House Flipping – Business or Investment?
This week’s Tax School blog reviews how a taxpayer’s activity is viewed by the IRS when it comes to house flipping – purchasing a property, fixing it up, and selling…
May 16th, 2022
As his final blog installment before starting his new position at NATP as the Director of Tax Content and Government Relations, Tom O’Saben wants to thank everyone for the opportunity to be a part of their professional lives and challenges tax professionals to have empathy, care for their clients and continue to learn and share knowledge via the many educational opportunities available through Tax School.
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By Tom O’Saben, EA
Assistant Director, Professional Development & Outreach
U. of I. Tax School
LINKS REFERENCED IN VIDEO:
Here we are, ladies and gentlemen, Tom O’Saben coming to you from the University of Illinois Tax School for the last time. What a long, strange trip it’s been. I want to try to leave you today with some thoughts going forward, about the difference you make in the world, and the difference you can make to your clients.
You know, the first thing I want to do is kind of give you a little bit of background about life. And from that, I mean, given the fact that I’m now leaving Tax School, and assuming a new role of Director of Tax content for NATP, the National Association of Tax Professionals, some of you out there might be thinking, “wow, why is it that a person would start and stop in parts of their lives,” when really what I want to tell you is that I believe life is full of building blocks that get you to a certain point. We all have experiences to learn from ideas that we take from one position to another, and hopefully, it’s all a realization of learning. And that’s what we’re all about. That’s what we’ve been about here at U. of I. Tax School. That’s what we’re about when we talk with our clients. And that’s teaching and learning, isn’t it?
So, I go back, and I want to reflect a little bit on my life. And first, I want to give thanks to my mom, who raised four boys on her own. Never once could we ever be considered victims, we were expected to do things and accomplish things and not be the victims. That was really, important. I’m very proud to be the youngest of four brothers, all of whom have experienced great success in life. And so, thank you. Thank you, mom for that.
When I was in Catholic grade school in Belleville, Illinois, my eighth-grade teacher, English teacher, Sister Melissa. Sister Melissa taught me the public speaking skills that I carry with me to this day. She taught me how to make eye contact. She talked about not using the podium as a crutch. Again, a very early life skill. I was no more than say 13 years old, a very early life skill to take with me. I want to put a great shout out to Father Jack McEvilly, no – actually Monsignor Jack, from our days at Althoff Catholic High School in Belleville, Illinois. Again, one of the great inspirations in my life. Here we were in a small Catholic school. I played the trumpet in band, which I very much enjoyed. I was in theater, which I think was also a very great learning experience towards a teaching career. But Father Jack never once said, “Well, we’re a small school. We can’t take on tough assignments”, such as a concert band doing something like the 1812 overture, the William Tell Overture, all those types of things. Because we didn’t have a full-blown orchestra. No, we never took a position that we were too small or not good enough. He challenged us and he made life fun.
I looked back in my adult life when I reached the point where I wanted to be a tax person. I had three really, great instructors I’ll give a shout out to. My dear friend Rose Cuca from Glen Carbon, Illinois, Kathy Westbrook from Troy, Illinois, who taught me how to never get really, really shook up. And Pat Palmeri, God rest her soul, from Fairview Heights, Illinois, who was a great businessperson. All of these three people were models in my life. And then when I decided that I wanted to take those building blocks, those public speaking experiences that I had from Sister Melissa, or being in the band, and theater, from Althoff Catholic, and be able to parlay that into education.
I want to thank the folks at NATP, Greta Zeimetz, for example, who hired me back in 2003. And then we come to the University of Illinois Tax School, many thanks to Gary Hoff, who’s now retired from U. of I. Tax School, and to Terri Kobel, who’s also retired, who saw perhaps some abilities and granted me the opportunity.
We continue through life and in those building blocks, I left the University of Illinois Tax School when I was offered a training specialist position within NATP. I did that for a couple of years and really was burning out on the travel. But in those building blocks of life. I contacted Terri Kobel at the U. of I. Tax School in mid-2011 and said, “Hey, I think I would like to maybe come back “, and she was very gracious to bring me back. All the way forward to 2019 when again, on all of these building blocks. My current position as Assistant Director of Professional Tax Education and Outreach was presented to me by Terri and the group at the University of Illinois Tax School. By the way, when I left my position with NATP back in 2011, I never burned a bridge, but rather created building blocks to the future, and still kept some connections in teaching with local chapters, etc. So now we come full circle to 2022. And I find myself with an opportunity presented by the National Association of Tax Professionals to go ahead and take all those building blocks, going back to Sister Melissa, and Father Jack, and building on these blocks of experience to become the Director of Tax Content and Government Relations. So, I’m humbled, and I’m appreciative. But I’m also looking at, again, those building blocks of what has happened over a career that spans more than 30 years and a life, which I’m now nearly 62.
So, let’s talk about tax professionals, and how tax professionals make a difference. You know, I’ve been doing taxes since 1991. And in that time, what I have found is the best compliment that I could hear from a client is that I understand things better than when I walked in the door. They didn’t say I was the least expensive person around, the most knowledgeable person around. But no, when they left my office, they felt as though they understood things a little bit better. Now, case in point about the difference we can make in people’s lives. Two new clients, really, people I had known in the past, but didn’t come to me for their 2021 tax returns. I just met with a couple of Saturdays ago. Someone else had done their return in one case, in the other case, they had attempted their own. So, in the one example, the client was crying, because they’d received a letter from the IRS. The first thing I did even before I looked at what was happening was, I said “it will be okay.” So, I want to leave you with a goal of showing empathy to your clients, not sympathy, but empathy. If you show empathy and caring to clients, they will beat a path to your door. I sat there with the client, looked at their information, and I said, “okay, I see what’s happening, but I also see what we might be able to do”. But I already had in my mind, let’s assume that I didn’t have a resolution. In other words, they were going to owe tax to the IRS. For whatever reason, don’t we have options that we can share with them that they may not know? For example, like a delayed payment plan, or an installment plan or maybe even an offer in compromise. So, the second client who came to see me had gone to a another professional. And one thing I have never done in my career is, I will not criticize another tax professional. But the long and short of it was I saw a mistake on the return. I asked questions about a capital gain that was reported, etc., etc., and so forth. We reached the conclusion that the client would not have a taxable capital gain. So, what did I do? I educated the client about that. But at the same time, I didn’t lead him to a conclusion, I asked questions, which brought me to what I was looking for, But I didn’t coach the client on how he should respond. In both cases, those clients said, “I can’t imagine ever going to someone else when you do such a great job of educating me.” I’m not saying these things, ladies and gentlemen, in order to be self-serving, I’m saying that’s the difference that we can all make with our clients. Show empathy, and caring, and more. Moreover, and I’ll quote my friend, Larry Gray – a friend of Tax School, who says “know the law.” So, I kind of summarized my life in a very brief history.
But I’ll tell you when I was very early in my career, and Rose Cuca. my dear friend and mentor said, “You need to go to Farm School,” and I said “Farm School. What’s Farm School?” Well, it was the University of Illinois Tax School at the time. And me being a person in the St. Louis Metro area, I went to school in Collinsville. It’s amazing to me today that I could go to a two-day session by the University of Illinois, and I was ready to face my clients for the next tax season. Aside from maybe looking at the newest addition of Pub 17 from the IRS, or perhaps having a QuickFinder to refer to that two days of education, presented by people like Chris Bird, Ted Knapp, Sue Voth – presented by those people got me ready to face clients for the next year. Ever since I started teaching in 2003. It seems like we have crisis after crisis that we’ve had to deal with. In 2008 we had nearly a depression. And of course, we had the pandemic in 2020. The way the laws have constantly been coming at such a fast and furious pace. I can’t imagine that our two-day Tax School (Fall Tax School) would be enough for you to face your clients, and to give them the best advice you can with empathy and caring.
Recently, I started to come to a kind of a realization. And for those of you have attended webinars that I did in the past, that the education that is offered here at the University of Illinois Tax School, is multifaceted. And I want you to have this as your number one takeaway beyond having empathy and caring for your clients. If you have what I’m about to share with you, then my time here has been well spent. And I can wish you well in the rest of your career. Realize, for example, that Fall Tax School is part of a multi leg process of education that is ongoing. And I’m sorry to say ladies and gentlemen, it’s never ending. If people think that all they have to do is get a new software program, the software is going to do the work – well, people don’t need you; they just need software.
So, think about it as we go through the entire year. And I’ll start the year by beginning after tax season. Here we are in May, what’s upcoming? I’m going to look at my sheet here. University of Illinois Tax School has a 1041 Basics webinar coming up on May 24. When we look at 1041, we’re talking about trust and estate, one of the biggest growth areas we could see in the future. Also, the University Tax School is doing a great job of bringing outside instructors in. Outside, knowledgeable people from across the country. It’s always good to get different perspectives. But I would encourage you to consider the 1041 Basics webinar on May 24. Go to our website for more information.
On June 14, there’s going to be a Charitable Trust and Gift Annuity webinar that’s sponsored by the University of Illinois Foundation. Again, another source of information in this multi legged stool of education that you should be pursuing throughout the course of the year.
So okay, we go deeper into the summer, we’ve got Self Study programs that you can do at your leisure. When it comes along to September, we typically have an in-depth Farm Seminar – scheduled for around the end of September, I want you to consider that as well, if you deal with anything in farming, and for that matter, a lot of times in the farming session, there will be some interesting tidbits that you could take away for any small business owner. Keep that in mind as well and be sure to sign up for Tax School’s email notifications so you’re one of the first to know when registration opens.
Then you have Fall Tax School. You get your two days of credit. But remember that it was really a good experience for me to be on the inside of the mothership as we describe it, because I could see how the deadlines impact what must happen. I mean, we must have the Federal Tax Workbook ready to go to press by mid-September. Is there a possibility that laws could change between mid-September and when you face your first client? The answer is it’s more than likely yes. You know, going back to the days when I went to two day Fall Tax School, I tried to go as late as I could. But typically, the IRS didn’t do anything after the end of the year which impacted laws. Well, we know that’s not the case anymore. So be a part of Fall Tax School.
Then if there was some topic within Fall Tax School, that you felt like you wanted to have a little bit more time spent on. Fall Tax School is done on a webinar basis after Fall Tax School is finished. Again, a chance for repetition a chance for you to have it soak in a little bit deeper.
Well then, we come into January, we’re not yet into filing season. We have at the end of January Getting Ready for Filing Season – the most up-to-date information that we have available, shared with you as you get ready to face your clients. Here, being the University of Illinois, we are part of the state of Illinois. We typically do an Illinois state specific webinar.
But we don’t go blind. We don’t go dark during the filing season. That’s where if you’re not a member, you should belong to our Facebook Group. I want to really put a shout out to those members who take their time and talent and share it with others on the Tax School Facebook Group. It doesn’t cost anything, but you might consider yourself to be an expert in certain areas or you have at least experience and people have had the ability to share their questions or share their information in a supportive atmosphere. I’ve never seen anyone criticize another and I don’t expect that they will. But you can get information, get your questions answered on a real time basis as things change during the tax season. So, the Facebook Group is important too.
Beginning way back in June of 2019 after I came to the mothership, we started doing weekly blogs and I base them really on what my experience had been within the tax office I still work in for Sue Voth who owns V&R Accounting and owns my practice now. Okay those weekly Tax School blogs – what came up that’s timely to share with you. I think timely is important, so I encourage to subscribe to the Tax School Blog and be among the first to be alerted of new content.
So, you look at all of these factors. Let’s see if I’ve missed this anything here. I mentioned about Self Study where you can study on your own, we continually look at these programs to make sure they’ve been updated. What I want you to have as a takeaway, as I say, adios and move along my building blocks to like, another part of life’s experiences. I say to you have empathy, caring, but again, know the law, don’t consider your education to occur within a vacuum, get as much education as you can, and continue to grow in your knowledge and your caring for your clients. And you know what the old saying was, if you can build a better mousetrap, people will beat a path to your door. And yes, you will be that better mousetrap. And people will beat a path your door. You know why? Because you care.
So, for all of the blogs I had done for the many, many months, I would typically quote Jack Buck, the great announcer for the St. Louis Cardinals, who used to always say when he was on the radio, “we’ll say goodbye for just a while.” But you know, I don’t think that’s really the appropriate thing for me to say now. I thank all of you for your wonderful comments on Facebook. And it was really, really humbling. I found the Jewish term “Shalom”. I’m not a Jewish person. But I’ve looked up the meaning of the word, and it said, we’ll say goodbye or farewell until we meet again. So, “Shalom” to all of you here. And I wish you health and happiness in the future.
And so, for all of us here at the University of Illinois Tax School, this is Tom O’Saben saying “Shalom.”
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