He has 50 years of financial leadership experience in a broad range of industries including being a licensed certified public accountant. His background stretches across accounting tax manufacturing, construction, information technology, marketing, transportation, logistics, human resources, wholesale distribution, insurance, credit, and more. 

He has held his series seven and 6366 licenses. And one of the most interesting things that I found is he’s one of only 86 people in the last 16 years to pass the US Tax Court, non-attorney practitioners examination, which enables him to represent clients in the US Tax Court without being an attorney.

 

Watch the episode here:

 

Listen to the podcast here:

 

Auto Filings and Auto Payments with Charles Read

 

Brett:

I’m excited about our next guest. He has 50 years of financial leadership experience in a broad range of industries including being a licensed certified public accountant. His background stretches across accounting tax manufacturing, construction, information technology, marketing, transportation, logistics, human resources, wholesale distribution, insurance, credit, and more. He has held his series seven and 6366 licenses. And one of the most interesting things that I found is he’s one of only 86 people in the last 16 years to pass the US Tax Court, non-attorney practitioners examination, which enables him to represent clients in the US Tax Court without being an attorney. Please welcome to the show with, Charles Read, Charles, how are you today?

Charles:

Brett, I’m fine. Glad to be here. Thanks for having me.

Brett:

I want to thank you for your service as a United States Marine, a combat veteran, a veteran of the Vietnam War. And so before our listeners getting to know you for the first time, would you give us a little bit more about your background and your current focus?

Charles:

I grew up in Iowa. I’m a Midwestern boy. After high school, I joined the Marine Corps spend four years including two years overseas in a combat tour, nom, came back was stationed, Ken said he met and married my wife, five children when I married her, I claim insanity. But we were married for 45 years before she passed, I found that my military experience and my training were not valued in the business world. So went to college, got my bachelor’s, my Masters passed my CPA exam, while still in school, went to work for Texas Instruments, spent 15 years working for various companies small and large. Then 30 years ago, Ruth and I, my wife started our own business. Because I was tired of working for other people and realized I was never going to run a major corporation because I didn’t have the political goals. I was unwilling to stab people in back and toss them off the ladder. So we started on a business. And it was payroll and accounting and mobile service. technology changed in the mobile went away. And I sold off the accounting to my partner here about 10 years ago, and focused on payroll, and been growing the payroll heavily ever since. We provide payroll and payroll-related services to small and medium-sized businesses around the country. payroll, Payroll Tax Service compliance, timekeeping workers comp, benefits, other things, but all payroll related.

Brett:

So much there and so many ways that we could go down to different avenues. And by the way, that’s a getpayrol.com, that getpayroll.com to learn more about Charles Read and in the payroll services to help you out. Before we dive into, you know, this really interesting, unique designation you have with representing the ability to represent clients the US task or tax without being an attorney, as well as touching on some capital gains tax deferral things that are happening right now with the Biden administration, proposing some changes. And just the economy in general, we’ll talk about I want to take one other step back, Charles, I believe we’ve all been given certain gifts in this life. And so some people call these strengths are superpowers. I believe their God-given gifts and these gifts he gave to us to be a blessing help to others. So I want you to go back to maybe your high school days or your university days and when you’re a younger, younger lad, what’s the maybe one or two gifts that you believe you were given? And how do they help, how you help him bless people today?

Charles:

Well, this was brought home to me by my staff, I’d done up an interview tape for the survivor, the TV show, and in that they say, one word to describe yourself. Ask my staff, and they all came back unanimously and said, tenacious, I can be like a dog with a bone. I just don’t give up. I just go on and go on and go on. And I’ve been that way all my life. When I was 14, I took a bicycle and from Iowa to California to see my grandmother. Turn 15 on the way so I don’t like to go with things. I just get in. And that’s good for my clients because I don’t let go I had one tax penalty situation that took nine years to solve with the Internal Revenue Service. So from my point of view, tenacity is good. From my wife’s point of view, not so much, but it worked. It worked for me.

Brett:

Absolutely love it. tenacity, it just keeps going. And when you get something you’re going to, you’re going to see it through. Is that a fair summary?

Charles:

Absolutely, he’s chewing on a deal. There’s no bone left.

Brett:

Love it, love it. So now let’s dive right into maybe the biggest secret to being able to, show and pass an exam and be able to provide, representation for clients in the US Tax Court, we’re here at Capital Gains Tax Solutions. And one of the biggest things is want to know is if someone uses the strategy, which we specialize in the Deferred Sales Trust, what happens is if you have to face You know, the IRS or have to face, you know, the US and some kind of legal battle. So, tell us about your experience with the US Tax Court, maybe even the IRS, and some of these things over your years.

Charles:

Well, I fight the IRS on almost a daily basis. We have employment tax situations, which is our specialty. The IRS in fiscal 19, issued over $13 billion in employment tax penalties. And we’re specialists at getting those abated and solved. And in some cases, you have to take those situations to us Tax Court, or disc court, not wanting to be an attorney, I became a US Tax Court practitioner, I studied for it, I decided I was going to become one and I did. That’s, that’s an athlete. So it took a couple of years to study the US Tax Court exam once every two years in November, and in DC at the Tax Court. That’s the only time they give it. They really don’t want us but they’re forced to, in that it’s part of the law that established in the US Tax Court that non-attorneys could practice in it was a holdover from the previous IRS appeals mechanism. So I set for it and pass it here a number of years ago. But it lets me go to the court and present a present an argument and a petition, it’s $60, to file a petition with the US Tax Court. So it’s cheap, you don’t have to spend $5,000 for an attorney on a retainer to file a petition in District Court. So by going to Tax Court with the tax court, you don’t have to pay the taxes upfront. The payment is told deferred until the Tax Court cases are settled. So if you get tight to the wire with pain or losing, you file a petition with the Tax Court, it stops all the collection efforts, then the first thing that happens is it kicks back to docket appeals. So you get a whole nother bite at the apple. And you’re not dealing with the collections people, you’re not dealing with exams, you’re dealing with appeals at a higher level than you normally would. So you get people who are more knowledgeable, more experienced, you’re dealing with a tax counsel for the IRS, and 95% of all US tax court cases are settled pre-court. So you’re probably going to get a better deal than if you’re fighting it out trying to find out with collections or an appeals hearing because they don’t want to go to court. If they lose when they go to court, then a precedent is set. So the hazards of litigation, are in many cases on the IRS not on you. Because you know your maximum liability. The liability that the IRS undertakes may be far, far more than they’re willing to take on.

Brett:

Wow, that’s so enlightening to make sure I encapsulate that for me and for our listeners. So A to file a petition $60 in US Tax Court and versus potentially an attorney $5,000. So the first thing, two once you are guests in this petition stage, you can defer the payments. In other words, you’re moving it out of collections where perhaps they don’t really have the authority, perhaps they’re just there to collect. And now you’re going to actually fight an appeal and you’re gonna defer the payment until the case is solved. Which gets kicked back appeals at a certain point, or maybe during this period of time, which you’re dealing with people who can actually perhaps negotiate or work through this. And 95% of these are solved pre-trial because if they were the IRC is risky, not only your case but a new precedent moving forward, which obviously can be more costly. Is that a fair summary?

Charles:

Fair summary.

Brett:

Wow, that’s really fascinating. And you know, because I think that one of the biggest misconceptions is that we don’t have the leverage. Okay, I say we as the people, and I’m just curious. Perhaps that’s the part of the rewarding part is by using the law and hiring and working with someone like yourself to fight that you can give some of the power back to the people. Is that a fair summary? Or tell us more about that, Charles?

Charles:

Absolutely. This is a mechanism set up where you can, and you can do this yourself, you don’t need me you for $60, there are guides online that you can form your own petition and send it in with the $60. And if you can’t afford the $60, and can prove it the chordal, even waive the $60, you can file Pro Se. But it is a mechanism that you’re going to knowing your maximum liabilities, it’s what the IRS says you owe. So you’re not risking literally anything by going to this, and you, In fact, are getting a whole nother bite at the apple and a substantial chance of getting a reduction and possibly a major reduction or elimination of the tax to collections. They don’t care. Their job is to collect the money. They’re like any other bill collector, they don’t care. That’s not their job, their job is to collect money. They don’t care if you owe it, if it’s wrong, they don’t care. And that’s not their job. And I understand that. When you go back to Tax Court, and it gets kicked back to document appeals, these people will really look at the underlying basis of what’s owed and why it’s owed, or why it’s assumed to be owed. And either affirm or change that. And beyond that, in many cases, they will settle for a lesser amount, just to get the case off their desk and move forward.

Brett:

Excellent, very enlightening. Thank you so much for sharing that. So now let’s kind of shift a little bit into the Capital Gains Tax Arena, you know, the Biden administration is proposing to take capital gains tax rates from 20. To about 39.6. He’s talking about potentially, he’s proposing to, to take away the stepped-up basis, okay, to limit the 1031 exchange to a certain amount per person $500,000, I believe single about a married couple about a million. So of what you can actually defer some nuances there, then the final thing hasn’t been proven. But I’m just curious, let’s just focus on the stepped-up basis, the cap rate being 20 to 40 40. It is intense. But what do you think it would mean, Charles, if the stepped-up basis is taken away?

Charles:

Well, first of all, I cannot believe that he’s going to be able to take away the stepped-up basis for a spot. That’s one thing, I don’t think that’ll happen. On the other. If he takes this away, it takes away the step of basis, that’s going to really change the whole estate planning mechanism. Because you’re now subjecting your a state that you’ve paid taxes on, and you’ve built to another level of taxation. And I don’t know, you know, we’ve talked about this in staff meetings and so on. And I don’t know what the best mechanism will be. We’re gonna have to look at the final bill. And then, of course, a couple of 100,000 of us, accountants will look at it and figure out the best ways to get around it like we always do. These tax they’ve been since I was in college when they redid the state taxes back in 75. It was referred to as the lawyers and accountants Full Employment Act. Because it just guaranteed us jobs. And we’re smarter than Congress in that there are hundreds of 1000s of us that spend months and years trying to find ways around this, instead of writing laws haphazardly, the way the staff does in Congress and not think about the unintended consequences. So we’ll find ways around a lot of it. But one of the things that’s going to happen, and I’m absolutely certain you’re going to see this when the spouse exemption stays. You’re going to have a man marry his grandson. Because his grandson then is a spouse, and he can pass the entire estate without taxes because same-sex marriage is now allowed. So it’s, it’s, there’s gonna be some very interesting things going on with the combination of the changes in the law and the changes in the taxes and the changes in spouses and several everything else. It’s a fascinating time to be alive, I promise you

Brett:

We won’t be able to put the headlines down. You know, that’s true. That’s pretty, pretty amazing to think about. So you pay the tax on it already. Right. For those, as a reminder, a stepped-up basis is when you, when you pass right assets, would get a stepped-up basis at the current market value of which your heirs, potentially even your spouse could sell that asset and walk away capital gains tax-free, right. Whereas now what they’re proposing is to not only when you pass not have a stepped-up basis, but also trigger the tax that’s due, right, and you need to pay that. So it could be an inopportune time to sell, it could mean a number of things. Essentially, what I like about this, Charles, is they want all of the wealth or the majority of the wealth with the government. I mean, this is I mean, it’s I don’t know how else to say it, except they believe that it’s their wealth. It’s not It’s not your family’s? Well, it’s theirs. And they rightfully will be taking that and taking care of it. What do you think, Charles?

Charles:

Well, absolutely. These people are there to spend money, they spend money to get campaign contributions, and favors. If you look at the number of people that are millionaires in Congress, that wasn’t when they joined you, you have Where did they get the money? Where did they get those opportunities to do things? Why are they getting special treatments and special offers and special incentives? And it’s because they can pass tax laws. That’s what they have to sell. That’s their service to business people, to investors to whatever, to people who are willing to fund their campaign contributions. It’s taxpayers, and so they’re dispensed constantly, with earmarks coming back. God only knows what’s going to happen. I mean, no, that was a disgrace, they got rid of it. Now it’s coming back into the Democratic administration. I don’t, I don’t foresee anything good out of this. And with the push for socialism, well, that means that you don’t need that money, we’ll give you what you need. And we’ll take everything else. That’s not how I was raised. That’s not how I believe. You know, rugged individualism and self-determination, all these things with America made America great. And if we no longer own the means, and the output of production, we don’t have anything, if they can just take it from us at their whim. Obviously, gonna quit working. I couldn’t bother.

 

Auto Filings and Auto Payments with Charles Read

Auto Filings and Auto Payments: “If you are not in the process of becoming the person you want to be, you are automatically engaged in becoming the person you don’t want to be.” – Dale Carnegie

 

Brett:

Yeah, I couldn’t agree with you more. And I think the stakes are so high. Another stat that’s kinda interesting for our listeners, and it’s According to the American Bankers Association, there’s about 17 to $20 trillion, it’s gonna pass from one generation to the next to the next 20 years. And this is by the baby boomers. And in fact, the same study found there are about 10,000, baby boomers turning 65 every day. And on top of that, there are about 77 million in the US alone. And so this study of this massive amount of wealth is known as the largest wealth transfer in the history of the planet. And it’s happening right now and over the next 20 years, okay. And the challenge is, a lot of these clients, a lot of these individuals, all these families, feel trapped by the capital gains tax of 30 to 50%. As well as the estate tax, which is set to be 22 million married 12 single sets to cut in half to 12 million, married 6 single, but even I think another proposal, Biden is saying 7 million married three and a half single, or even heard one at three, married in one single, right. So where essentially all of this wealth transfer, when it happens, if it happens, how it happens, because it’s gonna happen because they’re gonna die. And we’re all getting older, we’re all gonna die. And also another part of that stat is 50% of the total net worth of America is tied to high-end primary homes, businesses, private equity, and also commercial real estate. So commercial real estate, for the longest time, we’ve counted on swap your 1031 exchange until you drop and then get a stepped-up basis. They’re talking about taking that away. So essentially, they’re saying, in my mind, look, we have a chance in the next 20 years to take all this wealth, the biggest transfer and move it all over to the government side of things for the special interests for these things, right by eliminating These small things disincentivizing people to create wealth. To me, it’s staggering to think about the transfer of power and influence. What do you think, Charles?

Charles:

No, I’m with you entirely. I grew up in Iowa, as I said, What’s going to happen to the small farms, you know, my family is on farms, they’re in near Iowa City for many, many years. Well, that’s all tied up in the land, you can’t just say, okay, we’re gonna take half the value of the land and give it to the government, we’re just gonna write a check for it, you can’t do that. The only way you can do that is to sell it to somebody else. So it’s going to destroy family farms, small businesses, you know, I, my business is going to my staff. So it’s, but if they pay a huge sum of money to inherit the business for me, are they going to be willing to do that? Are they going to be able to write to be able to go to the bank and say, Hey, we need to borrow X number of millions of dollars to pay the tax bill? And the banks gonna look and say, well, we don’t you know, without Charles, I don’t think you can earn this back. So no matter what happens, and then the government’s still gonna demand their taxes, even though there’s no value. It’s insane. The power transfer to Congress is crazy.

Brett:

Yeah, it’s crazy. So So we believe we do have a cutting-edge solution that’s been around for 25 years. And I kinda want to dive into it, Charles, to see what you think if you’ve heard of it before. But it’s been challenged by the IRS about a dozen times all no change IRS audits. And it’s what’s unique about it, in 1000s, of closes billions under management, and has been a private letter ruling. It’s a perfect track record, it’s an installment sale, it’s based upon IRC 43. It’s called Deferred Sales Trust. And what’s what I think is interesting about it is that a lot of these tax laws that are potentially going into place, or even the stepped-up basis in 1031, exchange, those are all continuity strategies of ownership. So it’s maintaining ownership in something, okay. And then when, when the music stops, and you pass away, you were able to give it or pass it through your living trust to your heirs, and they inherited a stepped-up basis, and such as all ownership, maintaining the ownership, whereas the deferred sales trust our 453 is based upon installment sale. So it’s, you’re actually becoming the bank, you’re lending what you’ve owed to the government. So you say, Hey, Mr. Government, I know this $10 million piece of property, or cryptocurrency or primary home, I bought it for a million, I have this huge tax. So I’m recognizing the gain, but I’m delaying the game like an IRA or 401k, and that I’ve loaned the money to a trust, it’s called a Deferred Sales Trust. And then over time, I take back payments from the trust, and I slowly pay tax, but I can pass it to my kids, and they can step into their my shoes and keep this thing going. So we believe we’ve kind of solved this a Rubik’s Cube for this part, and we’ve aligned for this perfect storm that’s going on, and that we’re not on the ownership side, we’re on the lending side. And these promissory notes can go for as long as you want. And the kids can keep it going, at least our laws are are today unless they take that away. But the point is, it’s one of those solutions there. So I’m curious, have you heard about the deferred sales trust, Charles? And what are your thoughts on it?

Charles:

I’ve only heard of it in passing. It’s not really in my bailiwick. And I think it’s, it’s those things are a good idea. It’s, you know, several 100,000 accountants and lawyers looking at ways to get around it. My biggest concern with that or any tax advantage situation is if it’s used too heavily, the government will step in and change the law. And with socialists in charge, they want to collect as much tax as they can, they don’t care who they get it from. And they’ll change the law on you in a heartbeat. And that’s terrible in itself, are you should have a box to work in and know that as long as you obey the law, you can count on it staying the same. And in this day and age, particularly under Democratic administrations. You can’t. Republicans aren’t much better. I mean, we got a lot of benefits out of the Trump tax changes, but they changed and, you know, rates were lowered and, and things were created and, you know, additional 199, and so on and so forth. But I hate change in tax law because it makes everything uncertain.

Brett:

Yeah, very well. Sad. So, yeah, let’s hope that democratic-republican wherever you are listening to this, that these tax laws and the incentive for business owners, entrepreneurs, people who are creating jobs, that helps to grow and stimulate the American dream, and further production and further, you know, financial freedom. Let’s hope that it goes away. All that being said, Thank you for sharing That Charles. And for those who want to listen, learn more about the capital. The difference especially goes to capitalgainstaxsolutions.com, that’s capitalgainstaxsolutions.com, we got a free ebook for you to download. And you can also go to our YouTube Channel to learn all about how that works. So that being said, we are running low on time. So Charles, are you ready for the lightning round? Knowing what you know now, Charles, if you go back to your 25-year-old self, what’s the one Golden Nugget you would make sure to tell yourself to do?

Charles:

Invest more than to good answer.

 

Brett:

Number two. What’s the number one book you’ve recommended or gift at the most in the past year?

Charles:

Honestly, seriously. The Payroll Book I wrote it myself.

Brett:

The Payroll Book. You wrote it himself, Charles Read, you can find him at getpayroll.com.

 

 

Charles:

Available on Amazon, widely published, and for me last year.

Brett:

Amazing. Question number three, what’s the number one leadership quote or theme that you strive to live by?

Charles:

There are two I use. “There’s no traffic jam on the extra mile. go that extra mile for your clients, because your competition won’t.” And the other one is one I’ve stolen from Bill Gates, who’s a little different at the moment, but it is that “you will overestimate what you can accomplish in a year. And underestimate what you can accomplish in a decade.” So stay the course guys long term.

Brett:

Absolutely love that. I love that. No traffic jam on the extra mile. That’s really good. Second, the last question, what are you most curious about right now?

Charles:

The future? I mean, as we’ve talked about, the so much change going on so many things happening? The old saw the Chinese ancient Chinese curse. May you live in interesting times. We are living in interesting times. And it’s fascinating to watch. People rise people fall, Bill Gates, Fauci, Trump Biden. Yeah, it’s amazing to watch the news. And I don’t watch TV much anymore. But I get it online. It’s a very interesting time. And it’s fascinating to watch.

Brett:

Yeah, well said very well said. Last question. Charles, after helping so many people, build businesses do payroll, representing in US Tax Court, being a CPA? How do you stay centered in your values? And how do you stay encouraged to charge forward to reach new goals?

Charles:

Well, I’m very invested in my staff and my people. People are what makes business work. I love my staff, I love my clients. It’s a great time to be alive in many ways and making the business better. giving my staff growth, personal growth, professional growth, allowing them to achieve and, and to succeed is is is wonderful, you know, my kids are all grown. But I see my staff every day. And you know, they’re not children anymore. But it’s, it’s still from my advanced age, their children to me, so it’s so much fun to be the patriarch of the clan as such, and watch it grow and succeed and have fun doing it.

Brett:

What a beautiful answer and what an amazing story you have. And I want to encourage you, Charles to keep using the gifts that you’ve been given such as being tenacious and, and finding ways to help your staff, your family, your clients, create and preserve more wealth with the tax laws that are on the books now and in so many other ways. And so for our listeners, could you please give them one last time a reminder, they want to get some payroll. Do you want a guy on your side? Who’s been through pilot every situation you could think of? Charles Read is your guy by the way. That’s R E A D. That’s Charles Read and you can go to where Charles where can they find you?

Charles:

getpayroll.com, my email is cjr@getpayroll.com feel free to contact me. 

Brett:

Perfect. Thanks, Charles for being on the show, and also want to thank our listeners for listening to another episode of the Capital Gains Tax Solutions Podcast. As always, we believe most high net worth individuals and those who help them struggle with clarifying their Capital Gains Tax Deferral Options, not having a clear plan is the enemy, and using a proven Tax Deferral Strategy, such as the Deferred Sales Trust, we believe is the best way for you to exit your highly appreciated business. In this cryptocurrency, primary home investment real estate saves a failed 1031 exchange. We’ve done seven deals in the last 40 days alone, including three sales and 31 exchanges. Also, we believe it’s one of the best ways should the body proposal pass to combat one of the biggest challenges which is then stepped up basis which is the estate tax. With those being lowered, as well as just keeping the deferral going if you want to do an exchange on a property you’ve got a capitalgainstaxsolutions.com that’s capitalgainstaxsolutions.com. By the way, we’re also streaming on expertcresecrets.com. So if you’re a real estate professional listening, learn about the term sell stretch to grow your business thanks everyone for again listening in or watching please rate review subscribe. Bye

 

 

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About Charles Read

50 years of financial leadership experience in a broad range of industries, as well as a licensed Certified Public Accountant (CPA). Background stretches across accounting, tax, manufacturing, construction, information technology, marketing, transportation, logistics, human resources, wholesale distribution, insurance, credit, and more. Has held Series 7 and 66 Securities licenses.One of 86 people in the last 16 years to pass the US Tax Court Non-Attorney Practitioners Examination, which enables him to represent clients in the US Tax Court without being an attorney.

A decorated United States Marine Corps sergeant, a combat veteran of the Vietnam War.A twenty-year member of the Rotary Club of Dallas, a member of the club’s Board of Directors, eleven years as Treasurer, and Chairman of the Rotary Club of Dallas Foundation. Currently on the Board of the Veterans Coalition of North Central Texas.

 

 

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