Tax Expertise

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Ellis is a tax expert, expert at cutting tax. What other kind is there? We have related expertise in areas that put our tax expertise on steroids: proprietary tax strategies, tax avoidance strategies, biz-re-org strategies & intellectual asset strategies, etc.

Tax Expertise

My career began when I graduated from college with the highest grades and joined a Big 5 accounting firm. From there I entered the corporate world with 2 Fortune 500 companies before founding this practice. During my entire career I have been involved in high level tax decisions at companies as small as a corner drugstore and and large as the largest multinationals.

My staff likewise have high intellect. Bright & capable.

We cut your tax to the legal minimum. Every dollar saved drops straight to the bottom line as another dollar of cash, profits, working capital & competitive advantage.

State Selection Strategies

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Ellis CPA is one of America’s experts in business reorganization, including recommending entity type and state of organization for best asset protection and tax advantage.

Selecting States for Tax & Asset Protection

South Dakota, Wyoming, Nevada, Delaware

These are the best & most popular states to create LLCs & Corporations. It’s a toss-up between Nevada & Delaware for the worst of these four, although they are better than the other 46 states.

We offer Fast Turnaround Time, as do each of the states above. Nor do any of the states have a state income tax, and all states and Ellis guarantee privacy for owners.

Charging Orders
A charging order is a court-authorized right granted to a judgment creditor to attach distributions made from a business entity, such as a limited partnership (LP) or limited liability company (LLC). The debtor will be a member, partner, or the owner of the business entity.  State legislators have granted this right to creditors of LLCs, they prevent creditors of members from taking away membership in the LLC & they prevent creditors from access to LLC  assets. Their only recourse is to put a lien on distributions by the LLC to the member. It’s no unusual that the creditor ends up getting absolutely nothing.

 

At some point, every significant business ends up mixing & matching states & countries to operate in for best tax advantage & asset protection.

Asset Protection Strategies

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Asset protection is a set of legal techniques and a body of statutory and common law dealing with protecting assets of individuals and business entities from civil money judgments. The goal of asset protection planning is to insulate assets from claims of creditors without perjury, fraudulent conveyances or tax evasion. Wikipedia

Ellis has experience & expertise in asset protection. Everything revolves around state law. There are good states; and there are bad states. Some states are good in some circumstances and bad in other circumstances. We work in tax free states that have begun providing corporate & LLC offerings offer outstanding asset protection features.

Protect What’s Yours

Asset protection is comprised of tax planning strategies and legal tools used for protecting assets from lawsuits and claims of creditors. For example, asset protection trusts are some of the most powerful tools that shield wealth from lawsuits. Here is an example of the process.

    • Determine acceptable risk levels.
    • Develop a plan

First, a professional will review your assets, risks and financial goals. Then, the planning process typically includes establishing structures, such as trusts and companies to create legal barriers between creditors and you, as the debtor. The strategies often use a combination of business and estate planning tools.

A properly established plan performs three primary functions: lawsuit deterrence, settlement negotiation leverage and/or placing your assets out of the reach of a litigation. 

 

Geo Politics

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Despite all the domestic commotion, the big story is, the new world order is coming to an end. Just as it started to get comfortable, it became obsolete. New opportunities are arising and new challenges stand in our way. It definitely be tumultuous.

Here’s the bottom line,

The united states will dominate the world for the next century, without the need for NATO to offset the Soviet block. Breton woods is dead  NATO is dead. The new world order is dead. The EU is dead. They don’t realize it yet,  it they are. The U.S. will ignore developments in Europe, Asia and everywhere except North America. The rest of the world faces tough sledding for the next century. What will the world look like is a decade?

As the number one producer of oil & energy, the U.S. has no need or interest in keeping the New World Order in place. We well along pulling our troops and our Navy back home. Already we are calling for Europe & the Middle East to protect themselves and the trade routes they use.  All we need in the way of international trade are are available from our NAFTA neighbors. We don’t need anyone going forward by ourselves.

The outlook for China & Russia doesn’t look so good. Both have demographic issues that will be difficult to overcome.  China will inevitably will collapse into a Balkanized form of their former selves. Without access to cheap energy, the ability to protect their shipping and to hold their far flung nation together, China will soon wither away into a former shadow of themselves.

Due to changing demographics, Russia will soon be unable to mount an army large enough to protect their far flung borders. Inevitably they will lose land to Turkey, Poland & Germany. Their border with all three are indefensible. They will still be a nuclear power, but what good are  nuke’s when the fighting is street to street?

    • U.S has secure borders immune to invasion
    • energy – shale – largest reserves in world – cheapest production costs besides Saudi Arabia, best talent,
    • navigable waterways
    • midwest is the largest farmland area in the world
    • drained by the largest navigable river system in the world
    • largest & strongest navy in the world by far
    • best educated talent in the world
    • best education system
    • breton woods is dead
    • nato is dead
    • old world order is dead

The U.S.’ sudden rise to dominance as the world leader in oil & oil exports is leading to the demise of NATO.  Nor does U.S. any longer have any need or interest in policing the Middle East.  This comes just as European countries start challenging U.S. positions world wide. That probably won’t work out well. It will probably lead to the end of NATO & the New World Order.

The New World Order worked like this. The U.S. protected Europe, Israel & Saudi Arabia and kept the Sea Lanes open in exchange in exchange for resisting Russia and the Communist Block. The Communist Block fell decades. Only open shipping lanes for shipments of oil to the U.S. kept the New World Order together.  Now that the U.S. rise to the top energy exporter in the world, the U.S. has no need for the New World Order.  for not falling into the communist block  & to protect US access to raw materials  We didn’t want anything from them. We just expected them to behave. Today, under the leadership of Germany & Merkel, the European Union & the old World Order appears to be shattering.

The old world order

The new world order

China problems in the transition

Russia problems in the transition

Russia & China. Ultimately, both countries will fade away. In their place Turkey, Japan, UK & Poland will arise. But no country in Europe will ever be dominant. The landscape makes European companies too vulnerable to invasion. Island nations are the safest, and therefore most likely to be world powers

“Geopolitics is ultimately the study of the balance between options and limitations. A country’s geography determines in large part what vulnerabilities it faces and what tools it holds. Countries with flat tracks of land—think Poland or Russia—find building infrastructure easier and so become rich faster, but also find themselves on the receiving end of invasions. This necessitates substantial standing armies, but the very act of attempting to gain a bit of security automatically triggers angst and paranoia in the neighbors. Countries with navigable rivers—France and Argentina being premier examples—start the game with some “infrastructure” already baked in. Such ease of internal transport not only makes these countries socially unified, wealthy, and cosmopolitan, but also more than a touch self-important. They show a distressing habit of becoming overimpressed with themselves—and so tend to overreach. Island nations enjoy security—think the United States, the United Kingdom and Japan—in part because of the physical separation from rivals, but also because they have no choice but to develop navies that help them keep others away from their shores. Armed with such tools, they find themselves actively meddling in the affairs of countries not just within arm’s reach, but half a world away.” Peter Ziehan, The Absent Superpower.

The middle of this map is why the United States is the global superpower, and will remain so long beyond the lives of your grandchildren. The Greater Midwest is the largest and most productive piece of arable land on the planet, out-producing the next two put together. But as important as that sounds (and is!) that’s really the side show. The real deal is the Greater Mississippi River system that perfectly overlays the Midwest. The first rule of geopolitics is that transport matters. Moving things by water is easy—so easy that today the cost of transporting goods by water is one-twelfth that of moving them by road. The Greater Mississippi system has more than 12,000 miles of interconnected waterways—more than the rest of the world put together. So long as this is true, the United States can move goods and grains and people about its system at a cost that seems laughably low compared to the internal transport costs of most countries.

Cities like Baltimore, Chicago, Kansas City, Minneapolis/ St. Paul, Memphis, Mobile, New Orleans, New York, Philadelphia, Pittsburgh, Sacramento, San Francisco, St. Louis and so on, owe not just their existence but also much of their wealth to the cheapness of water transport. All also are, to varying degrees, financial centers. All that cargo throughput requires back-end support in inventorying, repackaging, buying and selling, which in turn requires a 24-hour-a-day ability to process goods and money. As such, cities rooted in water transport almost without exception also have a strong local banking culture. Since those banks were formed to service pre-existing economic needs rather than (geo) political ambitions, American banks also tend to be more measured in their borrowing and lending policies than banks created to serve the needs of the state, such as their peer institutions in Japan, China, Germany, or Greece. Put simply, American banks are independent institutions who see money as an economic good, while many of their foreign peers are little more than tools of state policy. That makes the foreign crowd far better at directing resources to achieve political goals such as maximum employment or infrastructure development or funding the government’s deficit, but the American system is far better at achieving long-term economic stability—ergo it is the United States that holds the title of the world’s financial superpower. Of course waterways aren’t responsible for moving all U.S. goods. In fact, the proportion of water-transported stuff in the United States has been dropping steadily for over a century. The first limiter on American maritime transport is politics. In 1920 Congress passed the Jones Act, which barred any ship from plying the American waterways that was not American-built, American-owned, American-captained, and American-crewed. The idea was to keep America’s maritime jobs with Americans and ensure the United States maintained a strong merchant marine, but like most protectionist measures, it had unwanted side effects. The cost of water transport tripled, shipping shifted wholesale for rail and road (which were no longer so much more expensive than water transport), lower demand for vessels prompted America’s shipyards to fall into disrepair, and nearly a century later most Americans are not even aware that water played (and still plays) such a central role in their country’s success. Washington and the state capitals also lost sight of this fact. America’s maritime infrastructure has been creeping into decay for decades—the average age of the locks is more than 60 years, with many now well over a century old and in need of wholesale replacement. 1

Peter Ziehan

George Friedman, Stratfor

 

 

 

Intellectual Asset Strategies

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To achieve tax and safety goals, we recommend holding all your intangible assets such as trademarks, patent rights, domain names, web sites, company name, trade name, trade secrets, etc. in an LLC or several LLC’s.  By quietly transferring trademarks, patent rights and other intangible assets to offshore or out-of-state companies, global businesses can cut their tax bills dramatically.Intellectual Assets

Recognize & protect your intangible assets.

Most privately owned businesses don’t even know what intangible assets they own. If you ask them, they will inevitably leave some out. Every business should inventory all their intellectual assets. if they aren’t documented, document them. Assign a market value to them.

Why?

Consider this possibility. Your operating company gets sued and you lose a multi-million dollar lawsuit. The next day, you close down that company and incorporate another operating company with a generic name. Then you license all the intangible assets to them, including the business name and start conducting business like nothing happened.

Because, believe it or not, nothing did. Follow our advice and this is possible. 

The best business structure for the chaotic, tumultuous 21st Century is a combination of multiple companies, each serving a particular purpose. Intangible assets, such as patents, copyrights, trade secrets, digital properties & web domains, should be put in an a single purpose LLC where they’ll be safe from lawsuits, and licensed to the operating company.

Here it is.

We protect your business and your vital business assets through business restructuring and intellectual property rights. This approach has the ability to preserve your business and all its vital assets through serious threats to survival.

The Act that made it all possible.

“Today, President Obama signed the Defend Trade Secrets Act of 2016 (“DTSA”) into law, bringing trade secrets alongside trademarks, copyrights and patents as intellectual property rights protected under federal law.” May 23, 2016. This has been tested in a court of law, and it worked.

CFO Services

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A virtual CFO (Chief Financial Officer) is an investment in the growth of your company. As every business grows, something happens. The more they grow, the more background, bureaucratic chores consume your time. If you don’t get control of this trend, it will eventually swamp your business & your dreams along with it. Outsourcing frees your time to focus on achieving key core business goals and planning. We pull the busy work off your plate.

This is why you went into business in the first place instead of just getting a job. We pull the hated, boring, tedious but necessary functions off your hands and give them to people on our staff that love doing it. Believe it or not, there are people who love doing it. You don’t love doing it. You should fire yourself and hire us. That will make us both happy.

In addition, our qualified CFO talent is available for advice & CFO consultation. He or she is a crucial member of your strategy team. 

We have significant experience as CFO with Fortune 500 companies. 

Virtual Chief Financial Officer

CFO is an outsourced service provider offering high skill assistance in financial & administrative requirements of an organization, just like a chief financial officer & his staff do for large organizations.

Ellis experienced CFOs, executives, accountants & tax professionals perform administrative, accounting & payroll functions can help owners, management, and board members solve financial management & operational issues by providing unique guidance and advice. See business services.

You can depend on experienced, high-level professionals to provide the financial insights you need to meet the challenges you face. We provide all the back room services you need; as well as advice, explanations & recommendations.

    • Financial strategy
    • Short & long term forecasting
    • Financial systems strategy & design
    • Budgeting
    • Projections
    • Facilitating & supporting financial reporting
    • Raising capital
    • Interim CFO services
    • Cash flow analysis & restructuring
    • Renegotiating vendor contracts
    • Restructuring client contracts
    • Ensuring pricing is aligned with company & industry trends
    • Analyzing commission structures
    • Supply chain management
    • Attributing costs to revenues
    • Accounting & bookkeeping
    • Payroll
    • Financial Statement
    • Bill pay
    • Collections
    • Data driven management
    • Capture & interpret critical operating data
    • CFO service
    • Streamline & simplify
    • Cash management
    • Remote office
    • Management financial statements
    • Compiled financial statements

Tax Controversy

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Getting Audited

We may be the least audited firm in the country

A convergence of global forces has resulted in a substantial increase in the number and size of tax audits, assessments, and disputes with revenue authorities locally, nationally & worldwide. Virtually no area of tax enforcement has escaped this phenomenon, which includes direct taxes, indirect taxes, penalties, fees & direct  taxes (e.g., VAT and GST, domestic and international) , as well as specialist areas such as customs, tax fraud, and white collar tax issues. This new situation places a premium on audit and dispute prevention techniques because local, national & multinational companies are under constant competitive pressure to structure business operations effectively and efficiently. Larger companies need to develop coordinated approaches to audits and disputes, adopt preventative measures (such as pre-filing rulings and enhanced relationships with certain revenue authorities), and leverage both traditional and new alternative dispute resolution techniques in order to achieve the best possible results.

Knock on wood, we don’t get audited much. We may be the least audited firm in the country. We’ve never had a bad outcome on audit. The last audit we had, three years ago, there were no changes.

If and when you get an audit letter, send it to us and we will handle the entire audit. We may allow the IRS to have an initial interview with you, but that’s it. After that, we won’t allow any contact between you & the IRS. We’ll keep you in the loop and pass on any settlement offers they may make. This approach has always worked well for us and our clients. It’s still the best approach.

 

R&D Tax Credits

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Save hundreds of thousands of dollars annually in state and federal taxes—if you  (1) devote time and resources to creating new or innovative products, improve existing products, develop processes, patents, prototypes, or software & (2) hire designers, software programmers,  engineers, or scientists.

R&D Tax Credits

For years privately owned pass through businesses have ignored this credit because it was typically not productive. But Tax Reform eliminated the personal AMT tax making R&D credit a valuable but overlooked resource. In some states, you can save additional tax on state income tax.

If your business creates new products for resale or improves your own products, you qualify for the R&D tax credit.  Examples include making them lighter, faster, durable, reliable, prettier, precise or less expensive.

Expense Deduction

Costs related to R&D may be eligible to be expensed immediately—even those costs not eligible for the R&D credit. Expenses incurred for software development, equipment used in your business, or other similar expenses are generally capitalized and depreciated over a specified period of time. If eligible as a qualified R&D expense, such costs can be immediately deducted, therefore reducing your overall tax liability in the current year.

Your organization could be eligible for the R&D tax credit if it:

    • Devotes time and resources to creating new or innovative products
    • Improves existing products
    • Develops processes, patents, prototypes, or software
    • Hires designers, engineers, computer programmers or scientists

Additional Tax Savings Opportunities

Payroll Tax
Companies may be able to apply the federal R&D tax credit against payroll tax if they’ve never had gross receipts or have only had gross receipts within the last five years; and if they also have less than $5 million in gross receipts in the current year.

The Four-Part Test

To be eligible for the credit, your R&D activities must meet each of the following IRS criteria, known as the four-part test:

    • Uncertainty. You must demonstrate that you’ve attempted to eliminate uncertainty about the development or improvement of a product of process.
    • Process of experimentation. You must demonstrate—through modeling, simulation, systematic trial and error, or other method—that you’ve evaluated alternatives for achieving the desired result.
    • Technological in nature. The process of experimentation must rely on the hard sciences, such as engineering, physics, chemistry, biology, or computer science.
    • Qualified purpose. The purpose of the research must be to create a new or improved product or process that results in increased performance, function, reliability, or quality.

Which Expenses Qualify?

Many do, including W-2 taxable wages for employees offering direct support and supervision of research, supplies used in research, and certain subcontractor expenses (provided the subcontractor’s tasks would qualify if they were instead being performed by an employee).

R&D tax credits can also be retroactive. Depending on when your tax return was filed, you may be able to claim R&D credits for three prior open tax years. Several other special situations may enable you to take R&D tax credits even further.

Usability Analysis

Rules govern how much credit you can realize in a current year, carry back to prior years, and carry forward to subsequent years. We can help you work within those rules and identify a beneficial credit allocation depending on your company’s specific facts and circumstances.

Outsourcing

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Ellis offers a full menu of outsourcing services, including CFO services.

We bring expertise in the full array of business services to solve your business problems efficiently, effectively &  affordably. The two main reasons that organizations decide to outsource are to reduce costs and to free up the time to focus on achieving your core business goals and planning. We pull the busy work off your plate. 

We are experts at outsourcing. We have been doing it for two decades. We’re experts at every facet of running a businesses in hundreds of trades & professions.

Business Services

    • Business Services
    • Bookkeeping
    • Accounting
    • Payroll
    • Financial strategy
    • Short & long term forecasting
    • Financial systems strategy & design
    • Budgeting
    • Projections
    • Facilitating & supporting financial reporting
    • Raising capital
    • Interim CFO services
    • Cash flow analysis & restructuring
    • Renegotiating vendor contracts
    • Restructuring client contracts
    • Ensuring pricing is aligned with company & industry trends
    • Analyzing commission structures
    • Supply chain management
    • Attributing costs to revenues
    • Accounting & bookkeeping
    • Payroll
    • Financial Statement
    • Bill pay
    • Collections
    • Data driven management
    • Capture & interpret critical operating data
    • CFO service
    • Streamline & simplify
    • Cash management
    • Remote office
    • Management financial statements
    • Compiled financial statements

Business Services consist of all the backroom administrative services that are essential for every business. We take care of everything so you can devote 100% of your time to growing your business and carving your mark on the universe.

Did you know that the data of 25% of U.S. companies is believed to be inaccurate?

We have a reputation for excellent, responsive client service, and for handling all the accounting, payroll & administrative aspects of relatively large companies, including large startups. Startups, especially large startups, move fast and break things that get in their way. They are unique challenges, and we have mastered them.

Doing administrative services poorly can be the kiss of death. We know companies that failed because they did not do a good job of handling administrative functions. We had a client that came to us too late to save them, but they could have easily been saved had they come to us a year earlier. Don’t wait until it’s too late.

 

Tax Avoidance Strategies

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200 million privately owned  businesses pay more tax than the law requires; they pay more tax at higher rates than the Global 500. That’s the nature of the problem. Here is now we solve it.

Tax Avoidance

Every privately-owned business needs better tax professionals. Statistics tell us privately owned businesses pay more tax than then the law requires; & more tax at higher rates than the Global 500.

 

My expertise is simple, cutting your tax to the legal minimum. But if I can’t, I’ll reimburse the difference.  But we’ve never had to do that. We will cut your tax to the legal minimum.  Easily measured concrete results. Every dollar we save drops straight to the bottom line as another dollar of cash, profits, working capital & competitive advantage created out of thin air.

 

The avenue to tax avoidance is far more involved that knowing the tax code inside & out. However, at 77,000 pages, it’s unlikely that anyone knows the code inside & out.  The avenue includes all branches of law, not just the tax code. It also involves every segment of tax law from the IRS Regulations to litigated decisions from Tax court & every other court. 

Then it requires expertise in tax strategy, tax avoidance, tax controversy, business organization, intellectual assets, interstate taxation, international taxation, state selection, nation selection, R&D tax credits, asset protection & geo-politics.

Finally, it requires the intellect to visualize the possible combinations. I am a right brained mensan genius. My background includes a Big 5 accounting firm and two Fortune 500 C suites as well as my private practice.

Judge Learned Hand Famous Quote

“Anyone may so arrange his affairs so that his taxes shall be as low as possible. He is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one’s taxes … Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands.” (Judge Learned Hand)

The problem: The Definitive Study of Human Performance.