Pro Spotlight: Ronald Redd On Industry Experience and How Taxfyle Benefits Him
In this Pro Spotlight feature, Ronald Redd, a Taxfyle Pro from Birmingham, AL, shares his journey into the field and his passion for working with taxes. He discusses how his early exposure to his father's tax and accounting business sparked his interest and led him to prefer tax returns over other part-time jobs. Redd highlights the role of his father as a mentor and his transition to a CPA firm specializing in tax resolution for high-net-worth individuals. He explains his educational background, the process of becoming an enrolled agent, and the importance of industry experience, and his experience as a Taxfyle Pro.
Q: Ronald, how are you doing?
Redd: I’m doing well.
Q: So Ronald, I wanted to get on to understanding how it is that you became a tax practitioner. What were the early starts of your career and why did you decide to pursue that path?
Redd: So early on, my dad had a tax and accounting business. And when I was in high school, I would go prepare will do simple entry for returns for summer money. And it just kind of stuck. I didn't mind pushing a lawnmower, I didn't mind doing hard work, but I much preferred doing tax returns at that point.
Q: When you were at a rather young age, why is it that tax returns drew your interest more than maybe other types of part-time jobs that a high schooler can get during the summer?
Redd: Well, it was easy to get, but it was also a problem. So every time you start a return, it's a problem that has to be solved. And I like to think of myself as a problem solver. And there's always something to learn. And with some of the other industries that I qualified for, at the time, it just made more sense to me.
Q: What was it like filing that first return that you ever did?
Redd: It wasn't too bad, I had a lot to learn. So I originally learned tax returns by learning where they go on the form, and then learning the law behind it. So a lot of it was just data entry at that point. But when I started doing them on my own, and officially being the preparer, you know, it was a great relief, to electronically file the return and get it submitted and accepted.
Q: How did you teach yourself the right way to file a return and how to get the best value for the individuals you're helping?
Redd: So, to start out with, I learned where everything went on the form, and I created a cheat sheet. Everything's a little different, so you have to modify it along the way. And I even taught my mom that way, with the cheat sheet. And then, I started taking continuing education and learning more and more. And I eventually went to school and got my accounting degree. And at this point, the best value that I try to offer is I try to totally understand the client's tax situation, and anything relevant to, their tax situation. And from there, I try to offer insight on what they can do better, or what they can do to prevent tax liability at the end.
Q: And you said that you worked with your father out of his practice early on, how did he encourage you to take you know the next steps and grow within the profession?
Redd: Well, I learned really quickly that I had a lot to learn. And my dad always had time to teach me. And he didn't mind teaching me but he pushed me by saying, “Ronnie, you know, it's time. It's it's time that you're you learn elsewhere, because you're hitting my max.” You know, for time involvement. He didn't mind helping, but you know, he eventually became an attorney. And his time involvement, or his capacity moved more toward the legal side than it did on the tax. So he just needed to focus more, and I needed a more refined approach.
Q: Growing up what was it like having him as a model image of running a tax preparation business and being a tax practitioner?
Redd: A lot of hours, when I first started out full-time, it was probably 16 or 17 years ago. And, you know, I had to earn my stripes within his business and show that I could do it and eventually took over the business. But you know, having somebody there as a constant resource, and at that time, you know, the Internet was around but it wasn't as prevalent as it is today. So a lot of it you have a lot to learn in the industry. You had to learn from somebody, or from publications that you could get from the IRS. So it was nice to have him around as a mentor.
Q: How are you encouraged to grow within the industry?
Redd: Well, there's always something new to learn. And when I left working with my dad in 2015, I'd gotten my enrolled agent certification, and the growth, from that point, just kind of hit a stage where it's like pouring gasoline on a fire. I went to a CPA firm, and I went from dealing with my dad's set of clients, which eventually became my clients, too, which were more of the common job. And then I went to almost exclusively business and high net worth individuals.
Q: And how did you find your specialty within the industry?
Redd: Well, before I left, working with my parents, and once I went to the CPA firm, I had my enrolled agents certification, and we dealt a lot with tax resolution. So with my dad, we had our methods to get the tax resolved. And then stepping into the CPA firm, at the firm, I was at, if you knew too much on one subject, they considered you a guru. So anything that came up in that area, you automatically got, and pretty much whenever a tax notice came in, it came on my desk. So that's what really propelled me into more of my niche. Tax resolution, high net worth individuals and businesses.
Q: So to circle back where did you go to college What did you study and then later on why is it that you pursued an EA license?
Redd: So I went to the University of Alabama at Birmingham, got my Bachelor of Science in accounting, with a concentration in business honors, the honors portion was a leadership study. And what pushed me into getting my enrolled agent certification is, I felt like I was maxing out. There were things that I just couldn't do within the IRS. And a lot of it's making decisions. So before you're an enrolled agent, a CPA, or an attorney, you have to use form 8821, which is a disclosure information statement. So they can disclose information to you, but you can't make any changes. And at that point, I was doing more resolution work. And I needed something to set myself apart so that I could make those decisions on behalf of the client. So it kind of propelled me there.
Q: How does someone become an IRS enrolled agent?
Redd: There's a multipart exam that you have to take, [a] special enrollment examination. I'll be honest, I thought it was kind of easy. But I'd also been in the field for around 10 years at that point. So it's really just studying and taking the tests.
Q: How helpful was having that industry experience before you were into taking the test?
Redd: Very valuable. A lot of the basic concepts I already knew and understood. So I didn't have to dig deeper into the framework because it was already there in my mind.
Q: What are the kinds of questions that they're asking you on that test?
Redd: Well, they go through, and they do sample problems for dispositions and liquidations on the business side, and then there is an ethics portion where they go through. And a lot of it's similar to the due diligence that's done with the child tax credit, or even some of the other credits. But it also has to do with representation where your line is drawn and the things you're allowed to do and not allowed to do when representing a client. And the individual portion of it, a lot of it was just general application. So not necessarily where things go, but how they apply. And the basic law behind it.
Q: And what kind of continuing education is required of an enrolled agent?
Redd: It's 24 hours of CPE each year, and you have to have 72 hours within the three-year window that your license is good for. So every three years I have to renew with 72 hours.
Q: What do you usually do to maintain those education credits?
Redd: So I go to local seminars, there's the Alabama Society of Enrolled Agents. I usually pick up the spring seminar, and then I do a lot, and there's a few websites out there where you can pick up free CPE.
Q: Is there anything when you're doing CPE that you tend to gravitate toward? Whether it's because it interests you or you are just discovering it for the first time or want to get a better grasp of it?
Redd: Tax laws are always changing so tax updates are a big, a big item to focus on. And then I focus a lot in new areas because I always want to expand my field of practice. Some things, it's just hard to get a lot out of within an hour when you go into liquidations of businesses, there's only so much they can do in an hour, they can give you an overview, but not too entailed. That's when some of the in-person helps out a lot because I can get a lot more detailed. But I try to expand my focus each year, and I don't want to be too broad in my practice, because I still would like to focus mainly in business and high net-worth individuals and tax resolution. But inside high net-worth individuals, there's a lot of a lot of areas that come into play.
Q: What's something new that you've learned through your CPE credits that you feel has elevated your ability to assist people with any of their tax needs?
Redd: The representation process. It seems fairly simple. And there's a lot of notices and the timing, and then statute expiration dates, those definitely will help, especially on the collection side, if you're trying to time out an installment agreement.
Q: Have you ever represented someone in front of the IRS? What is that like?
Redd: Yes. Well, you know, these days, they don't do many in-person audits, they're very rare. Even though there's talks of bringing it back up to pre-pandemic levels, it can be a process of dealing with the IRS, you have to have a lot of patience, because nothing goes quickly, they're hard to get on the phone. And a lot of the time the only time they get in a real hurry is when when you owe them major money, and they want it now, or if there's direct harm to the tax payer.
Q: What is it usually like from start to finish when you have a client that needs help because the IRS is knocking on their door and Ronald's the only one that can save them?
Redd: Well, so I normally try to get a power of attorney and figure out exactly what's going on with the totality of the situation so I can determine what all needs to be done. And then comes a secondary consultation because a lot of the time the clients aren't aware of the whole situation in the original consultation. And then we start to focus on filing the returns and then debt resolution. And the debt resolution can sometimes drag out for a while.
Q: So what are some of the benefits that you gain from having your enrolled agent credential?
Redd: When I stepped into the firm, it's a regional firm here in the Birmingham area, I was able to do the same thing with the IRS that the partners of the firm were able to do. And at my level, I was a staff accountant and a senior staff accountant, there was nobody at my level that could contact and make changes and do things for clients with IRS. So I got a lot of the same work and it provided me a little bit better ability to take steps forward at the firm, get more knowledge deal with more things.
Q: How do you compare and contrast having an EAA license versus people that have CPA licenses?
Redd: Well, an enrolled agent is specifically for the IRS. I've actually wanted to pursue my CPA [license], I just, honestly, I haven't had time. But you know, I'll be honest, going through the industry, if you're going to work with financials, and prepare them yourself, you have to be a CPA. You're not able to do that as an enrolled agent. But with the proper training, it's kind of a lateral moves, if you're just dealing with the IRS.
Q: Why is it beneficial for individuals and small businesses to consult with an enrolled agent when they're filing their taxes?
Redd: Liability reduction and preparation, just general preparation a lot of the time. There can be just small things that will throw off the entire return. Now with businesses, there's a balance, for at least the corporate returns. And that balance can be hard to find if you don't know what you're doing. And on the personal side. You know, picking up a W-2 may seem pretty simple. But then down in box 14, they'll throw you some crazy information. And then sometimes there's errors in the W-2s. There can be a lot of things that go on, especially when there's human interaction. And when you get an enrolled agent, someone that sees them and understands, they can pick up on the things that need to be done. And if there's any errors in the preparation. It's not common that there's errors, but sometimes it does happen.
Q: When did you first hear about Taxfyle?
Redd: I heard about Taxfyle in the end of 2021, and it, it heightened my interest. And then when I came out of corporate accounting, I contacted Taxfyle and got on board in 2022.
Q: Why do you think that Taxfyle is a good fit for your current career and financial goals?
Redd: Well it adds flexibility to my situation. So I can pick up returns and not have to worry about that overhead and go in to get them. And I can focus my advertising dollars in other areas.
Q: How do you balance being a Taxfyle Pro while running your own practice?
Redd: Well, I work very long hours during tax season. And that's by choice. I take on as much as I'm able to do within a week. Typically, it's 24 hours to contact the client and five days to complete the return. If I can't get it done within the week that I pick it up, I just try not to pick it up, or at least not get a good start to it. At my office now, there are people there that answer the door and answer the phone. So I have a little bit more leeway there.
There's definitely a balance. And sometimes it can be a little blurred. If I have too many people coming through the door, I can just step back from the Taxfyle and not take on as many [clients].
Q: How valuable is it having that degree of flexibility in your life?
Redd: It's very valuable, because sometimes you can't predict who's going to come through the door. I mean, ultimately, you want a returning client. And in both areas, you can have those returning clients. But with a physical business, you know, it's hard to put a flag up that says “Hey, I'm not accepting anybody right now.” Because you know, you always want people to come through the door. And with Taxfyle, you can put the flag up, and they'll move it on to the next person, or you won’t be presented opportunities.
Q: For enrolled agents like yourself, why do you think they can benefit from what Taxfyle offers?
Redd: [It] gives them the ability to pick up work without the advertising spend of course, but it also gives you a chance to grow. I’m in a couple of outsourcing opportunities. And I've dealt with several software packages before, but you know, I was a little rusty and it definitely gave me some time to fine-tune the skills again. And working inside Taxfyle, if your area of practice has been quite limited. You have an opportunity to expand your knowledge with new returns and new opportunities.
Q: How does Taxfyle help you be a little bit more financially flexible?
Redd: You know what to expect. If you complete a job, you know when the money's coming in. When you do it in person or inside the regular business, sometimes collections can be an issue. So with Taxfyle, it's more of a steady source through tax season rather than fluctuations.
Q: How do you like to decompress from the tax season once it's over?
Redd: So I love to canoe, kayak, and generally be outdoors. Because during tax season, I don't get that much.
Q: Where are some of your favorite places in Alabama that you like to go out and immerse yourself in nature?
Redd: There's the Talladega National Forest, which has the highest point in Alabama, Mount Cheaha, and I live on the Cahaba River. That's one of my favorite spots as well. And then there are several lakes in the area. And then when I can, I love to make it to the beach down in Gulf Shores to go do some scuba diving.
Q: How did you first get started you know, enjoying the outdoors and being you know part of nature?
Redd: So it started at a young age. I was in Cub Scouts for a little while, and we always had a patch of woods behind our house. I live in a suburban area, and that's not always readily available. But behind our house and in our neighborhood there were a lot of patches of woods and I just loved being in the woods. We started walking the creeks at a young age and now with my son will walk the river.
Q: What do you feel like whenever you're out in the outdoors?
Redd: It brings me peace and calm, and it's definitely a nice release to get out of my little cave from doing taxes.
Q: How often do you usually get out other than the outdoors?
Redd: I try to go every weekend, if not more frequently.
Q: Is there anything else that you'd like to do to help you decompress and you know find that right balance in your life between work and enjoyment?
Redd: Being outdoors is the big thing. I do like to work with my hands. I am very much introductory, but I've recently gotten into woodworking. So that's fun.
Q: What have you made?
Redd: I was working on a table, and I've got a bench that I made. Nothing too spectacular though. I'm definitely still on the perfection or getting better stage.
Q: Is there anything that I may not have asked you that you think is important that people know about yourself?
Redd: I think ultimately relying on a Tax Professional gives you the benefit of their knowledge and their years of experience to reduce or ultimately prepare for, for upcoming liabilities that aren't always so easy to see. Whether it's an enrolled agent, a CPA, or even some attorneys, it's always good to talk to a Pro first. And sometimes you don't necessarily need one. There are places where you can do it yourself. But you find that a lot of people see the refund meter and just say “I need a bigger refund,” which ends up with a tax notice. And a lot of the industry is you never want your client to get a tax notice. They're not always good sometimes they are but rarely but definitely consult with a Pro first.
Q: Being an enrolled agent, you have a high degree of specialization in tax. How is that specialization for yourself beneficial when you're picking up jobs on Taxfyle?
Redd: Well just expertise itself. When I pick up a job, I can tell what's in it. And you know, I tend to follow my niche with business returns. And it's not always so easy to tell if it's a high net-worth individual or not. You can usually look at it and tell but just from years of experience looking at the job details you can get a good pretty good picture of what's coming up and if you want to expand your knowledge you can.