Charles Read with GetPayroll

Intro: Broadcasting live from the Business RadioX studios in Houston, Texas. It’s time for Houston Business Radio. Now, here’s your host.

Trisha Stetzel: Hello, Houston. Trisha Stetzel here bringing you another episode of Houston Business Radio. Beyond the uniform series, I have a very special guest with me today, Mr. Charles J. Read, who is a certified public accountant. I promise it’s going to be a good conversation. Not boring. Right, Charles? Uh, he is also a US Tax Court practitioner, a former member of the Internal Revenue Service Advisory Council, a Vietnam veteran, and the founder of GetPayroll. Charles, welcome to the show.

Charles Read: Trisha, thank you for having me. It’s a pleasure to be with you.

Trisha Stetzel: I’m so excited that we met a few weeks back. I knew that you would be perfect to come on the show. And let’s let’s bring some light to a conversation that some people might avoid or get very nervous about as a business owner. So, Charles, tell me a little bit more about you.

Charles Read: Well, I’m a midwestern boy. Uh, I grew up in Iowa. Um, graduated from high school, joined the United States Marine Corps, spent four years, uh, including two years overseas in combat tours in Vietnam. Came back, was stationed in Kansas City, met and married my wife. She was ten years older than I was and had five children. When I married her. I claim insanity, but we were married for 45 years before she passed, so it worked. In 1972, we moved to Texas, basically been here ever since. And and, you know, pretty much consider myself a Texan now after more than 50 years here. So we I went to work, I did my college. I went to work for Texas Instruments. I worked in the corporate world for 15 years. Large companies, small companies, turnaround startups. Wonderful experience. Realized I was never going to get to the top of a company. I don’t have the political skills. I’m unwilling to stab people in the back and toss them off the ladder, and I have a tendency to speak my mind. So if I was going to run a business, I’m going to have to start my own. Ruth and I started our own business here just a third of a century ago, uh, in 1991, and continued to grow it. I sold off the accounting portion here about a dozen years ago to my partner, and kept the payroll portion, and have continued to grow it to this day.

Trisha Stetzel: I love that it’s beautiful. So you can find Charles Reid, get payroll if you just do a search for him. But we’re going to talk about some more interesting things as we move through our conversation today. So I’ve heard occasionally a business owner will receive an IRS notice. That’s pretty darn scary. So if I received one of those notices, what should I do?

Charles Read: Well, first of all, do not ignore it. I have clients that just put them on the shelf and wait for me. But don’t. Don’t do that.

Trisha Stetzel: Okay.

Charles Read: Open it up. Look at it, read it. Now, if it’s taxes that you owe that you’ve forgotten for some reason, miscalculated. Whatever. Pay them and move on. Um, if it’s taxes you don’t owe and it’s $20, just pay it. It’s. It’s cheaper than fighting it, okay? Discretion is the better part of valor. Don’t don’t don’t don’t don’t fight minimal stuff. We get them from our clients. Sometimes we just pay them because it’s not worth talking to the client about. You know, we send the IRS a check for $7 just to be shut of it. And in all probability, two years later, they’ll get a refund for the $7. Uh. So look at it now, if you don’t owe the taxes, then write the IRS and tell them why you don’t owe them. Okay. Now, understand, the first letter you send will be you’ll get a form letter back saying, no, we’re not going to abate any taxes. They don’t even they don’t even read your first letter. They just send you a form letter back saying no. The second letter, uh, 95% of the time you’ll get a no. They they really don’t read that one. Only the third letter you sent. And this is a series of that. You send them, they’ll send you back. You send them, they’ll send you back on the third letter. You have a reasonable opportunity to get the the penalties abated. Okay. Or the tax is reversed if they’re wrong. Uh, but the IRS is a whole series of no’s followed by a single. Yes. So if the penalty or the taxes are wrong. Appeal appeal appeal appeal appeal appeal appeal and keep doing that until you get a yes.

Charles Read: Because if the IRS makes millions of mistakes every year, the IRS is not perfect by any stretch of the imagination. Don’t ever believe that they make millions of mistakes. Billions of penalties get reversed every year because the IRS is 100,000 civil servants using technology. In some cases, that goes back to the 1960s. Stuff that I worked on when I was in the Marine Corps. Uh, it’s it’s really a lot of problems. They don’t have the budget they’d like to do their civil servants. There’s training problems. There’s all kinds of things, as we all understand with government. So don’t ever think they’re unquestionably right because they’re not so. Appeal. Appeal, appeal, appeal. That’s why I became a US Tax Court practitioner. Because I can take my client’s case to U.S. Tax Court without being an attorney. I operate as a attorney, per se in the US Tax Court. I have a bar card, and I’m able to represent my clients in front of the tax court. And the nice thing about Tax Court is 95% of all tax court cases are settled. Pre-court the IRS at tax court level is very want to settle cases. So it’s a good route to go if you’ve got something that there’s a lot of argument about, you’ll get a settlement offer. So never give up. And one tip for your listeners. The IRS cannot penalize you for a simple mistake. They can only penalize you for gross negligence. The problem, of course, is who defines gross negligence? The IRS thinks they do, but in fact they don’t. The judge does. Okay, so don’t don’t ever give up. Just appeal appeal appeal appeal appeal.

Trisha Stetzel: Okay, so, Charles, everyone needs you on their side. I’m just saying, you have so much knowledge and experience to offer here. I want to back into then why business owners should think about and engage with a payroll company. What’s the benefit?

Charles Read: Well, when I grew up, Pelé was the world’s best soccer player. Wonderful athlete. But if you took Pelé and you put him in the New York Yankees uniform at second base, he’d be lost.

Trisha Stetzel: Yes.

Charles Read: He doesn’t know the playing field, the rules, the, you know, pick up the ball with your hands. It would be a disaster. He’d still be a great athlete. So when you have a a business man or a woman who’s successful produces a service or a product, uh, has employees, has clients, is a growing business. And now you say deal with the IRS. Mhm. They’re playing second base. They’re lost. This is what we do for a living. We live and breathe this stuff. I know it sounds boring, but you know it’s CPAs. What what what can I say. Okay. Uh, we we deal with the IRS daily. We get the trade magazines, we get the IRS updates, we read tax law, we study taxes. You know, we do all these boring things, which we enjoy. Uh, so our clients don’t have to. And on top of that, in doing payroll, we have all the equipment, the software, the facilities, the experience, the banking, relationships, everything to make it simple for us and very, very simple for our clients because they don’t have to go through all the 30 years of of toil and trouble that we’ve gone through to get to that point.

Trisha Stetzel: Yeah, absolutely. And for those of you who are listening and you’re still doing payroll, stop it. It is affordable and you should make it an investment in your business so that you have people like Charles and his team on your side. That’s just the bottom line.

Charles Read: In in reality, a payroll service bureau is a profit center for you, for your for for our clients, we save them more money than we charge them in time, energy, effort, facilities, equipment, software aggravation, tax penalties, everything else. We we’re free. So I mean, you know.

Trisha Stetzel: I love that. I think that’s fantastic. And what a great way to look at it. It is not a cost to your business bottom line right. So if you’re not using a payroll company you should. And Charles is going to tell us about the payroll book which is something very very important. So Charles, let’s talk about this book you wrote.

Charles Read: Well, I looked around here a few years ago to to have something to give to clients, uh, to, to help them and have a reference guide. The only thing out there is the payroll source from the American Payroll Association, and it’s $600. So I said I’ll write something. Well, two years later and and with the help of Wiley and Sons Press, uh, they’re obviously a huge, uh, publishing house. Uh, we produced the Payroll book, a guide for small businesses and startups. I refer to it as 30 Years of Wisdom, distilled down to 95,000 words. Uh, it’s done very well on Amazon. Um, we’ve sold a lot. We’ve given away a lot of them. Uh, it it’s a base for small businesses and startups. I mean, if you’re a 10,000 person company, it’s not for you. But if you’re a small business startup, it gives you a lot of information about payroll taxes, deductions. Who’s an employee? Who’s a contractor? Uh, how to handle aliens? Uh peos. Uh, employee handbooks, overtime taxes, tax penalties, tax forms, states, all these things that are involved in payroll. Because payroll is a very complex subject, when you when you get into it, it’s not just, you know, give the guy, you know, 200 bucks. Uh, that’s the simple part. Everything after that becomes complex. Uh, and whether you have to withhold taxes from that $200 or not. And what do you do with the withholdings afterwards? And where do they go? And what do you deduct from that $200? And, uh, what do you add on top of it and all these other things? So it’s 95, 95,000 words of, of of experience. Uh, lots of horror stories, lots of things not to do. And we’d love to offer it to your listeners if they’d like a copy, if they will go to the payroll book.com and hit the Discount Code podcast, we will ship them a free copy. No shipping, no handling, no cost, uh, to them if they would like to have a copy of the book.

Trisha Stetzel: Wow. Wait, wait. Charles, did you say free? Free? Free.

Charles Read: Free from a CPA?

Trisha Stetzel: Free what? I love that, that’s fantastic. All right, you guys head out to the payroll. Book.com using the code podcast. And you can get your free copy of this amazing 95,000 word ebook that Charles has poured 30 plus years of experience and expertise and stories into. Wow. Thank you. That is amazing. I’m going to go get my copy today. So, Charles, besides the book, we know we need to send people to the payroll. Book.com how else can people get in touch with you to have a conversation?

Charles Read: We’re all over the web at Get payroll.com. My personal email is c j r at Get Payroll. And if they’ve got just something they need a quick answer to. (972) 353-0000.

Trisha Stetzel: Wow. Fantastic. Charles, you’re such a great resource. I’m so glad that you came on the show today. All right, um, let’s dive back in. I know everyone loves taxes. Everyone loves the IRS. Kidding. Not kidding. Um, what’s your advice on or tips to avoid employment tax penalties?

Charles Read: There’s five big things that cause tax penalties, uh, that the employer can avoid. Now, there’s lots of tax penalties the IRS creates from their mistakes and their problems that you can’t avoid. But the five things you can do as an employer. First of all, the biggest source of penalties is arithmetic errors. I mean, people add, subtract, multiply and divide and put the wrong number down. So don’t do it by hand. Use a computer or use a service bureau. Okay, you use us. Don’t. Don’t do it by hand. If you do, use a calculator and double check your numbers, okay. That will eliminate a lot of penalties. The next two things. The next thing is to know what you have to withhold from your employees paycheck. You have federal, state, and in many cases local taxes that you have to withhold. You’ve got to know what those are. If you don’t know, find out. Read my book or call us. We’ll take care of it for you. Then know when you have to deposit those. Because if you deposit one second late, there’s a penalty one second late. And that’s not a simple mistake.

Charles Read: Normally that’s a gross negligence and you’re not going to get out of that penalty. The next thing is know what reports you have to file. Again, it’s knowledge. What gets employers into problems is they don’t know what they don’t know. Again, you have in Texas, you have the the TWC which is state unemployment. You don’t have a state revenue department for income tax withholding outside of Texas. Most states you will deal with two agencies, the the revenue portion where you have pay in the state, income tax withheld, and the unemployment where you pay in the unemployment withheld. In some states, they throw in other things worker’s comp, um, disability, all kinds of things. You’ve got to know what those are so you can withhold them and deposit them. And so you can report them to the state. And then you need to know again when you need to report it. Texas. If you’re a day late with your TWC report, it’s a $50 fine. Even if you owe no taxes, it’s $50 just for being. If you if it’s postmarked a day late, it’s a 50 bucks.

Speaker4: And oh my gosh.

Charles Read: Yeah. You can normally talk to TWC out of it on the first one. But the second one. No.

Trisha Stetzel: Wow. Oh my gosh. So Charles, this is why we need you, right? So that we don’t have to deal with all of the the questions and the ambiguity around these things because you have the answers. You know exactly what needs to be done.

Charles Read: That’s that’s our job. And we work at it very hard. And we keep up with, with all the states and everything else. And it’s, uh, yeah, that’s what we do.

Trisha Stetzel: So if people are listening outside of Texas, they can still call you.

Charles Read: Well, absolutely. We operate in all 50 states. We’re a national service bureau. Uh, and for Texas clients that have employees in other states, which is becoming more and more common. Yes. We’ve gone virtual to a great extent. One of my ladies has worked for us for ten years, got married and lives in Louisiana now, so it’s okay. You know, with technology, it doesn’t really matter so much anymore.

Speaker4: Yeah.

Charles Read: So it’s in many cases you’ve got a good employee and they want to move to Montana. If that job can be operated, you know, on a computer, who cares, right.

Speaker4: Yeah.

Trisha Stetzel: But you need to understand how to be compliant, which is why we need Charles.

Charles Read: And and and there are there are all kinds of nuances of dealing with remote employees in terms of payroll and HR that you need to be aware of and up to speed on. If you’re not, you need to get with somebody who is. Yeah. Us?

Speaker4: Yeah. That’s right.

Trisha Stetzel: Get payroll. Dot com. Okay. Charles, we’ve talked a lot about established businesses or businesses that are in a position where they need to make a decision. They shouldn’t be doing payroll anymore. They need to hire a service. But what about brand new businesses? So if I’m a startup, what do I need to be concerned about to be tax compliant?

Charles Read: Well, first of all, if you incorporate, which I normally recommend as a CPA for tax savings, you’re an employee. If you work in the business, you’ve got to be on payroll. You can’t just take a check every week or month, whatever, or as needed. That’s not acceptable. The IRS will come in and say, part of this is compensation, and you’ve got to pay Social Security and Medicare taxes on it. And since you didn’t, here’s all the penalties and interest on those payments that you didn’t make.

Speaker4: Okay.

Charles Read: And in my book, I have a story about a CPA who just took draws from his business, and the IRS came back in and reclassified half of what he took as compensation. And the penalties and interest were, you know, tens of thousands of dollars plus the taxes. So you you can’t just do it now if you’re if you’re a sole proprietor. Yeah. You can just write checks and everything goes on your 1040 and you pay all your employment tax purposes, uh, at, at when you pay your 1040. That’s an expensive way to go. You will overpay taxes that you don’t need to.

Speaker4: Okay.

Charles Read: Okay. So check with your CPA. Um, but the moment you hire anyone. You need a service bureau. You need a you need a payroll company. Don’t try and do it yourself. It’s not worth it. You don’t know what you don’t know. And this is this is the whole concept. We all outsource things. I, I quit working on my own car when my little milligram needed a clutch replaced. And the book, the Chilton book said. Step number one. Remove the engine. Okay, I quit working on cars. Then I, I, I went and bought two pair of shoes yesterday. I don’t make my own shoes. I don’t make my own clothes. I don’t even mow my own lawn. I’d rather do a tax return than mow the lawn. So I’ll do the tax return and make enough money to pay the guy to do the lawn and then buy dinner too. So we all outsource things. Payroll is one of those things you should always outsource. I always did when I was in business before I started my own company. It’s not worth doing. Don’t be Pele at second base.

Speaker4: Mhm. Yeah.

Trisha Stetzel: Don’t be Pele at second base. Thank you for sharing that story. It really does bring to life, uh, the chaos and disorder that can happen. And the penalties and the IRS letters if you put Pele on second base. Right. I yeah, I love that. Okay. So as we’re moving to the back end of our conversation today, I know it went by so fast. I want to dig back.

Speaker4: Into.

Trisha Stetzel: Your history of being a Vietnam veteran. So you spent four years as a marine? R is there 1 or 2 things that really things that you learned at being in the military that you’ve been able to bring into, whether it was you working in corporate space, working for someone else, or even into your own business? Charles.

Charles Read: Well, as an NCO in the Marine Corps, um, one of the things you’re taught is how the Marine Corps thinks about things. And one of that tenets is mission Min self. You complete the mission regardless of what it takes. The mission comes first. You accomplish the mission, then you take care of your men. Then you take care of yourself. Uh, I’ve seen this, and I’ve seen it from from good officers. Uh, they’re the one of the last of the chow line. Okay. They make sure everybody gets fed before they do. Okay. Um, that translates into business very well, as far as I can tell. Our job is to provide a perfect payroll on time. Every time we bend over backwards. For that, we do whatever it takes to accomplish that for our clients. And then I take care of not only my clients, but my staff. I couldn’t do the business without them. Um, as I retire, they’re going to get the business because they helped me build it. Um, so I take care of my people, and then I worry about myself. If you’re in business, if you can’t pay all the payroll, it’s your payroll that doesn’t get paid, not your employees. It’s it’s. You’ve got to put them ahead of you to be successful. That’s something that translates very well from the military. Now, one that doesn’t is of course, the military is a very hierarchical.

Speaker4: Yes.

Charles Read: Um, operation. And everybody, you either jump for them or they jump for you. Well, thankfully, my wife was very much of a people person and helped break me of those habits.

Speaker4: Uh.

Charles Read: You know, when I, when I had a family with five kids at 21, uh, and the boys were 14 and I was 21, uh, she, she had, she had to teach me to be a, a much better person and, and much less of a marine. Uh, so, uh, and I am eternally grateful that I found and married Ruth. Uh, it was the best thing I ever did in my life.

Speaker4: Mhm.

Trisha Stetzel: I love.

Speaker4: That.

Trisha Stetzel: And Ruth is listening to us right now. I’m sure of it. Yeah. Looking down on all of the amazing things that you do for others. So thank you for sharing that. You know, sometimes those lessons come from things that we shouldn’t be doing. Uh, and it sounds like Ruth helped you with that direction. Wonderful. So, Charles, as we close today, uh, I’d love for you to tell folks how they can get your book again and how they can connect with you if they’d like to learn more.

Charles Read: The book is available, the payroll Book.com enter the Discount Code podcast. We will ship it free of charge. No shipping, no handling. And if you find yourself still confused, my number’s in the book. So feel free. Uh, we’re on the web at Get payroll.com. I’m c.j.r at Get Payroll. That’s my email. And the phone number for the office. (972) 353-0000. The only good thing GT ever did for me.

Trisha Stetzel: I love that, Charles. So he makes it very simple. Can you guys see the incredible opportunity to work with Charles here, where he’s taking things that are really complicated and bringing them down to very simple steps that you can take in order to create some space in your business where you can focus on the things that you should be focused on versus the things that Charles can focus on for you and do an amazing job. Charles, thanks so much for joining me today. I really enjoyed our conversation.

Charles Read: It is my pleasure. Thank you for having me on.

Speaker4: Yeah.

Trisha Stetzel: You bet. Again, guys, you’ll find all of Charles contact information in the show notes. If you happen to be in a place where you can point and click. Otherwise, you have everything verbally. I hope you’ll reach out to Charles. And please take care. Take advantage of the payroll Book.com with podcast as the code so you can get that book from Charles. That’s all the time we have for today’s show. Join us next time for another exciting episode of Houston Business Radio. Until then, stay tuned, stay inspired, and keep thriving in the Houston business community.