Episode 21 - The Credit Guy with Tri-Merit's Randy Crabtree

Meet Randy Crabtree, a Certified Public Accountant who started his own firm 15 years ago. Today, his company has achieved a remarkable feat by being among the top 5,000 private companies in Inc. Magazine. However, his success story has not been without its fair share of struggles. When he began his practice in 1991, he took on every client that walked through his door, leading to a heavy workload during tax season and eventual burnout. "My problem was that I was too controlling. I had to touch every tax return we were doing...and when you are doing 1500 tax returns, that's just idiotic," he admits. Randy also realized that his unsustainable work schedule was taking a toll on his family, with his kids starting to feel the effects of his absence during tax season. In this article, we explore how Randy has overcome these challenges and discuss everything from mental health to Twitter hashtags.  Let’s go!

Randy's decision to start something new after his business partner left proved to be a turning point in his career. He saw an opportunity to merge his firm with someone else and create something big, which led to the birth of Tri-Merit - the company he runs today. Initially, the firm focused on R&D tax credits, but as they went through major changes, they realized the wide open field of opportunities in other areas. They decided to support tax preparers and their clients by being an outsourced partner, rather than just taking care of the latter. Over the years, they have expanded their business to specialize in over eight tax credits and incentives, including the ones that came out of the Inflation Reduction Act. They have identified significant tax savings for their clients, with one client saving up to $6 million in taxes through four different opportunities identified by Tri-Merit. Their business model works by having tax preparers identify opportunities, then calling in Tri-Merit to be the expert doing the heavy lifting.

Jackie first asks Randy to weigh in on the Employee Retention Credit controversy.  Randy starts by saying the ERC is the most marketed tax strategy in history.  And this isn’t a good thing!  Because of the popularity and complexity of the strategy, there is a lot of misinformation out there. “People are being told they qualify under all these things that don't qualify you. You’ll hear the question, ‘Oh, did you have to send everybody to work from home?’ Okay, you qualify. That is not a qualifying factor. Or you’ll hear ‘Did you have to wear masks at work?’ You qualify. No, no, no. That does not qualify you.”  Randy emphasizes that many people are getting these tax credits who do not qualify for them.  However, the IRS is cracking down on this and requiring the money to be returned to the government.  

Randy states he has heard that the IRS has developed a criminal investigation unit specifically looking at ERC filings.  He urges everyone to file a 941-X and give the money back. Randy discusses one client who came to them for help:  “We had one come to us after doing an ERC claim. The company that worked with them told them they qualified for six quarters. There are almost no clients that qualify for six quarters. That's the max qualification for the most part. But they ended up having a three and a half million dollar credit.  The Clients had paid a $600,000 fee upfront to the Company doing the filing - which is crazy!  But you know, you see the $3 million, and think, I'm gonna pay $600,000 for my $3 million. I mean, I can see the mindset. You would think it is great.  Then they came to us because they started to doubt it all. They started hearing more information. They started to doubt that this credit was legitimate. We looked at it, and they did qualify, but it was for I think even less than a quarter that they qualified. I think we determined about a $400,000 credit. They already paid $600,000 to this other firm. They've been reaching out to this Provider and it’s been radio silence, nothing. And so unfortunately, they're probably out the $600 grand, and they're going to have to return $2.5 million dollars of credit that is not legitimate this year. So that's a bad one, but unfortunately we're gonna see a lot more of those coming out.” 

Jackie switches gears to ask Randy about #TaxTwitter.  Randy discusses how this hashtag community came about.  “Community in our profession is so important. Relationships, collaboration, knowledge sharing  - all of that is so important. And one of the cool places that that happens is on Twitter with #TaxTwitter.  A couple of years ago there was a group of people who had the idea to turn the #TaxTwitter into a conference. And so after some time of thought and ideas, they actually came up with the #TaxTwitter Retreat.  But I like the fact that they have created this community.  Instead of being 2D or just words on Twitter, it's going to be 3d because we're going get to meet the people that are actively involved in the #TaxTwitter.”

Randy talks about the importance of collaboration in the Tax Advisory community.  He emphasizes that the need is there to create a community of individuals who collaborate and share knowledge.  Each person can contribute their knowledge to the group and create excitement and shared passion. 

“The theme this year is called ‘Bridging the Gap.’ It's bridging the gap between the generations, bridging the gap between pro-software providers or vendors and professionals, because we can all help each other. We don't have to think it's them and us. It's all of us working together. Bridging the gap of diversity, equity, and inclusion. Bridging the gap between a modern firm and a legacy firm and what they are all doing and what they can learn from each other on both sides. Bridging the gap between burnout and a good work-life balance.”

Burnout and mental health are two topics Randy is passionate about.  After suffering a stroke in 2014, Randy began struggling with his own mental health. He’s had an excellent recovery from the stroke, but the fear and anxiety that remained afterwards was taking a huge toll on his mental health.  

“You know, the first couple of months, mentally, I started going down this path of ‘it's gonna happen again. I'm going to have another stroke.’ And anytime I would feel something in my head or anywhere; if I got a little dizzy, if I got a little headache, if I got whatever, that would trigger that thought, ‘I'm about to have another stroke and this time I'm not going to survive.’ It got to the point where it created PTSD, depression, panic attacks, and all of this started happening to me after the stroke. Work didn't cause the stroke.  Work really didn't cause the depression, but work contributed to it because I would think about things in work that I would get stressed out about, and then all of these things would begin to build on top of each other. It was a real struggle.”  

Randy stresses how important it is to deal with your mental health and not hide it.  “A lot of people want to hide it because they think there's a stigma. Whether it's burnout, whether it's depression, they think ‘I'm not gonna let people know because I'm going to look weak or something like that. But the complete opposite is true, at least in my opinion.”  

Jackie discusses her own struggle with mental health.  “I had pretty severe postpartum depression after having my daughter in 2013. And I felt like I lost like half of my brain power. I felt like I had fibromyalgia or something like that. And I became obsessed with trying to figure out what was wrong with me and how to fix myself. At some point you have to let go and move on and say, ‘This is who I am now.  And I'm going to be okay.’ If you just think about what could happen, you spiral out of control. It sounds like that's what happened to you, Randy, as well. And unfortunately with mental health, it's so easy to get caught in that trap. You need people around you that love you and let you know that this isn't healthy.” 

Cognitive enrichment is another component of mental health.  Randy shares some of his favorite books and podcasts.  “The book I am listening to on tape right now, I actually finished it and then started it over again because it was so important to me.  It is Simon Sinek's The Infinite Game.  That book embodies a lot of my philosophy when it comes to our profession. I don't need to maximize tax season billings, let's look at the long term. Let's build a sustainable firm. Let's build an industry where we attract professionals into it, where we attract people at a young age and they realize what a fun, sexy industry accounting and tax is. When I'm listening to this book, it's saying, ‘yes, we can do this.’ We can make this profession be the infinite game, not the not just short term gains.”

Randy also recommends a book by John Garrett titled What’s Your And? “This book is something that I've always used but never had a name for it. It's basically talking to people about what their ‘and’ is. Your ‘and’ is the thing that you love to do when you’re not being a tax advisor.  You may be a mountain biker. That's your passion. That's the thing that you love to do when you're not being the tax advisor. And if people can incorporate their ‘and’ or their outside-of-work passions into their work, whether it's part of the business or just part of the culture that they create around their practice, I think that is so important.”

Randy also enjoys listening to these three podcasts: “Accounting Today”, “Cloud Accounting”, and “Accounting High”.  

If you would like to get in touch with Randy, visit his website: Tri-merit.com 

You can also find him on LinkedIn at Randy Crabtree  

We want to thank Randy for taking the time to be a guest on our podcast!  We believe that every person has a unique message that can positively impact the world. If you are a successful accounting firm, owner or influencer who would like to be on this program, please visit jackiemeyercpa.com to apply. Please share this on social media and rate us so we can continue our good work. Join our Facebook group called Accounting Firm Influencers, or connect with Jackie on most platforms under Jackie Meyer, CPA. Thanks for being accountable to transforming our industry today.