Fear of the IRS + Value of Consensus

Business brain, episode 539 for Wednesday, April 10, national report, IRS tax fraud day. It's actually a thing. I know.

Scaring me.

2024. Oh, it's too quiet. We're gonna make it louder. It was the music was even afraid of the irs. Greetings, folks, and welcome to Business Brain. We are the show where we take a few topics, we dissect them, we use them, we analyze them, we tune our business brains together every single episode. And yeah, national report, IRS Tax fraud Day. It's a thing like they have a whistleblower program where they will like, reward people. And at first I didn't even wanna talk about it on the show. I was gonna pick a different, like, day of the day. No, it's good. It's good. But we need to know that, like the IRS ENC encourages our neighbors and our friends and our business partners to rat us out.

I know, that's crazy. Okay, now you've totally sidetracked my intro topic with deals that acronym that freaks me out every time whenever I get those letters in the mail. And it's always like, what? Because you're. Let's face it, when you do your business taxes, or maybe your personal taxes are very complex.

They're complex. Yes.

It's like you're throwing a dart because you know you're doing the absolute best you can to adhere to the way the tax code is. But you have to hire very expensive accountant people, you know, and their assistants to go through everything. And how do you know? You don't know it's right. And that helps me out.

And you know that you're. You're taking a path through to maximize your tax savings, to reduce the amount of taxes that you're gonna pay.

It's your patriotic duty.

It is literally, like I always say, not my rules. Right. I'm gonna find my path through and of course I'm gonna leverage the expertise of accountants and other experts. But like, by doing that, you are treading in to gray area at times. Like it's all intentionally. You are correct.

Or. Or you're missing out. And I always.

That's the problem.

Yeah. And. And I think most people miss out because they're. They live in fear of the irs, which you shouldn't. And I'm going to address that in a moment.

Yeah.

Because I've had. You might be surprised to hear that I've had a few. What should we call run ins.

I would. I would use the term run in based on what I've been through.

Yes, yes, yes. So run in. So most people don't take the time to explore ways to minimize. If you, if you own a bunch of businesses, you do. You're kind of forced to. Right.

It's where your profit margins live. Yeah, often.

Yeah.

Yeah, yeah.

Right. And so, you know, we will get letters in the mail. And Renee always hands me. And she says the same thing every time she hands to me. Says, these make me nervous. Oh, yeah, every time. And I'm like, well, it's not that I, you know, like them, but most of the time they're pretty innocuous and, you know, but they're what I.

What I. What I. What drives me crazy is for years now, we've taken advantage of the postal services informed delivery program.

Oh, yes. And you know, early, you know, but.

All, you know, you see a picture of the letter, and then you get to spend hours wondering what I would cancel it immediately. I know.

Yeah. I, I, you know, and I, I have learned. Okay. So you shouldn't live in fear. The irs, actually, you should invert that.

Okay?

I have learned because I have made mistakes. You know, we think mistakes are tuition here on Business Brain because you always learn a lot. So when I was a young entrepreneur, maybe, and this was many, many, many years ago, you know, you make some mistakes.

Yeah.

Maybe you didn't report something. Right. Or if you. One thing that's tough if you're in the inventory business. Or maybe it's. That's just my perspective. Maybe it's every business, but it's every business when your quarterly taxes are due and you go, well, if I made all that money, why don't I have it? Where is it? And so, you know, there were times when you just didn't have it, and you feel, okay, how do we deal with this? Or whatever. And I can remember getting, you know, a. Letters from there, said, hey, you know, you, you owe another $50,000 and whatever the number is, and you owe this penalty, and this is the interest. But surprisingly, if you're proactive and you're positive and cheerful and you call up and you. And there's a phone number from the call, and you kind of get a caseworker, and it's just a normal person, and you go, hey, I'm. Wow, I got this letter, and I really want to work with you to figure it out. I, I'm gonna need, I'm gonna need to do it some way. Maybe you have to pay it over time. Maybe you have to do something. I don't know. But if you, you get the Right Person. And there's a. There's a tip here coming. It could actually be a decent experience. I. I wouldn't say pleasurable, but decent.

Right?

Yeah, but the. The tip is if you get a person on the phone and you're already sensing an antagonistic relationship, you just hang the phone up.

Yes, Hang it up.

You don't have to say goodbye, do whatever, and just call back, because you'll get another person and what you want. Maybe it takes two or three calls. And I've done this to get somebody that answers the phone with a little uplift in their voice. Hi, how can I help you? Instead of, this is John with the irs. You don't want that guy.

Right?

You don't want that guy.

Right?

You want Barbara, who's like, hey, how can I help you figure this out? You're being great that you're calling, and we don't have to send you 50 letters and dock your bank account or whatever. And so if you're proactive and positive and you get the right person, you can get it worked out in a very positive manner.

Yeah, that's been my experience, too. I mean, I treat it like anything else. If you have bad news to share with a customer or if you become aware of bad news that your customer might someday find out. And this is good advice in business in general, but it definitely applies here to dealing with the irs. When you discover that you have a choice, you can be proactive about it and call the customer and tell them, or you can wait and see if they discover it and there's a chance they won't. And you get to skate by on that one. I'm not recommending this. I'm just acknowledging it. However, if they find out, and in most cases, if there's going to be bad news that affects a customer, they're going to find out. It's how these things work. Then they are calling you to inform you of the bad news. You don't want that. Right. So it's always better to come up with, okay, we've discovered. Here's a mistake we made. Here's something we did. We need to be proactive about it. You come up with the way you want to present it to the customer, and you present it to them. Now, with the irs, it's a little different because you don't sit and analyze your taxes to find mistakes. I guess your accountant should. And if they. If they find something, then absolutely be proactive about it. But with this letter that you get from the irs, hopefully you never get it. Hopefully none of us do. Knock it on wood. But when one of the. If one of those shows up, call them. Don't wait for the second letter to show them. Call them based on the first letter. They already know that. They think there's a problem. They might be wrong, they might not.

Be, but sometimes they are. I know that does happen, and you may need to.

You might want to call your accountant first before you call the irs. But get on it. Don't be like, well, I'll just wait and see if they forget about it. They don't forget. You can. If they're wrong, you can show them, and then they go away.

It's slow. It can be slow, but remember, they're, you know, charging you interest the whole time. So while you think you're kind of getting away, maybe getting away with it, you're not, because there's much cheaper money to get than. Than borrowing it from the irs.

Yeah. Don't borrow the money from the IRS that you're going to pay them anyway.

Yeah, yeah. And, you know, talk to some people that have been in business for a while, and, you know, most of us have dealt with. Had to deal with the IRS at some level.

It sucks when that letter shows up. Don't give up. I'm with your wife. Like, these things make me nervous. It's like, well, yeah, same. I mean, because you don't know what. Like, you don't know what. What is under this rock?

Yes.

What kind of snake is under this rock? Yeah.

Yeah, that's right. Be proactive, be positive, be optimistic, cheerful. And you'd be surprised to how, you know, usually can get it worked out.

You can usually get it worked out. Yeah.

Yeah. For sure. Yep. Cool.

Awesome. I have another thing to talk about, Shannon.

Yes. That's good.

I have resisted doing things like this many times in my career, and that is joining industry organizations. This is especially true when I am one of the people who was involved in the industry before such an organization came into existence. And I have a very specific example.

Okay.

I've been podcasting for almost 19 years. Podcasting has not been a thing for more than 20 years. Right. Podcasting will hit its 20th first birthday this summer, and there's arguments that we could make that actually, like, somebody like Sean King and our Universe started it 10 years before that. But we'll go with this just for the sake of argument here, acknowledging that it's probably wrong.

Okay.

But so I started podcasting. It'll be 19 years in June. Podcasting started 20 years ago. In. In August. So first year of podcasting, it was still all very much the wild west, Right. When I started this, and then we started, we were one of the first. If not, I believe we might be the first podcast ad sales representation organization with Backbeat Media. Because Backbeat existed before podcasting. Right.

You were selling on the web. On the web. Banner ads.

Banner ads and text ads and things like that. Yeah, Yep, exactly. So we immediately pivoted that into. Or expanded that. We didn't pivot right away. We expanded that into podcasting. So, like, there's an argument to be made that we were actually the first, but whatever. Certainly amongst the first. And no one argues with any of this.

Got it.

Got it. Well, you know, we've been here for a while. The industry has grown up both with us and around us.

Okay.

There's people in the industry that are way bigger than we are. Right. You know, I started a website before Google existed. Doesn't mean that my website's bigger than Google.

Yes, correct. You know, you were, like, 8 years old.

How it is. Yep, exactly. So there's. There's a group. It's a. It's an organization called. Sounds profitable. They have been in existence for a couple of years, and they are a trade organization of the podcast industry.

Nice.

Yep. And as soon as I found out about them, I immediately had this, like, negative reaction to. We don't need that. We're certainly not going to join that. We've been around before they were even, like, in business, let alone in that business. Right.

That's your fierce independence. You got it talking right there.

It absolutely is.

Which is a commendable thing, but sometimes can have its drawbacks.

You got it. It's a tool that should be appropriately leveraged at times and then put in the box at other times. Right. You don't want to go to a cocktail party swinging your hammer around. That's the wrong place for it. But when you need to put a nail in the wall, perfect place for the hammer. Right. And the same is true with this fierce independence. And so I resisted this. I even. I don't want to say I started a fight with them, but. But I showed them a few times where they were wrong about things because they were incorrect. Like, factually incorrect. Like, you know, not. Not like an opinion thing or whatever. It's like, nope, nope. What you're saying to people is incorrect, and here's why. We've been doing this for a very long time, and we're nerds, and we know this, and they were like, oh, actually, you're right. I'm like, yeah, I know. But, you know, doing that was not intentionally done as an act of assistance. It was done.

Yeah.

It was done by me to prove to myself why we don't want to be part of this group.

It's your confirmation bias.

Absolutely. It's like, well, they were wrong. Why would we want to join them? That's ridiculous. Like, they're, did they ask you to.

Join them if, if they had come and, and came to you as a respected elder. Let's, I hate to use that word of this kind of thing, and said, hey, you know, we know you've been around for eight, 19 years, da, da, da. We'd love to have you involved or love to get you as on a charter member. Would that have changed your fierce independence, which I have as well?

I don't think it would have. It would have maybe stroked my ego a little.

Yeah. Yeah.

But.

Well, that's what I'm getting at. If they would have, would you have thought differently had they, you know, come. Come to you in the beginning in.

A dip, in a different way? I don't, I don't. End result wise or initial result wise. No, I don't think I would have joined them. I think I, I think I would have stayed away. I would have said, no, no, I like, we don't need this. We don't. That's stupid. We, we already know everybody we need to know in the industry. Why would we join this organization where we can be part of a thing? And I was wrong about all of this.

Okay.

Yeah. We have since joined this organization and we've only been members for a month, maybe month and a half. I've known the people involved for a very long time, and it's already in this first month. It's proving its value.

Oh, that's great.

Yeah. Now, did I need to swallow a little bit of probably pride that like, they are making connections in the industry that I'm not and therefore they actually have value to me because they have these connections that I don't, but I want to have. And so I could certainly go and develop all these connections by myself. But it's way better when you've got somebody singing your praises for you.

Yes. And that's their business. Right?

That's their business. My business is doing different things.

Yeah.

And that's the reality of it is. Yes. These trade organization, like we could have, instead of doing what we do, we could have started a trade organization like they did and do all the things that they're doing it. Whether or not we have the skills and connections and influence to have done the exact same thing they did. We didn't. We chose to do different things. They chose to do this.

Yeah.

And there's a world, and I live in it, where it makes perfect sense for us to work together.

I think that. Yeah. And I think those biases are, especially if you've been around and you're kind of a veteran of certain things. All of us, all of us have those. And, and I, I commend you for recognizing it and being, okay, let's try, you know, see what this is all about. Because, I mean, I have these same kind of things. You think, well, they don't really know what they're talking about, but actually maybe they know different things. They may not know what I'm thinking. They don't know.

Right, right.

I don't know if that even makes sense.

No, it does make sense.

But certainly they're bringing another viewpoint to, to the equation that can be beneficial.

And they're a tool. There are things that I would like to see change in our industry. I would like to see it evolve in a certain way. These folks at this group sounds profitable. Are in touch with 100 and I think almost 180 companies now in the podcast industry. And so if I can find out what their focus is for the industry, like, there are certain things that they'll be able to help us very specifically with here at Backbeat Media. And then there are the industry direction things. And being able to have influence over how they are choosing to try and influence the industry, it turns out, can be very helpful, especially if I can, if I have, because I'm a member, they therefore pay attention to some level of what I say. They're paying attention to it. But I'm also in contact with many, not all, but many of their other members. And if those people, if we're all on the same page and we can have this trade organization sort of push this collective agenda, well, that's really valuable, almost like a lobbying group. Like, not, not to the government, but to the industry. Like, there's value in this. And it saves me and our company and most of the other companies from having to try and lead the charge on changing things and sort of the nature of the industry. And not only does that save me time, but it also saves me social capital, political industry politics capital. Because if I get out and stand on my soapbox and bang the drum about everything that bothers me, well, eventually people stop listening because they're like, oh, that's just Dave. He's screaming and yelling about stuff again.

That's right. Yes.

No, does I want to have somebody else screaming, yell about stuff? With the weight of the industry behind them, you can't ignore them. It's different.

I have questions, so.

Of course.

Yeah, of course. Because I always learn the most. Like we said.

No, I'm learning the beginning of the show.

No, no. So you joined as an organization or as an individual?

No, as an organization.

Organization. As the advert like do, or is it all agencies that are kind of.

No, there's all kinds of businesses. Businesses, yeah. Every ad agency with whom we work is a member of this. All of our competitors, the ones that matter, are members of this. So it's.

It's okay.

It's an organization for the industry, not for any one type of business. Now it's an organization for the monetization portion of our industry. So as like an independent podcaster, if you're just producing a podcast. Podcast that you're not monetizing, you probably have. No, no. They would let you join, but I don't, like. I don't think they're not going to teach you how to, like, get a better sound out of your microphone. Yeah, of course. Well, but that's, like, also valuable.

Other.

Yes, but it's. There's other places to do that. Other.

Yeah, place it. Okay, great.

And they charge for membership and everybody pays the same. It's 500 bucks per month per company. It doesn't matter if you're Backbeat Media or Spotify. You all pay everybody 500 bucks a month. Yep.

I like it. That's cool. I do, too. I think it's. I think it's great. And I think every industry has groups like this.

That's what I'm saying.

Construction.

Yes.

H Vac, you know, whatever. Book publishing. You can do a little bit of research and probably find these groups. And if you're in that business, you know, we. We've done lots of. Or not lots. We've done a few episodes on other kinds of groups that you can join conferences to go to for and, you know, individuals, all that kind of stuff. So, yeah, I think it's great. And I think it's important to get over the bias part of it.

Well, and as we've been doing this, because I learned the most. I have learned that a big part of my resistance is that by joining this and by saying what I have said here, I am assigning value to consensus, and I do not like, I don't I don't worry about consensus. When I'm going to do something, I just go and do it. But I also.

Entrepreneur. Yeah.

Yeah. But I also know deep down inside that when consensus exists, things are easier to get done. And I don't like that, but I do know it to be a fact. So here I am assigning value to consensus.

Well, that's great.

I don't like it.

Keep us.

I'm evolving, Shannon.

No, I'm the same way. I don't. I'm not a group guy.

Right.

You know, fiercely independent.

Yes.

Patently unemployable.

Yes.

You know, that. That. That's great most of the time, but sometimes.

Exactly.

You have to get involved and to get things done, and certainly you got.

To get out of your own way.

Yeah. Yeah. That's awesome. Yeah, that's great. Thanks for sharing that.

Yeah, no, thanks for letting me share. It's like a little bit of therapy and, you know, it's fine. It's all good.

Yeah, it's killer.

Thanks for hanging out with us, folks. Feedback at BusinessBrain. Tell us what struggles you have like this with your business, because I'd love to learn about it. I'd love to talk about it. We all get to learn when we share our struggles together. And sometimes that's what we do on this show. So check it out. FeedbackUsinessBrain Show. Sign up for our mailing list at BusinessBrain Show. All you gotta do is visit the website. You get to sign up, and we get to keep you informed. We get to stay in touch with each other. We'll see you on Friday.