What Happens When the IRS Comes Knocking? - Andrew Brewster

I was taking a business law class in college and the professor was a lawyer who'd been a trial attorney and he was talking about a medical malpractice case that he had and he had like X-ray with like a person like you know a clamp inside their body or something and so he's at the printer shop there just going to trial he's at the printing shop and he's like oh I need to print it out so I can show the jury and they're like how big do you want it and he's like well how big can you make it yeah yeah Bruce I am. Bruce. Hey Andrew how's it going? going great how are you? doing well thank you so much for joining us where are you based out of currently? I live in Virginia just outside Washington DC nice nice okay are you so you're part of the national practice right for doing the global incentives? yeah that's right okay perfect perfect all right so let's talk about so Andrew I like washer career I introduce you to our audience you have a very interesting career where you did your LLM then you went in interned and work at the IRS as well work for like the tax code work for interned for a judge then you spent time at Deloitte and now you're leading incentives at A&M based on all of that I just want to start from the beginning what drew you to tax and like why dad in the first place was it all a supply or did you just come across it did somebody mentor you towards that? so I study accounting in college I did Vita there doing taxes I did the Arthur Andersen Tax Accounting Challenge back then that was a thing and so I went to law school from there took a number of tax classes and my plan at the time was to go to the IRS and I didn't get a job in the IRS right away so I was doing corporate litigation for a little while kept applying to the IRS and my tax experience was getting a more and more stale so that's when I decided to go back to the LLM and in the LLM program I really focused on tax controversy I wanted to controversy so I took every class I could and then moved out to Houston having never having even been there before in my life to get the to get the job I wanted because that was exactly where I wanted to go yeah okay so then a side question what is the Arthur Andersen Challenge why what did you do what do you perform on it Arthur Andersen Tax Accounting Challenge was a college tax competition and you'd be in teams of four and you'd go in and you'd have a tax problem and you'd have your own Arthur Andersen copy of the tax code and you've got like some swag and you just have to like spend I don't remember how long anymore but you'd spend a significant amount of time working as a team to do it so the first year was the my school's first year doing it and I had two of us hadn't even taken tax classes but they were gonna get us ready for the next year and so it was kind you know you can only do so much when you haven't taken tax class yet but the second year we were able to do better and it was it wasn't like there were a lot of rounds so we didn't make it to like we didn't win or anything yeah and now like with yeah you could get it done within like a few minutes right yeah what if taking hours back into there yeah and you get something in a few minutes I don't know done is the right descriptive word okay okay so then why specifically IRS wouldn't it what like stood out about you was it something from a childhood that wanted you to work for that no not really I mean it's just I mean coming from law school the government is you know was at the time anyway viewed as like a very good place to start your career you know spend a few years there then you go somewhere else and like everyone would value value your time there kind of like big four in accounting right you know used to be like job postings we like big four big four and so whatever you're gonna do it's like they're gonna be happy to see big four on it okay so you want it like that brain brand recognition and brand value like yeah and also the completely different than situation then you're gonna be in at you know any other firm right you're saying like there's only different side and seeing how the process works and then so what were you doing once you were doing that the IRS and also like I'm really curious what does the tax code internship look like on a day to day perspective is it just like are you helpful like just summary judgments are you helping that dropped up those judgments what were you spending to do it so the last one I was the judges first intern I was kind of like a cleric light so I had one case that was kind of you know my I mean it's not another market is right it's all the judges case but it was kind of mine to do like just like the the actual clerks would have had to give me like a pretty easy straightforward case and I you know went through volumes of facts and yeah I wrote up you know talking to the judge I wasn't like making the opinion of myself so I did that I worked on some footnotes for some bigger projects where you just sort of side just you know side side quests on on tax law and I you know write some footnotes and yeah I wasn't doing like a lot of like day-to-day drafting just regular orders or yeah and then how would you describe that overall experience would you like say like it set you up for the career or is it like everything you expected was it different I mean I think it did in a way set me up for the career because then kind of on the strength of that internship I got the internship at the IRS the next semester in my LM program and so I was able to you know step right from there into that and then having both those internships and my prior DOJ tax experience you know compliant with all my controversy classwork you know I was I was as good as it gets from a controversy perspective you're going out on the on the job market when you were in college and doing those controversy all of those classes any particular case that stood out to you as like a student you're like this one's really interesting I want to like read more into it or like something that caught your attention while you because there's always a time when I was in college like there was like my college professors can tell me all these stories and I still remember the IBM 10k the first time he showed it to me like yesterday and that's like the first time it hit me that I wanted to walk down I wouldn't say tax I'd say with law I was taking a business law class in college and the professor was a lawyer who'd been a trial attorney and he was talking about a medical malpractice case that he had and he had like x-ray with like a person like you know a clamp inside their body or something it was at the printer shop there it was going to trial he's at the printing shop and he's like oh I need this printed out so I can show the jury and they're like how big do you want it and he's like well how big can you make it and so he has this like walking to the corner of this like huge picture of like super committing evidence and I think I was just like drawn to the fact you know there's in the law there's like all these complicated rules and cases you have to know but there's also like the psychological creative you know things that are going to you can build in and sort of you know you know sort of like you can add your own little your own little twist to it so then did you want it to be a trial attorney at that point too now I've never really wanted to be a trial attorney I guess I guess at the IRS doing like the the tax court or doing the the field office internship was the trial attorney work but then okay now you're at the iris's chief counsel's office what does that experience look like what are you doing and you're like am I going to stay here this is my life now because he didn't stay there so like what change so I was at the IRS I was at a field office they are the ones who litigate in tax court so I was like on the other side you know going through drafting answers going to research writing bankruptcy memos for the department of justice for their bankruptcy tax cases they had and yeah just the way that they hide we're hiring through the honors program and to get into the honors program couldn't have worked before and since I'd worked before I just wasn't eligible so people were like oh you should apply you should apply and I was like I want to and I tried I printed myself and I went to the main office and I said hey I don't think I'm eligible but everyone says I should do it so like in case I am here's my application and they're all okay so yeah if I if I could have stayed there I would that the time but they just weren't hiring and then you got into Deloitte yeah let's talk about that because Deloitte you spent 11 years over there you were in controversy you wanted to do controversy but then you spent the time doing R&D credit why the pivot over there and what could you win what was it about R&D credit is it more like yours there's more ways as he's talked about the medical matter practice the way to show your different positions it's very unique you have to get creative or it was largely life that pulled me out of controversy so I did four years you know during Aristotle I really liked that I went to the national tax office for two years in the controversy practice I was you know consulting with across the country but then my wife worked in politics and DC was gonna be a better place from Houston so I we wanted to stay and there wasn't a local practice in the controversy groups I had to pick a different group so I mean it wasn't all bad because at the time the IRS funding was getting slashed audits were going way down yeah just few rods and in an accounting firm if you're a partner and your client is under audit but your staff don't have enough hours you're not going to call the controversy team you're just going to do it yourself so so you got to be out there selling in the firm and trying to get them to bring you on on the project because you know it's all it's all about revenue and in who's who's doing the work so so it wasn't a terrible time and and like I mentioned before they people really like really like government experience and we were hiring at one point for a senior manager in the in the controversy group and I saw them discussing it's like oh we want someone who's at IRS or ideology attacks it's like they just wanted someone from the government with government experience full stop they didn't want like the homegrown people so and so it's also you know it's like I was going to probably going to be limited somewhat because the client doesn't want to hear if you bring in you know they want to bring it oh yeah Jim was at the at the IRS for 20 years he's going to come in and consult on this project they don't want to hear Andrew he's been a delayed for 20 years they're not going to care about that right okay so they want to so it's like a credibility kind of thing too right you come up from the IRS you've seen it you spend it yeah you get that brand name and then client will respond to that. And in the national tax office, you know, you're there to swoop in and save today. Or take the news ever. Yeah. So interesting side though, but do you know I was reading the XC or comments like his book, uh, his memoir, and he started off as a tax lawyer, where he worked at, uh, work with music companies, the record players to get them are in the credits back in the day. So that was his post for it before he became switched to, uh, rented to trading and then he was a commodity student and made his way up about such a like unique side note that his career. And he said that learning about R&D credit like was really unique as an experience when he began the silk. Yeah, I mean, I don't have a need to be a commodity straighter, but it was a nice transition from controversy because it's really in the day, you know, like most cortex people are just getting frown bounces right there, not getting general ledger detail. So you're really digging in, you have a lot of different data. The data is always coming in different different forms here over a year and you have to just dig through and figure it out. And so the same in controversy. And then it's also highly audited credits. So I think I like to thank my iris, you know, auditing experience helps just to help frame frame the studies and work that idea. Any interesting war stories during that period of time like both the R&D experience like was it exploding during that time where he worked on a particular industry? What was the most fun that you had over there? I don't know that I have any war stories. They'll be especially entertaining. Most of my clients were software clients, you know, it's interesting. I like learning about new technologies people are doing. It was interesting seeing people coming in with like, you know, AR and VR stuff that they were incorporating the products. And now obviously AI is a big thing. It's been kind of interesting seeing sort of progressions technology too. Like when I started doing R&D people were doing data lakes and they were trying to figure out how to, you know, read and write at the same time from this huge databases. And they were spending a lot of time doing that and like doing continuing, you know, continuing, continuing releases on their on their software projects was new. And so you had to like figure it out. Whereas now AWS handles all the database rewriting. So like no one has to have to worry about that anymore. Yeah. Oh, this is interesting because I was just reading about data break. I'm sorry, data breaks and how that team got started. The Apache framework which they had the data lakes, which is a mixture of the data structure and the data lakes and how the open source date for everyone and how they worked upon that. Like took me a second to really understand, I'm like, okay, what exactly is a data lake? And how that is that system structured? Because in my head, I thought it was always just giant databases. I can't answer a lot of follow-up technology questions. I know sort of like about technology, but like, I take up stuff here and there. But yeah, I couldn't describe in great detail. Yeah. What they are. So, so you started off, were you specific to an industry? So were you with like a lot of tech? So you said ARVR, I did both data lakes. Now are you doing? Did you do AI at that time too? Yeah, I mean, we have software clients and whatever they're working on, those are the issues we're talking about. So I know I also had some manufacturing, like heavy manufacturing. And those are, those are different from a study. I mean, maybe a little bit less interesting. I like the software ones a lot. But it's a lot more work to do and manufacturing because they don't have like all the time track. You have to go in and like pull teeth and you know, it's like, oh, you're working on this. Bob over there is working out to go talk to Bob. And he says, oh, yeah, we do this. But like people don't appreciate, you know, it's harder to get a big picture. So you have to really go talk to people. Okay. How do you enjoy your time at NM? How is it different than what you would do previously? I know like NM is like growing in that kind of like becoming the higher they look, more people over the last few years. You've seen that change come around. They're going in that sense too. Yeah, A&M is, yeah, they're hiring people all the time. It's hard to keep track of whatever one's doing because there's just like constantly people coming in. As far as the actual work itself, it's pretty similar. But I mean, I like the people I'm working with a lot and even though Deloitte was like a big company, I wasn't allowed to like work with staff from other offices because then those offices get the revenue. Whereas we're a truly national team and I can like work with any of them. So in some ways, it's actually, even though it's a smaller team, it actually like I have a flexibility because I can just grab whoever is free to work on stuff. Gotcha. Are you building your own team right now? Yeah, we're hiring. We have an intern starting and a new hire starting next week, I think. Yeah. Like what's your philosophy? Like what do you think? Do you follow leadership philosophy as you're like growing more and more into these roles? What do you think? Like how do you become a better leader and growing teams in this industry? I mean, I don't know that I subscribed to a leadership philosophy that I could just articulate. Yeah, I mean, I think it's alright. No, it takes time. I know I see like a bridge between like the older generation and they like get upset when someone leaves and really focus on how it like affects them. Whereas like people are going to leave and I'm not like mad at them for leaving. Now if they just like storm out and don't like you've noticed or anything that might not be as cool, but like I definitely don't expect people to make career decisions based on like based on me. So you know, we've had some people leave to go to different places for whatever reasons and I don't like bear any ill will and some people just R&D doesn't really appeal to them. Some people want a more broad traditional tax experience. And so I think, you know, being able to have people figure out what they like and if there's something they like about R&D or tax, they can like embrace it and just be able to do the part of it that they like on a regular basis. Yeah, I mean, as far as just general leadership, I think, you know, I'm obviously giving people feedback and you know, bringing them into the process. I see a lot of times people cutting out lower level people that like save on hours or whatever, but I really want people in the meetings. I had a client want to feed, you know, they were talking what feed reductions and I was talking to them and I brought in a brand new hire and was like, hey, just listen, you know, this will be interesting for you probably just listen to talk to the client and figure out like whether we should like, you know, how we can handle the finances. And so I, I want people like to see, see what I do because I really want to be replaced. I want to find someone who can do my job and I don't have to worry about it. And then I can, then I can move up and I can go sell more, but I don't want to do, I don't want to do all the, all the work if I can get someone else to do it. Yeah, how much do you think like your time slot right now between working working and working, low-sorry selling and then working on like doing the technical work or do you think in this new paradigm that we are right now where everybody has to work and sell like do you think that role, because there's not truly a salesperson role anymore in this industry or do you think he disagrees? No, no, I agree. And I think that's one of the things that A&M is doing, right? They're pulling people from other firms who have these relationships and then, and then trying to bring, bring the firm in. Yeah, I mean, as far as, I mean, right now, right now, I'm doing a lot of client work just because it's a busy season. But yeah, from a broader perspective over the course of the year, you know, I'm doing spending a significant amount of time doing business development, whether that's talking to existing clients or my old clients or Greenfield. Yeah. As far as selling, I think, and I think, I mean, I think AI and like tax platforms are going to grab a lot of, like the, I say lower end, not in a kind of sending way, but like the smaller ones where, you know, they're not going to hire a big firm. It's not really worth it. And so those people all are going to, and businesses are going to be happy with a more automated approach. It's most last, but, but our clientele is going to still value, you know, relationships and having someone else do it, not have to worry about it or think about it themselves. No, my chance. I want to like pick up on like your ideas, like your relationships, because sometimes there have been like exclusively R&D credit loans, which have borne those clients, have borne those relationships in the clientele. They promised them something and the over-promise and under-delivered and clients have been like skeptical about that. How do you go through that skepticism if you're taking on a new client? I mean, sometimes you don't. I've had prospects where've come in and want to, you know, those mills have been their clients before and they are accustomed to claiming very, very large credits. And we look at the contracts and say, sorry, if you think you know your credit's not going to be as big as them, they don't hire us, but, you know, I don't, those aren't the clients we want anyway. So, so yeah, I mean, I think, and not to say those credit loans, I'm sure they have like some talented people there who are providing good customer service. And they're providing good product in some cases. I know there's a lot of court cases that people lose and, you know, you can say some of them are maybe not good, not the best cases. And so maybe the R&D side of it maybe was ill advised, but. I want to talk about, like, your, what do you think on? So, you've obviously seen iris funding get cut. Their audits have decreased. And they're also taking a lot of not long work to close, but how do you see it from an R&D perspective that you're seeing? Are they coming under most scrutiny, less scrutiny? Do you think they would be more scrutiny in the future with how it shapes up? So, I've heard that actually that they've been pretty aggressive at closing. A lot of cases have been sitting out there for a long time, but that they were still opening up new ones. So, they're, so, and maybe it's just the really old ones they were, they were closing. Yeah, I think it's definitely effects them. I think R&D credits are a big area for them, especially because of cases they've won, they get emboldened. And, you know, they can find some dollars there. They, they feel. I know that they're using AI now too. And so that is another leverage that they have that they can maybe do a lot more with fewer people and fewer resources. So, that's going to be interesting to see how, how that, that plays out. I mean, again, our business model isn't to escape audits. So, you know, if we get audits, that's not the other world for me. I'm used to doing audits. I, you know, I, I'm doing work to, with an eye towards sustaining the work in the audit, so I'm not that concerned about RS activity. Interesting. And then, so talk about that process. Now, if you know they're using AI, so that means they're mostly looking at not a sample size anymore and now they're looking at the most all of it. So how do you think the documentation burden has changed? Well, I mean, just based on the case law, and I don't know how much you know what already credits, the case law in the past has been had some good nuggets for taxpayers. His congress had specifically said there aren't specific documentation requirements. And the IRS has lost cases saying that, you know, they don't, the IRS wanted more contemporaneous document or proof of activities and courts have allowed it. No, this after the fact surveys are okay. So they're kind of getting away from that. And the IRS is winning on arguments that there isn't enough documentation and that the people saying that there was R&D or are biased and you just said self-serving. So, so that's not good. So there's definitely should be more of a focus on documentation. Again, I don't know. I don't even think that's that much related to AI as much as it is just related to the cases. Now, I want to like go retrospective now, like I want to think about like the essay you were back in college again, you're taking your accounting classes and you're about the graduate. What would you tell yourself from your experiences? Like, what did you learn? What would you tell yourself to focus more on? Or what are you left about? Because getting out of some of the listens are getting out of college right now, the graduating going into the corporate world. But what would you tell them or tell yourself at that point? I would say I guess one of the biggest things is cultivate your professional network. I mean, I had people, I had internships, accounting in college. I didn't keep, I didn't keep in touch with those people. I worked with people with the DOJ attacks and I never like contacted them. And so, you know, you can't just like ping them 10 years later and say, hey, I worked for you 10 years, 10 years ago. They're about to remember you. So, so, you know, get on LinkedIn, you know, send people, send people notes every year, just just keep in contact with people. You don't have, you know, you don't have to like hang out with them and invite them to your birthday party or anything. But just cultivate the network and the first day here from you shouldn't be you asking for something. It should be you just saying in touch. And, and then if, you know, and then likewise, when you start, especially if you're starting accounting from a law firm, like the people you work with, it's great working remotely, but you want to get to know those people. Those people are going to hire you in the future. They're going to be your clients. And so, that is a really valuable professional network. I mean, everyone, you know, I know works with clients for the partner, went to, you know, started out in public accounting with the CFO. And so, those are those, you want to be that, that person someday with like connections who work in places that you can hire. Yeah. So what has helped you like both and like your sales journey as you like, you changed from like, doing your work into the sales role, anything like because what I felt like I wasn't getting, there's no sales program that you join when you join the big four, right? So, and you have to cultivate those skills, those marketing skills, and being able to like get close to people. What, what helped you like achieve that? Yeah, it's funny because when I, so I didn't do any sales and controversy. And I was in the national tax office. So we, you know, a new case or guides would come out. I'd write a really detailed, you know, summary of it. And, you know, my boss would read it and make sure I didn't miss any like possible exception. And there was like, you know, all the caveats were there. So when a new R&D thing came out, just after I had joined the R&D practice, my boss was really didn't, didn't sales ask me to like do a summary of it, send a client. I'm like, I do this all the time. I can do this. I wrote like a really detailed one. He's like, oh, no, we can't send this to clients. They want like, here's your opportunity, like all these exceptions and caveats, take those out. Here's the opportunity of just like free ball of points. So, so you're not trying, you're not trying to educate them about, you know, the entirety of the law. They shouldn't go away. Don't feel like they need to go away knowing like every little exception, you know, you're just like sharing a little bit and, and, you know, there's a time for the future to do all the detailed scoping and, and go through all the exceptions, but it's not like at the beginning. Really fun stuff. Okay, one of the questions I always ask, I guess, and it's my favorite ones to know about too. And when you're done with tax, what are you gonna do? What do you, what do you want to do with the rest of your life? Once you're done with tax? Well, assuming I'm ever done with tax, I mean, if my doctor told me I couldn't do tax anymore, and I had to switch careers, I mean, I think I'd like to do like technology consulting. I mean, obviously, AI makes it like a lot easier, but I've always been interested in, you know, using tech to help out with things. And there's a lot of tools out there, even besides AI that I think people have access to and should use more. So I think it would be fun to work with like individual people and like small companies who are trying to automate things and like be better at using the tools are available. So they can really leverage their, you know, what they bring as people to their, to their jobs. Like if you've got only focus, let's say you, you have the Andrew tax consulting LLC, you can only focus on one aspect. What's that one aspect of technology automation you're doing for people? I think use kit that you know better than 99% of people in the world. I would say within like the Microsoft environment, using power query and, you know, in conjunction power BI and SharePoint. Yeah. You can build even as a non tech person, automations and tools that really combine and, and work with data that you probably have available in the company that are just sitting on separate systems. So do you take basically the information from snowflake or tricks or data breaks and bring that in and well, not even that sophisticated. So what I like an example of something I did, we have a time tracking system, right? I can go in and I can pull hours and I can see who charged whatever projects. I can also, we also have like a completely separate spreadsheet that we track our budgeted hours on. So if I need, you know, X staff for 20 hours a week in August, I'll go put it on there so we can, you know, plan our projects, make sure you're going to be profitable and also make sure the staff aren't, you know, are being used. But those are separate systems and it's hard like, it's hard to like combine those two. So I can pull the thing and I have to like sit there and look and it's like, oh, this person charged five hours and I button for 20 like why aren't they working on my projects. So I just made a power query thing. I have to go in and download the time tracking, the time dump, takes me two minutes. I put it in a folder and then I open up a power query spreadsheet and refresh it. It finds the most recent file in that folder, extracts all the data, matches it up with the planning data and then can tell me like a projected profitability for all the projects based on bill hours, bill two date and every budget in the future, which shifts, you know, as the day goes by. And also where everyone's working like the budget, to, you know, budget access for variances. Just like that where it's like, you know, that takes up time and theoretically you do it every week, but like you don't have time to do that every single week. Yeah. So then, okay. So are you the resident power query expert of the team? Yes. I'm the power query advocate. It's a short learning curve. There's some really helpful things you can do. Yeah. I think the danger is like it does so much for like me to sit down and be like, oh, does this and does that and that and over almost people. But if I just like one thing like unpivoting a table, it's like, it takes like a minute to do and then then that's not something that's easy to do just, you know, by hand. No completely agree. Like the first time I caught my hands on Reflit to start building applications. And I spent the entire weekend and I burned through like maybe hundreds and dollars of private and just typing, typing, typing. I'm like, oh, I wanted to all this build this app. I wanted to build that app. And then with that, I had like 10 basically half baked ideas that I was building up. But I'm like, oh, this is powerful. And then now I do that with like quad code, like any time I need to build a website, it takes about five minutes to go ahead and type it up. And I'm there. Yeah. No, completely get that. So, but technology consulting. So one day I look forward to like Andrew, tax consulting with R&D credit. And then you provide them R&D credit on top of it for the tech consulting. You know, I think there is definitely something there, especially with AI implementations. Yeah. So much time across like high level people are doing that. You can capture that time. You can A, you know, check on the, you know, evaluate the AI program better because you have more data and get money back from it. So. Yeah. No, something together. Yeah. Wide word array. And like so much to like explore right now. But this has been great. Learn the lot. We need to have you on. And listen, thank you for all listeners. And thank you so much Andrew. Yeah. Yeah. Yeah. Thank you so much. Okay. Take care.