts the D in dysfunctional, and that brings me back to one of my best gold nuggets. I learned right away Never get your honey where you make your money. I got that figured out.

Charles Read: 11:47

I have a similar phrase, but it's probably not apropos for the broadcast.

Chris Lalomia: 11:51

Let it rip. Yeah, you have no idea what I can say. Go ahead, let us hear it.

Charles Read: 11:55

Well, you know, don't shit where you sleep, there you go.

Chris Lalomia: 12:01

Gold nugget number one Yep, if you get that temptation man, that's why you're run and you run fast. All right. So you started the biz, and what was the business that you bought and what did you?

Charles Read: 12:12

start. Well, it was financial express. It was a mobile accounting service with a payroll sideline built in. We had vans. We ran around the local companies and did the books.

Chris Lalomia: 12:23

Oh, so back early 90s. Yeah, that's why I was trying to figure those, because, again, we were all talking. Today we're all on QuickBooks online. You can have your accountant anywhere. That's why we're going to get into this. Where you are now, you don't have to actually have them anywhere near your facility, but you had to go to their facilities and that was your idea.

Charles Read: 12:39

That's where. That's where we started. We did that for not too many years and technology got where it just was no longer necessary to be there, and so that by the mid 90s we moved into the internet and we started doing national work and it just, it just was silly to be doing mobile when you could sit in your office and the time it took you to drive to a client you could do a client in California, I mean, you know right. So we got rid of the vans and moved everything into the offices and became a more traditional setting as such. But we were a national firm fairly early on. Charles doesn't mess around.

Alan Wyatt: 13:22

I know he just makes a decision and just does it.

Chris Lalomia: 13:24

I could see that too, I mean, I was. I'm thinking he, like Friday, went hey, wait a minute, I had this dial up modem and I can make more money sitting right here than driving across Texas to look at this guy's books about his cows. He's like screw it gone. Vans are sold Monday, dial up modems are sitting in the office on Tuesday and everybody's Well, we were just past dial up, but not much.

Charles Read: 13:48

I think the first modem I had in the office was a Hayes 1200 Bod modem.

Chris Lalomia: 13:54

You know how old I am, I know that is, oh my God. And you thought that thing was screaming. It was, it was, I know, oh my gosh, all right. So you, you moved into that. You started building your clientele. Did you have an industry, a niche? How did you find that world?

Charles Read: 14:14

No, this is. We found accounting is a count. I mean you know there's some uniqueness in every business and every business thinks it's unique, but it's debits and credits, it's income and expense. For us accountants it's it's for small businesses, pretty much just accounting. I mean, you know your restaurants have tips and you associate costs differently in different industries, but it's money in, money out. It's small business, it's, it's fairly basic. Some of the esoteric things I learned in graduate school I never use, but that's okay too.

Alan Wyatt: 14:54

Did you kind of cater to a small business, or yes, yeah, okay.

Charles Read: 14:59

No, no, we, we. We've always been a small business company. Our average client today, I think, is 17. But we've got a large percentage of our payroll clients because we're now slowly in the payroll business are so entrepreneurs Right, they have a corporation, so they need to be employees and they need a W2 and they need to withhold and deposit funds. So we have a lot of single employers and a lot of small businesses. I our biggest clients, probably 250 people, though we're probably bringing on a 601 the first of the year.

Alan Wyatt: 15:40

So are those small businesses who you had in mind when you started writing books.

Charles Read: 15:44

Yes, absolutely, because there's nothing for small businesses. My last book, my latest book, is the payroll book guide for small businesses and startups. That's the title. There's nothing out there for small business on payroll. I looked there. There's nothing out there. The nearest thing is from the eight American payroll association and it's $600 and it's designed to train payroll specialists to pass the exams to become a certified payroll processor.

Chris Lalomia: 16:15

All right, let's that's not what it. Let's get into the payroll part and then we'll come back to accounting. You can tell us all the mistakes that we all make.

Charles Read: 16:21

And.

Chris Lalomia: 16:22

I definitely have a few that I made payroll. When? When should I start using a payroll company and why?

Charles Read: 17:47

The first time you have an employee, whether it's you or you hire somebody. If you have a corporation or an LLC that's following as an S corp, you're an employee if you work in the business, so you need a payroll company. It's not worth doing it yourself. The time you will spend on it, let alone the mistakes you will make because you don't know what you don't know, it ain't worth it. It's one of those things you should immediately outsource.

Alan Wyatt: 18:18

How long did you wait, Chris, before you outsourced?

Chris Lalomia: 18:20

So that's why I wanna bring this up. So I waited three years and I used to pull out the tables to figure out what my taxes were gonna be. And I went from quarterly to monthly. And the minute I went to monthly, I'm like no, actually I backed it up and he'll know this better than me. When I went to quarterly, I went oh my God, this is getting too hard. I had to get help. So that's when I said okay, I'm in trouble because that's the thing I found out as I was learning.

Chris Lalomia: 18:51

I didn't make the mistake, but I got the letter and the letter said the letter from whom? Oh, that's right, irs Cause we're the government and we're here to help. And they said you have not paid your taxes. I'm like oh, oh, oh, contrary, I'm all for it In my best English. And that's not exactly what I said. I'm like I sure as shit did. And I went to prove it. And then it was like getting in the bureaucracy, hell, they're like no, we never got your check. I'm like, no, no, no, the check has been cashed. No, you have to prove the check. So again, this is back in 2009,. 10, right and images. It was still facts, shit that I had to do Right the facts. I had to print them out, fax them and send it to them. And so what are the facts? Is that's the communication that goes into communication help, so you didn't know if they got it.

Alan Wyatt: 19:38

And so I'm waiting. It just curls up and rolls off their machining. So I would call somebody.

Chris Lalomia: 19:43

I would call somebody and they're like, well, you faxed it, right? I said, yes, I did, and then a month later I got the message your second notice you will be getting, and I forget that. It was like demand and interest and I'm like, no, no, no, no, I paid it and I faxed the proof. I'm like, okay, I'm done, I'm out. I call my CPA at the time and he does payroll services and I'm out get this, he goes, I got it, I gave him all the info and it all just magically went away. Yep, so that's why you don't want to do payroll or stuff. It seems easy, it is, it could be.

Chris Lalomia: 20:14

There's tables in theory in theory, but guess who you're dealing with? I R S, I R S those guys, man. That now that's a defense right there. But back to football. I want them on fourth and one and I want them on my defense because they are going to take these people off by their legs.

Charles Read: 20:32

The only problem with having them on defense at fourth and one is you will never get anywhere.

Chris Lalomia: 20:40

That's what I hear. See, you're on offense, You're losing, bro, You're out, you are giving that ball over and you're getting taxed and you're getting hit with interest and penalties. And those penalties oh my God, the number they were put. I'm like whoa whoa, whoa, whoa back up. I paid it and the penalties were almost the exact amount I had to pay.

Alan Wyatt: 20:57

So, charles, do you have to have those same conversations with the IRS on Chris's behalf, or do you just do it?

Charles Read: 21:02

All the time.

Alan Wyatt: 21:03

OK.

Charles Read: 21:04

All the time we take. For every one of our clients, we take a Form 2848 limited power of attorney. This allows me to advocate for my clients with the IRS. So I talk to the IRS constantly. We have lots of standard letters that we respond to constantly. The IRS makes millions of mistakes every year. Ok, on top of that, clients make mistakes, so when you add all this up, you have this huge thing. In 2019, the IRS issued $16 billion of employment tax penalties.

Chris Lalomia: 21:49

Let me get that number. Wait one more time. $16 billion in employer tax penalties, employment tax penalties.

Charles Read: 21:58

That doesn't include interest. That's just the penalties. The interest was probably that, again, over time, they abated a great number of these because people like me went in and said you're wrong and in addition this is something for your listeners the IRS cannot penalize you for a simple mistake. They can only penalize you for gross negligence. Now the trick is who defines gross negligence?

Alan Wyatt: 22:31

I think, chris, he does gross negligence every weekend.

Charles Read: 22:37

Well, the IRS is the people who define gross negligence. Now, in the end, it comes down to whether the court says it's gross negligence or not. So you have to fight the IRS to say, hey, this is a simple mistake, you can't penalize me, and if you do it right you can win what?

Chris Lalomia: 22:54

is the definition of gross negligence. I mean financially right, ok, all right, yeah, good yeah, then I'm good. Then no, no, no, no, in trouble.

Charles Read: 23:03

Gross negligence is what the IRS says it is.

Alan Wyatt: 23:07

Was the IRS with you in Vegas Not?

Chris Lalomia: 23:10

exactly so you don't show Different gross negligence, what? No, you can't say that, all right. So obviously you fight the IRS and that's two big gold nuggets. When you're sure everybody got that up, you need to get that limited power of attorney and with an apparel person, because you don't want to be dealing with this stuff when you're trying to run your business. Oh, I know.

Alan Wyatt: 23:34

It's worth every penny, isn't it?

Chris Lalomia: 23:36

It's worth every penny to have Charles do it instead of you In the beginning, when you're a really cheap dude, it doesn't seem like it. And I was there, guys. I was there. I was like no, no, no, and I started fighting them and I sent that fax to that fax land of nowhere. And then I finally went oh yeah, it's worth every penny, and then some.

Charles Read: 23:53

Well, chris, your CPA can take a limited power of attorney, like I can. Most payroll companies can't. They don't have CPAs that will take professional responsibility, so that's a great question to ask when you're vetting payroll companies, right? Absolutely Our biggest competitor, and I won't refer to them by name, but their initials are ADP.

Alan Wyatt: 24:17

What is it rhyme with?

Charles Read: 24:19

Well, their initials are ADP.

Alan Wyatt: 24:21

OK, but we won't say them by name.

Charles Read: 24:24

We won't. We won't use their name. They've got CPAs, they've got a whole floor full of them up in Rosalind, new Jersey, but they won't talk to clients and they won't solve our clients problems because they don't want to take the professional responsibility that goes with doing that. So a lot of payroll companies don't have CPAs or, in my case, us Tax Court Practitioner on staff to be able to do these kinds of things, and you really want somebody that can advocate for you with the service, not just tell you what to say or what letter to send. You want somebody that can do it.

Charles Read: 25:01

Because as a professional I in most cases know more than the IRS does about what they're doing. I've been doing this for more than 30 years. I've studied it, I'm a CPA, I've read their rules, I've read their regulations, I read their handbook. I go through all that stuff constantly. They don't. They get moved from area to area and have to get trained in it and so on. So in many cases I actually am instructing the IRS agents on what the law is and what their regulations are.

Chris Lalomia: 25:37

I have a little something for you there. Skippy Junior. I got another answer for you. What else can I do to be consistent? So here's a magic number, a magic thing. Nobody ever wants to say a number. So I got a small business and I'm doing $150,000 in revenue the first year, maybe $300,000 in the second year. How much do they pay for a payroll service? I'm one, I'm two, I'm five.

Charles Read: 26:02

How many employees you got?

Chris Lalomia: 26:03

Well, I got 40, but I'm talking about 45 now.

Charles Read: 26:08

OK, so say it's five people, yeah five, maybe $100 a month.

Chris Lalomia: 26:13

There you go Are you serious Right, so let's talk about that.

Charles Read: 26:16

I've had clients say to me you can't do it for that price. And I go I do it for that price day in and day out. You can't do that for that price.

Chris Lalomia: 26:24

So yeah, oh yeah. So welcome to ADP and Paychex land people. So people who have talked to ADP and Paychex are like yep, we're not mentioning them by name Whoops, but it rhymes with ADP.

Chris Lalomia: 26:37

I guess they're not going to be sponsors anytime soon, yeah, but I mean, I had quotes back when I was at 20, and it was going to be $650 a month, yeah, and I was like huh, so I did. I found another payroll service that is different and again worth all the money you just said. And if you just said $100, if you would have said $300 a month, I would have said, yep, you got to do it.

Alan Wyatt: 27:00

Oh easy.

Chris Lalomia: 27:01

Yeah, because it is well worth all those headaches. I've watched companies go into what's chapter 7, chapter 11, whatever is the worst one ever. The worst one ever. I heard a guy who bought it right out of. Was it chapter 7's the worst?

Charles Read: 27:14

7's the disaster where they liquidate you.

Chris Lalomia: 27:16

Yeah, they're going into the reorganization.

Chris Lalomia: 27:19

Yeah, All right. So 7, they're getting ready to go into 7. This guy buys their business. As he buys their business, the IRS tells him oh, by the way, the business you're buying hasn't paid payroll taxes in the last two years. You owe us, or this whole thing will go to pieces. And so he had to find another incredible amount of money to put this whole deal together. I heard this story because it became a success story 15 years after is that he sold it. But amazing because you can absolutely get slapped on the wrist for not filing, but you can absolutely get taken to the woodshed and whipped to the pieces if you don't pay.

Charles Read: 27:56

That's the big thing and for your listeners. If you don't pay what you withheld from your employees, sign up on account of your families, family members, or� that is not dischargeable in bankruptcy, it is a personal debt and liability for responsible parties, which means anybody that could write a check or send the money to the IRS is a responsible party and they will come after you individually and severably for the entire amount.

Chris Lalomia: 28:28

You don't want to mess with the IRS, bro. I'm just telling you that is just something I'm not kind of. Would I have not had to other than that one episode? But every time I get a letter now I'm just like send it over, scan it over, say John Charles, take care of it. I know I did everything right.

Charles Read: 28:43

Exactly, and that's what we do. The clients call us and the first thing I say is send me the letter because it upsets them to no end and they don't know what it means and there's codes on it that tells me things that they have no idea what's going on. I get the letter and I go don't worry about it, it's all it's taken care of it. In so many cases we've gotten a copy already and are already on top of it.

Chris Lalomia: 29:07

That is so key because I can't tell you. I get that letter and I already is blah, blah, blah, you're a bad person and we're gonna come take your entire business. That's all I read. And then there's code after code after code and I'm like no, no, no, he's, I got it, it's all taken care of Charles is like a blood pressure medicine.

Alan Wyatt: 29:23

Phew, I need that.

Chris Lalomia: 29:25

That is awesome. So, charles, how many clients do you guys support today?

Charles Read: 29:30

Roughly a thousand.

Chris Lalomia: 29:32

And you can take on more. Oh, we're taking on more every day, every day, and so it's get payroll. So let's talk about the business it is. How can they find you today?

Charles Read: 29:43

Get payroll is all over the web Get payrollcom. My email is CJR at get payroll and if they've got something that they really need answered. 972-353-000, ask for Charles Gotta love that.

Alan Wyatt: 30:02

I'm putting it out there, hey, Chris why don't you put your number out there?

Chris Lalomia: 30:05

Yeah, so it's 555. Wouldn't you? What do it do? What do it do? No, I put my email out there. I'll do it again, and it's chris at thetrustintoolboxcom. Anybody wants to talk for 30 minutes about business? You know I'm out there to do it. Just got hit up two weeks ago. Got on the phone with a great guy Gonna talk to another handyman guy on Monday. After this, we're doing this episode on a we're laying this thing down on a Wednesday. But the guy just reached out to me and said, hey, you got a chance to chat. I've chatted with him before, but he's got another question for him. I'm like, yeah, man.

Chris Lalomia: 30:36

I mean we'll do it, yeah, so Charles you had a question for Charles.

Alan Wyatt: 30:40

I want to talk about his books, and I know you're avoiding it because he's written four, and that's a lot, a lot more than you.

Chris Lalomia: 30:47

That's three more than me, I know I just, but I liked my book. Somebody said, hey, what do you put? The next book? See the first book. All right, so you wrote four. What are the four books you've written? Well, they're they're.

Charles Read: 31:00

they're payroll and and startup books. They're. They're really out of date, but the most recent one is the payroll book, a guide for small business and startups. As I said, I found nothing in the in the industry for small businesses, so I said I'll write something two years later and with the help of Wiley and Sons as a project, wiley and Sons as a publishing house. So we've got a book of 95,000 words. That's basically 30 years of payroll experience to still down to that.

Chris Lalomia: 31:29

95,000 words A lot of great stories Right now 25th on the on the on the best seller list for this category In.

Charles Read: 31:39

in business books it runs between 20 and 25 usually.

Chris Lalomia: 31:43

Yeah, I love it. See, the CPA just can't let himself go. See, that's the thing I love. This is that most guys go up there go. I'm a multimillion dollar business, I've gotten four books, I'm a best seller everywhere. But you know, he goes back to brass tax and says, no, it's 20, 25, you know very. So that's the real deal, that's no bullshit. People go out there check this book out. I have not just because I think I'm, I'm probably beyond it because I just pay somebody else to do all that stuff. But but if you're thinking about it, and a lot of guys I've talked to solopreneurs 510, you know want to scale up to 15 or 20. I mean, this is the, this is the real deal. Man, you want to check it out?

Charles Read: 32:21

So let me ask you, let me, let me, let me make a deal for your listeners. Okay, If they will go to the payroll bookcom and of the discount code podcast, I will ship them, free of charge, a copy of the book. Say that one more time Whoa, all right, here we go.

Alan Wyatt: 32:40

Gold nuggets.

Charles Read: 32:42

If they will go to the payroll bookcom, the website, enter the discount code podcast, we will ship them free of charge. No shipping, no handling, no nothing. A copy of the book as long as supplies last, that's amazing.

Chris Lalomia: 32:59

Thank you, charles. Oh, my gosh, that is awesome, charles. Thank you so much. So let's back this up. You know we've talked about again.

Chris Lalomia: 33:08

I just it was a great event at a college here locally with young entrepreneurs with their ideas sitting out, and somebody asked me so what do you think? I said I don't care how old you are when you start a business, I said but you just got to have a plan, you got to know what you're doing and stay after it, and it's hard work. You know, again, the idea is the idea. It's the execution that's going to be the thing that's going to set you apart. So I said that to three different people last night. So, charles, here he's doing this and he is doing this not at the ripe age of 21, 22, coming out of school. He's been at this for a couple of years and I think that's the part where people, especially young people, I think they miss out and I hope they're listening to this and thinking you know what, sometimes everyone's some of those older guys kind of know what they're talking about.

Alan Wyatt: 33:51

Yeah. Because Charles seems to clearly that seems to Charles has got it going on. I got a quick question. So basically you wrote a book that competes against yourself, Is that right?

Charles Read: 34:05

Yeah, but it's like this. Here's all the things you need to know, you need to think about, and when you get overwhelmed with them, there are numbers in the book.

Chris Lalomia: 34:13

Oh, beautiful, Right. So I liked that because I just got done saying I can show anybody how to do drywall repair. I can show anybody how to do crown molding. We'll put it in a video on the YouTube and then when they go try it themselves to go yeah, I think I just got to hire those guys, yeah.

Charles Read: 34:30

And when they call the IRS and this happened to me because you get emotional about your own taxes.

Alan Wyatt: 34:37

The IRS screwed up. It's emotional about the change in weather.

Chris Lalomia: 34:40

I get emotional. I get emotional behind somebody with four student driver stickers on their thing, but anyway yeah, back to the IRS.

Charles Read: 34:48

The IRS screwed up on my employment taxes and, being the expert, I just figured I'd call up the the agent and explain to him what he'd screwed up. And he basically told me I was full of shit. And I find my voice rising and I'm getting emotional and I'm getting angry and I find myself yelling at this asshole On the phone In the back of my mind. I'm going Charles, this is not good, don't do this. And I'm yelling at him and he proceeds to tell me basically where to go off and institutes a levy against my company. Wow, whoa, whoa.

Charles Read: 35:34

This was in the middle of covid. It took me two weeks to get a hold of his boss. And when I got a hold of his boss, he said oh, mystery, no, he shouldn't have done that. And it's all gone away. No, no problem, and it did. But I know who to call Right. Okay, and if you don't know how to, first of all, if you get upset, they're just gonna. They're just gonna do. Nasty to you, they'll do it. They're human. You get nasty to them, they'll get nasty in return. And if you don't know how to solve the problem, you're screwed.

Charles Read: 36:07

We had one client it took nine years For a simple mistake. The irs wanted to penalize them 95 000. I ended up talking to the chief of appeals in dc and saying shelly, this guy who worked for her Won't call me back. And she said I'll have him call you because I knew her, because I was on the IRS advisory council for three years. So he called me back that afternoon. After a year trying to get all of them, we put it with another appeals office and three months later my client got a refund for $400.

Chris Lalomia: 36:46

That beats a sharp iron stick.

Alan Wyatt: 36:47

Yeah.

Chris Lalomia: 36:47

Charles is a badass. I love this.

Charles Read: 36:49

That's because you know who to talk to and how to handle these things and how to advocate for your clients. If you don't know how to do this and you're not an expert at it and we're an expert because we've spent 30 years learning all the robes You're screwed. If you don't know how to do it, let's shift gears.

Chris Lalomia: 37:08

We got a few minutes left and I wanted to go back to the roots before we did the payroll. This has been amazing stuff, but I want to switch back. What are some common mistakes you see with people starting up when they set up their books and try to manage their own books?

Charles Read: 37:24

First of all, they don't set them up. No, they don't get advice.

Chris Lalomia: 37:29

Number one, so you're welcome.

Charles Read: 37:30

Yeah, yeah. You've got to have a separate checking account. You've got to have your company name on the checks. You've got to have a business account at the bank People don't know that you can't get these out of your. I mean believe me they don't know that.

Alan Wyatt: 37:43

I mean seriously. You're looking at me. It's everywhere. It's all over the internet. It's on the small business association website.

Charles Read: 37:50

No, they operate out of their pocket. They operate out of their pocket.

Chris Lalomia: 37:53

Oh, my God.

Charles Read: 37:54

And they don't keep receipts and they don't keep track of mileage and they just commingle expenses and revenues to make it impossible to audit properly. Yeah, you've got to set it up properly that's the first thing and get advice on how to do it. Talk to a CPA, spend an hour with him. He'll show you all the things you need to do in an hour. That'll keep you busy for a few months and get it all that set up. Wow, and you don't know what you don't know. You don't know how to hire people. You don't know how to classify people. Oh, I need somebody to do some work, I'll just pay them. Well, are they an employee or are they an independent contractor? Oh, I'm just going to treat them as a contractor. No, you don't get that choice. There's a whole body of law that determines whether they're independent contractors or employees, and misclassification can cost you big time.

Chris Lalomia: 38:46

Oh boy, how about that? So those are some big old nuggets right there. First of all, don't commingle. Start the business separate. The way my CPA was laid out for me was that don't pierce the corporate veil. You're going to sell an LLC. Do not commingle the funds. Don't pierce the veil. That way Nobody can come after you personally and after all your assets behind the veil.

Charles Read: 39:09

Yep.

Alan Wyatt: 39:10

How about that one, alan? I'm sorry, I'm stuck on commingling and I'm thinking about his original franchise, or that's a different kind of commingling?

Chris Lalomia: 39:17

Yes, that's nice, thank you, I like that. Okay, all right, so obviously know how to classify your employees. Got that, got to write that down because I got to get these nuggets in. I'm right this down because I definitely am doing it right correctly.

Alan Wyatt: 39:34

I'm not writing it down for everybody else You're writing more notes on this one than any other podcast interview we've ever had. But I still pay people to do all this. Give a little guilt.

Chris Lalomia: 39:41

Yeah, I know.

Charles Read: 39:43

And if you're paying people, what taxes you have to pay, what reports you have to file and when you have to file and pay them. You need to know what you don't know.

Chris Lalomia: 39:56

That is the golden nugget. You need to know what you don't know.

Alan Wyatt: 39:59

Yeah, especially when you're up against that might be the title of this podcast.

Chris Lalomia: 40:01

You need to know what you don't know, especially when you're up with the IRS. That's a fourth and one Right.

Alan Wyatt: 40:05

That's a fourth and one with the IRS. You need to know what you don't know. Genius, that's awesome. So, charles, how hard is it to write a book? Chris says it's really hard. It is very hard.

Charles Read: 40:19

It is a lot harder than I thought but yeah, you did four.

Alan Wyatt: 40:21

I mean, does it just mean you're a harder worker than Chris?

Charles Read: 40:24

Well, I look at the quality of the fourth one and it far surpasses the quality of the first three.

Alan Wyatt: 40:31

Oh so what's that saying?

Chris Lalomia: 40:32

about your book. I'm saying my book. Well, obviously my book's never been in the top 25 or anything, so maybe I need to get the fourth book to get top 25. I don't know, god, you gotta check this book out. I actually just had somebody say man, I'm still getting royalties, by the way you know, at least $10 a month, $10 a month.

Charles Read: 40:50

That's really good. I'm glad I did not plan on getting rich off writing the book. Yeah, me too, but it has brought me clients. So well, I was just going to ask did it actually work?

Alan Wyatt: 41:03

I mean, you're helping people, but then all of a sudden they're like hey, I need you.

Charles Read: 41:07

Yeah, and you never know when you get it. And sometimes I get a client and a year later they'll tell me oh yeah, I've read your book and I'm going oh great, I love it. But yeah, we get comments on it all the time, so it's a good book.

Chris Lalomia: 41:24

No, that's great. Okay, we're coming to the end and I hate to do this, but because this has been so many gold nuggets and you're right guys, I'm right now all over the board here. I've made a lot of those mistakes. I can't say enough about how cool it is to have somebody, when you get that letter from the IRS and your blood just starts boiling and you start freaking out, going, everything I've been working for is just about to get flushed down the drain. And you can say to your CPA or your payroll guy who's got a CPA, get payroll. That is, and go, man, I got a problem. What do you think? And they go, got it, yep, and you're like and the first time it happened you're like no way, no way. So I'm calling like every hour on the hour right, and I'm just flipping out and I've gotten a number of these letters over the years either taxes or payroll.

Chris Lalomia: 42:11

Payroll was the big one, but the taxes stuff. It's just good to have that great relationship so that can free you up, clear your mind, so you can go back and do what you're supposed to be doing and that's taking care of your business and making it grow. Absolutely. All right, charles, we are coming to the end. You've done a great job of plugging yourself. We got that. We'll put those all in the show notes and he's giving you a great, great deal, man, the payroll bookcom. You put in the, you put in the promotion code podcast and you get a free book about to set up your own payroll. There you go, man, go do it. I mean, why are you not doing it? Oh, I know why because there are 24 hours in a day and we only sleep in three or four.

Alan Wyatt: 42:50

They could pause the podcast right now. Do it and then unpause, Are you?

Chris Lalomia: 42:54

back All right, we're back. All right, here we go, because now we're going to our famous four questions. Besides your book, what book would you refer to all of our listeners who are looking to start a business or trying to scale?

Charles Read: 43:09

Michael Gerber is the e-meth revisited Nice.

Chris Lalomia: 43:11

I think I got a big one, got three copies in my office because anytime somebody comes in and says, hey, I'm thinking about starting my own business, I just go.

Charles Read: 43:20

I buy them by the dozen and hand them out to clients.

Chris Lalomia: 43:25

Nice, that's a great one. All right, what is the favorite feature of your home? The view, the view, alright we'll talk about the view.

Alan Wyatt: 43:35

Yeah, what are you looking at?

Charles Read: 43:36

The whole downstairs is windows, big, huge windows looking out onto Lake Louisville.

Chris Lalomia: 43:42

Wow, and since you're a cook, what's your? I got it. This is my second. This is my 2B. Question 2B what's your favorite cooking? What's your favorite grill?

Charles Read: 43:56

I don't do much grilling, but I won a contest for my apricot souffle.

Chris Lalomia: 44:02

Whoa Wow, apricot souffle.

Alan Wyatt: 44:05

I'm kind of a meat and treat. Maybe he'll send you the recipe, if you.

Chris Lalomia: 44:09

You know what? Actually, I got his email, so I'm gonna actually just keep up. Hey, where's the apricot souffle recipe? Can I get that? That's great Alright. When you're a customer and you're out there, what is a customer service pet peeve of yours?

Charles Read: 44:27

This is true with accountants and it's been true for many years and it's something that I am absolutely insistent upon with my employees and my staff. We return phone calls, amen. Accountants don't return phone calls because they always think it's a problem. It's not, it's a. This is just between you guys and me. It's a way to increase revenue because you're solving a problem they have. So we return phone calls. I return every phone call that day. It may be six o'clock at night, leaving a voicemail on your message machine saying I tried to get back to you. I know it's late, I'll try again in the morning, but we return all the phone calls.

Chris Lalomia: 45:13

Solid. I love that I was part of a study. I've talked about this before here locally in Atlanta. I get to get Metro Atlanta study on home services providers and what customers are looking for, based on consumer feedback. They do the same study for lawyers.

Chris Lalomia: 45:28

One of the number one complaints with all law firms is they don't call you back. They don't call you back, they don't communicate with you, they don't tell you the status. And I said this to a couple lawyers when I was on some of my shenanigans over the weekends, which are called what are those called? Again, gross negligence. Yes, that's right, I was on gross negligence.

Chris Lalomia: 45:48

So I started these lawyers and they're like it's because we don't have any update. They were defending themselves. It was hilarious. They're like well, we don't have an update. I'm like you get that. I said I get that you don't get updates, but they don't know that man. I said let me tell you about the home services world. If I don't tell them I'm on my way to their house. My guys don't tell them. They're on their way to the house. They go to a deep dark spot Very quickly and you guys think you're lawyers. So you're so much because you build out way higher than we do, and so. But they were said, they're defending themselves on this one. And I'm like oh guys, you're so, so off. Do you have business managers? And they're like no, we don't need them, we're lawyers. Of course, you are Okay.

Alan Wyatt: 46:27

All right, charles, so ticking time bomb, and I mean most people. It's, it's human nature because like, okay, I don't have anything to tell them and I don't want to make them mad because I don't have anything to tell them, but they would rather, now that you're still thinking about them and you don't have anything to tell them.

Chris Lalomia: 46:40

Yeah, it's hard, yeah, and I tell you we pound this into our guys all the time and it still is. Amazes me with some of our subcontractors they won't communicate with you, Like, in fact, I had one guy call him and I said hey, I just referred to one of my buddies. What's going on? You're not getting over to him? He goes. I'm embarrassed, Chris. He said I didn't have an answer for him and I knew I was letting you down. And he said and Tuesday turned into Wednesday, turned into Friday, turned into two weeks, and that my buddy called me or text me and said you trust this guy, right, I'm like 100%. So I had to get on the phone and like, talk him off the ledge. Geez, I'm like dude, he goes.

Chris Lalomia: 47:15

I didn't have an answer. I said that's the wrong answer. Just call him right to communicate. You're the worst I can say is you suck, I'm going somewhere else. Okay, thank you, yeah, All right, I tried, All right. Last question we love home services. I obviously were a modeler and a handyman here in Atlanta and Alan is a commercial real estate property manager, not property manager.

Chris Lalomia: 47:36

Seller, agent, agent, agent, agent, agent agent, agent property manager because I just looked at the email they should have. All right, so you want to? You want to go? Hello, all right, we're back and he's also good working on his house. So give us a DIY nightmare story.

Charles Read: 47:58

The manifold on the upstairs tub cracked.

Chris Lalomia: 48:06

Uh, oh yeah. What did you do and where did it go?

Charles Read: 48:10

Well, I noticed it because it was coming out of the light fixtures in the kitchen, the water.

Chris Lalomia: 48:16

That was only one story below. Yeah, yes, oh, that's good.

Alan Wyatt: 48:20

Taking a little more. Well, that's as far as what you're saying.

Charles Read: 48:23

Well, it could go further, but that's as far as it's got, because we shut off the water and did some other things and I still have some molding around one of the doors that needs to be replaced, but we had to tear open the wall to get it fixed and that hole in the drywall sat for probably four years before we got it fixed.

Chris Lalomia: 48:44

So obviously not, not an emergency. Thank you, Charles. If I was in Texas I would come help you out at the trusty toolbox, but I'm not. But we'll take care of that mold. We can take care of that. Well, not don't do mold, but we can remove it. We just can't remediate it.

Charles Read: 48:59

Yeah, so I've got. I've got a bold remediation and asbestos remediation company as a client, so we're good.

Chris Lalomia: 49:07

Don't be afraid to call them, and if you have a drywall client, don't be afraid to call them either. Let's get it all finished, okay.

Alan Wyatt: 49:12

All right.

Chris Lalomia: 49:12

Charles.

Charles Read: 49:13

We had a fix.

Alan Wyatt: 49:13

It took a while.

Chris Lalomia: 49:15

That's awesome, charles. This has been amazing. Guys, if you haven't learned something here, go get payroll. Go figure this out. I don't care if you got one, you got five, you got 30. Thank God you got 30. Let's keep going. Well, maybe not, thank God you got 30, because that's just 30 headaches. Okay, but I'm in the wrong spot. Take advantage of the offer. Let's do that offer. Let's get going. That's crazy stuff. Right there, man. Another great episode. Charles Reed, thank you so much for your books, for your contribution to the industry and everything you're doing. We're out of here. Let's go make it a great day. Thanks, charles, you're awesome.