Tax Law & Softball with Dean Blachford

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So check them out, they're linked in the podcast description. Thank you very much. Hello and welcome to the Big Four Transparency podcast. I'm joined today by Dean Blatchford, the founder of Blatchford Tax Law and the first lawyer that we've had on the pod actually. Welcome to the pod, Dean. Hey, thanks so much for having me, Don. Yeah, my pleasure. So I mean to start off, can you talk us through some of the differences of being like a tax lawyer versus like a CPA working in the tax world? Sure, I'm not a CPA so I can't tell you too much about about that but I gather your audience knows. But as a tax lawyer, so I'm trained in the Income Tax Act and the Excise Tax Act and I'm a tax dispute lawyer. So there's kind of two types of tax lawyers. One's a tax planner, they're helping you execute reorgs and state plans and pipelines and those types of things. And there's people who do disputes. Some people try and do both. I specialize a hundred percent in tax dispute resolution. So I'm the person that you call in when there's a nasty audit and I advocate for your client working with you at the audit stage, the objection stage, and if necessary, the tax court stage. Okay, interesting. Because yeah, I worked in tax for quite a while for three years and that's how I actually got to know you. And yeah, that did happen a couple times where it was like, yeah, suddenly this project I've been working on got a little bit too hairy and it was off my plate. And so my understanding is at that point it's on your plate basically, right? Yeah, that's right. And we like to work closely with accountants, but it's what we specialize in. I started at the tax court, so I've seen what these files look like and it's been 10 years now where that's what we're doing a hundred percent of the time. So we do feel like we add value, we mitigate risk both for the client and for the CPA and it gets a hundred percent of our attention, right? We're not getting pulled off because it's tax season or there's some other demand. We're really kind of niche and specialized. Yeah. I'm a huge believer in having more niche practitioners on a file. I think that just generally leads to better outcome for everyone. And again, first of all, I would not be authorized to, but if ever I got asked to come into a dispute, the amount of background that you would have to pick up on is just absolutely outrageous. And even if it doesn't make it to the court, if you're just dealing with dispute after dispute after dispute, I think you start to gain an understanding of what usually gets the job done, right? And what gets this thing kind of buttoned up. So yeah, that's right. There's a lot of like kind of, I guess it's institutional knowledge that you acquire over years from doing this every day for sure. Yeah. Are there certain like cases that tend to end up kind of in dispute or in the court specifically, like more often than others? Sure. Yeah. So, I mean, there's a few types that, and they go through kind of trends, but net worth audits. I'm not sure if you know what those are, but those are like a nasty type of audit that CRA does to target the underground economy. So that's a common one that we see. We're working on those all the time. They'll use them against contractors in the construction industry. They'll use them against restaurants. Property flipping assessments right now are huge. We're getting a ton of those out of Vancouver and Toronto where people built houses, maybe tore down a house and built a house during the big boom, kind of the real estate hot market. And they sold it and didn't report any tax on it, HST or GST or income tax because it was their principal residence. CRA comes in and says, actually, we think that was a business. So we're going to hit you with HST and income tax. Those are huge assessments. And we're seeing, we're getting calls on those all the time as well. Denied input tax credits is another one because business owners don't know how stringent the law is when it comes to proving an ITC. So that's another type of one that we see often as well. And then there's a smattering of other types as well. Interesting. Are those net worth audits, is that basically like an accusation that the people are like underreporting on income kind of thing? That's right. And CRA, they'll typically do it to a business, say a corporation, say a restaurant, and they'll go in and they'll essentially go through the restaurant and will say, we don't believe your corporate books and records are reliable. We'll go through the corporation to your personal bank accounts. And they track everything out of your personal bank accounts, all your personal assets as well. You, your partner, if you have a spouse living in the house, they'll look at both. And then they kind of plug all these numbers into an Excel spreadsheet and numbers pop out that you owe X, Y, or Z. And we're talking like hundreds of thousands, if not millions of dollars that these things can turn up. They're very complicated. CRA will spend 200 hours, 300 hours at the audit stage performing one of these audits. So they're very messy. They take a lot of work. And so it's become a specialization of ours over the past many years. Interesting. I cannot imagine being subject to that because, yeah, you essentially have to prove that something that you're saying never happened did in fact never happen, which is a lot harder, right? Like it's not just that there's going to be a receipt or something like that. No, that's right. That's right. The burden of proof is on you, on you as the taxpayer. And yeah, you're right. You're having to prove a negative. You're having to prove that you didn't have unreported income. It's very complicated. Okay. Interesting. And so you've been a solo practitioner now or not quite a solo practitioner, but you've been running your own practice for a number of years now. And beforehand you were, I believe with Haslow Law and somewhere else before that, what was kind of your journey to being able to move towards kind of running your own practice? Sure. So I, um, I came out of the tax court when I was at the tax court. I knew I was interested in litigation. I love my time there. Um, and I knew I wanted to be in a small firm where I was, I was advocating for, you know, business owners. My parents were small business owners. I wanted to be, um, kind of like rolling up my sleeves and working with other business owners. So I went to a small firm for a couple of years. Then I got recruited by Haslow. And at the time Haslow had this, had this very senior tax litigator there named Robert McMechen. And he had literally written the book on like tax court. Like he had written the book that analyzed the rules. And so he recruited me over with his, with this guy who's the head of Haslow. And they were going to have me come and join Robert and be kind of his, his second chair, as we call it in litigation. And, um, and so I, I, I resigned, I took this contract. There was about two months in between. I had a young kid at home and, um, I was on my way over there and, and, and Mr. McMechen had a stroke and passed away like, like that. So I went from going over there to be a second chair, to essentially taking over his practice. Uh, I was, you know, three, four years out of law school and, uh, it was, it was heavy. It was a very heavy time, obviously for the firm, um, communicating with clients for the first time, like explaining this to them. So it was, uh, it was a big deal. It was very stressful. Uh, you know, a lot of kind of like self-doubt, imposter complex, et cetera. Um, but thankfully this guy was just like, he was just in my corner all the time and, and really supportive and, and, and he wasn't a tax expert at all, but he, he's a super confident guy himself. And he, he, he kind of breathed that confidence into me and slowly, like one file at a time, you start having successes, you start having more successes. And, you know, one thing I've realized about law is so much of it comes down to being really organized, communicating with people well, and, and, and having attention, like a keen attention to detail. And if you can do those three things really well, then the rest of it can kind of fall into place. So I, I worked these files and eventually got my confidence up and now new files are coming in and, and kind of off we go. Uh, yeah, yeah. So I did that. I was with OOG for five years at Haslo Law during that time. Um, Ella Suey, who's my, my law clerk came and joined me and, and her and I kind of hit it off right from the outset. She's a real hustler. And so about, you know, then COVID comes and we're working from home. I'm not going into the office. I'm realizing I've got a bit of, um, I've got a bit of a positive reputation in the community. I'm starting to get files from Toronto and Vancouver. And, uh, and so eventually I, I started studying and researching this idea of going out on our own and studied for a few months and, uh, and felt like it was viable and then brought Ella in and we planned the thing and rolled it out. It took us about, I would say about 10 months of really like detailed planning. And then we went for it. Wow. I love hearing people who just kind of like, just make it work through like sheer force of will. Like, it sounds like kind of both yourself and OOG, like that was kind of the case where it was like, listen, we're in a tough spot. Uh, this, this could work out fine, but it's going to take a lot. Um, what were those times? Like, like, did you have people you could kind of turn to for support given that you didn't have that coach or like, was it just a lot of independent study to try and, you know, get up to speed or what, what did that look like? Yeah. A lot of, a lot of independent study. There's not a ton of tax, uh, litigators out there. So, um, so I was like, I made relationships with people in Vancouver. I made relationships with tax dispute people in, in Hamilton. I have a really close, uh, friend there now. And I just kind of cold called him. And so I really had to reach out to build these relationships because yeah, they're not everywhere. Um, and then on, on more of like the business development, client relations, practice management side of things, who was the person that, um, that advised me on that, on that type of thing. So, but it was, and on the actual nitty gritty, it was just a lot of yeah. Self-study and really digging into files. That's awesome. And so the outreach to these people that like helped you through, that was literally, you're just like picking up the phone and calling them. Yeah. Yeah. I mean, I guess I get that from my parents, but I have no problem calling people. I tend to do it more with people. I mean, there's not a lot of us here in Ottawa anyways, but I tend to do it more with people who are, who are in different cities because then I'm, I'm not seen as a threat, but I, I now have like really strong relationships with several tax lawyers in Toronto whom I really respect. And like I said, a good one in Vancouver as well. Um, and yeah, I've gotten over the years, just immense, immense value from, from building those relationships. That's awesome. No, I, I tell people a lot, like I was just joking with someone the other day where they were like, Oh, how'd you get this person on the pod? And I'm like, Hey man, like the world has no rules. Like you can just like, you can reach out to people and you can follow up kind of like as much as you see fit. And you know, once they tell you to go away, like that, that's probably harassment if you keep going, but like until then, like, there's truly, truly nothing stopping you from getting in touch with these people. And, um, the way I recommend it is like, make sure that you aren't just like, Hey, can I pick your brain or something non-specific like that? Cause I find a lot of people fall into that trap. And like, you know, like I, I haven't made it in a tremendously big way yet where I should get as many messages as I do, but I get a lot of just like, Hey, like, like what you're doing, would love to chat versus some people go, Hey, I'm trying to figure out my career. I want to understand this, this and that, like you made this transition from tax to FPNA to entrepreneurship. And that's something that I envision I would like to understand. And so like the more specific you are with the ask, I think that that like becomes a much higher rate of success with the people that you're trying to get in touch with. But I love seeing, seeing you say that that worked for you. And you're essentially saying like, I'm trying to get into the same space as you, right? So that's not an easy ask. No, no, you're right. You're right. So again, the distance helped for me a bit. One thing I would, I fully agree with you, this specificity and also some sort of indication that like, you've looked at this person and they're uniquely positioned to respond to this question. So like showing that they've done your research on you, I think, again, it heightens the probability of success that they're going to get a response from, from someone like you. And I'm starting to see those letters comes in, you know, even a cover letter, you can tell right away whether whether that cover letter is designed for our firm or it's generic. And that makes a big difference as to whether or not I'm going to take the time to, to respond to something like that. Yeah, 100%. So yeah, good on you to do that. And good on them too, for like, you know, there's a difference in mindset there where I think when there's a shortage of people in an industry, it's easier to have like a, an abundance mindset, right? Like I hear a lot about new firms who tell me about how like, you know, a lot of their early client base was referred to some other firm in their local or by some other firm in their local market. And I think that that's pretty incredible that, you know, some of the people at least are able to kind of get over that hurdle and say, like, listen, I'm turning away work like it's nothing. It's nothing for me to like actually substantially change this person's business and or life by just setting out kind of, you know, a little bit of support for them. And I just hope that people who who are beneficiaries of this support kind of learn to pay it forward. And that's been my experience too, is like some of the people in the most desirable spots have been the most willing to kind of help out because they feel like they got supported on their way up and that they're trying to pay it forward now, which is tremendous. Yeah, I agree. Yeah. So again, haven't worked with you directly on any kind of tax law, but you do have a local reputation in Ottawa, like you're very well regarded and I'm sure you're very good at that. But something that people maybe don't know as much is that I think you're a genius marketer as well. And so we'll talk about the baseball game that you do that this just occurred, I was able to swing by, I was still employed at the time. And so I wasn't able to make it for the whole time. But next year, I'll be out on my own. So I should be able to to participate a little bit more. But you do this event where it's a charity event. And it's a baseball match. And it's for basically all of the accountants in the region. Can you kind of talk me through how this kind of came to be? Sure, sure. So, you know, I'm in Ottawa, but I'm not from Ottawa. I'm from Vancouver. And so I came here for the tax court. And then my partner got a job and it was their dream job. So we're staying here. But you know, I've got when I when I leave that first firm and go to Haslow, I don't know anybody. So it emboldened me to to to reach out to people and start building relationships. So I thought, you know, I play softball in like a beer league. And so I thought, okay, like, maybe maybe this would be an avenue. So I, the first year, it wasn't it hadn't, we hadn't conceived of the charity game yet. The first year, I just called a bunch of accounting firms, and tracked down people who played and I entered a team into a tournament. And so we, you know, cobbled together like 10 people. And maybe I had a few friends that weren't accountants, we probably had like seven accountants on the team. And we went into this tournament. And we we we just got thumped the whole weekend. We didn't win a game, we got beat multiple times, people, these guys are showing up, men, co-ed tournament, people are showing up with like full jerseys, every every person has their own baseball bat of their preference, you know, these 400 and $500 bats and stuff. And we just, we just got demolished. So I came back, but but I met great people, like really, really great accountants who I never would have met otherwise. So I came back and thought, okay, we've got to kind of figure out another avenue for this. So I ended up coming up with this idea and pitching it to where we'd have two teams of an account of accountants, we would rent a field. And I appointed captains of each team. And then the captains got to choose a charity. So I don't choose the charities, the captains do. So the captains choose a charity. And then we play and the winning team gets first prize. And initially, nobody knew that the losing team would also get money. So the stakes felt really high. But in the first year, I mean, me and we're just paying out of pocket. So we paid, we gave $1,000 to the first charity, place charity, and $500 to the second place charity, the charity from the team that didn't win. But then after that, we started getting calls about sponsorship, a guy named Ted Cardy was the first one. And he approached us, I had never thought of sponsorship, but he approached us. And so then I thought, okay, well, if we're gonna get one, maybe we could get two. And so I reached out to a company called Tag HR, who I knew, and they were on it right away. So I got two. And then I got calls from a couple others. And all of a sudden, we have four charities. So it's been four charities ever since. But now we have other companies that come and throw in money. Video Tax News is one. AJAG and Wolters Kluwer threw in money this year. So this year, we were able to donate $6,500 to the winning charity, which was able to this year, and $6,000 to the charity of my team that did not win. And that was the Ottawa Youth Services Bureau. So it's, it's a very fun event. And, and it's really, it's really exciting. It feels great to do this for charity. Yeah, so $12,500 donated this year, which I mean, hats off to you. That's incredible. And then on top of that, you know, just a funny coincidence, but most of your business is driven through accounting referrals, correct? That's right. That's right. Yeah. And so everybody who's on the teams are accountants. So it is, you know, it's a business development event in the sense of it was certainly conceived as a business development event. We still docket our time under business development. So yeah, you know, I, I know that, I know that that's, you know, like, that's part of it. But it has been a long time since I really thought of it as a business development event. I mean, for me and Ella, like we think of it as the charity game, it's kind of its own thing. Like we have, I mean, even from the beginning, like when you played on in the game, it was you were Deloitte, like, I know that Deloitte is not going to send me a file, they have their own internal lawyers that are going to handle that same with KPMG. But yeah, we know great people at Deloitte and KPMG. So we're going to bring them to the game because it helps, you know, spread the word for the charities, it helps bring more sponsorship in so we get more money for the charity. So I don't, I don't let like the business development element of it, like kind of poison the real, like the real feel for the game, which is it's just got, it's just got a great vibe now. Like, I love it. Yeah. And I think that the fact that you view it in that way, and like, I see how you talk about this event and all that. And you're very, like very, very clearly passionate about it for all of the right reasons, which is like, I just think this is the best thing ever. Like, I think that this is like, brilliant in every single way where like, okay, you've catered an audience that's helpful to yourself, your business helps build your reputation. And then that's a valuable audience for advertisers, right? And so they're willing to pay to get in front of these people, I hope to one day have the budget to be able to be an advertiser there. And you have this great, you have this great audience, and you get to spend a day with them. And then, you know, at the same time, like you're viewed positively for donating to this. And it is it is just such an incredible event. And I think it's like, just doing the things like this that don't necessarily scale and that are not, right, like, I think we've become overly obsessed with, you know, tracking performance of clicks and marketing metrics and things like that, like, and I think that by doing these things where you can't necessarily draw a straight line to dollars coming in, I think that you really get to stand out where it's like you're doing this tremendous thing for for the community. Again, like I've met people from other firms I wouldn't have met, like I got a lot of value out of it just by participating. Plus, I got you know, I got paid for a day of drinking beers, hot dogs and playing softball. And so like, this is just in my opinion, like this is the perfect thing. Like this is what every firm should be doing, like some iteration of this where they can they can use their resources to help the community. But at the same time, like, I'm sure this has had a very meaningful impact on your business. And you probably can't, you know, again, you probably can't quantify it. But I have no doubt that like, you're now top of mind for the next three months. It's like, Oh, I really like that Dean guy. Plus, he like, he does things that support the community. I'll you know, I need to hand this off somewhere. Um, so yeah, no hats off to you all around. Like that is truly like, to me the most perfect initiative that like any firm could be doing. So thank you. Thank you. Yeah, I think one of the one of the one of the things that I was thinking about what in in advance of this podcast when it came to business development in this project, I think one benefit that we get out of this that I hadn't thought of, initially, and really hadn't thought about until I was thinking about coming on with you is, is the one thing I like about it from a business development standpoint is like a tax dispute is a project, it's a it's a very complicated project that can sometimes last a few years. And it requires a strategy at the beginning, and it requires attention to detail, and it requires really, really tight execution. Like you, you can't miss deadlines, you can't let clients feel like they're the balls being dropped with their file, it requires a high level of organization. And so what I what I like about this event is that we get to kind of demonstrate that for, for people who may be referring us work, we get to demonstrate that, you know, we're on top of it. So Ella is like a maniac about details. And like, when people show up to the game, they know everything is going to go to according to plan, boom, boom, boom, there's a schedule, we start at one o'clock, you know, you get there, all your jerseys are ready, the teams are set up, like, it's, it's a very, it's a very, I like to think a very well executed project. And so I do like in thinking about I do like that, that like jives well with our brand, we want our clients to feel like they're in good hands, like someone's managing their file, and that some of that stress that they're carrying can come off their shoulders. And so I do, I do think that this kind of helps with that. So that's, that's one kind of side benefit that I hadn't fully thought of until recently. That's interesting. I had never considered that point of view. And for people listening, by the way, like, yeah, this is not like a bunch of people show up to a field and you put the mitts in the middle. No, no, like there's reassigned teams. There's some thought put into like, who's on which team? There's, there's music, there's like a sound system, everyone has printed jerseys. Like this is, this is like the real deal. It's not just like a little pickup game. This is like a whole production. There's usually like, I think a barbecue and like some drinks after and stuff like that. So this is truly a whole production. And, and yeah, it's, it's a very well run event, which is which is kind of cool. Yeah, I had not thought of that perspective. But you are displaying. Yeah, the exact type of things that people are coming to you for. So yeah, yeah. So I had one more question, not not softball related this time, but on how, like, did you conduct that kind of exit from from Haslow towards doing your own firm? Because I think a lot of people, right, like they have a client base and whatever that might be, but I think that's a first of all, very difficult conversation to have with a partner, particularly who seems to have been like, a really, really great mentor to you. And so like, how does that kind of like exit and carve out of your own practice work? Yeah, it is complicated, right? Because I so I'm a I'm a maniac when it comes to planning. So I needed in order for me to make this leap, I needed to plan it out. So you know, I did a competitive analysis of like 18 different tax lawyers all across the country. You know, we had I had weekly meetings with Ella, and my mom, who is a finance expert, to kind of make sure that everything was ready to go as far as our finances are going to be in order, our trust account is going to be, you know, eyes dotted, T's crossed, our technology, you know, that's, that's an Ella expertise, our technology would be buttoned down. So I needed to plan all those things before I felt comfortable leaving. But you also don't like, you don't want to leave it so long where where you haven't told this person who's really important to me. So we found kind of a balance there. But yeah, the day I told him my voice was like quivering, because I was so stressed out about it. And I just, I just really just didn't want to kind of lose this mentor. And I didn't want it to go badly. I didn't want I didn't want to become hostile. And so I was so grateful when I did tell him that he was just like fully accepting, you know, he didn't didn't love it, obviously. But like, he knew that he had gone out and he had launched his own thing. So I remember him saying at one point, like, what, like, what am I going to say, you know, I did the same thing at one point, like, of course, like, you kind of have my blessing, go do it. And then we and then we Yeah, we took our clients came with us. He didn't do tax. So that probably made it a little bit easier to kind of divide it. That's, that's probably something that isn't always as easy. But yeah, our clients came with us and off we went. But there was definitely a lot of planning in advance for sure. I bet. And and how long did it take until you were at a point with your own firm where it was like, okay, this was clearly the right choice? Yeah, I mean, people are gonna be jealous about this, but it was, I mean, day two, like, it was just, it was, it was just, it was just an COVID made it easier because I was already working from home. All my clients came with me, we had planned so much that like, so we have an e newsletter that goes out every quarter that our first e newsletter went out on the day that we launched, like we were, we were that ready. And so I just, I just, it was just very obvious. And, and, and I also had Ella with me, right? Like, so if, if Ella wasn't there, then now you're going out entirely on your own somehow, somehow, that would feel different, like, as much as we're, we're two people, plus we have like some contractors. But it, you know, in a way, I'm kind of, I'm the solo lawyer here, but having Ella, like, it feels like a team, even though there's just two of us, and I'm a team person. So that would have felt very different if I was launching, like exclusively on my own, launching, launching with a team made that easier. So again, some people will, I'm sure it's not the case for, you know, maybe 90% of people, it takes a while for them to know. But I, for me, it was, it was pretty quick. Well, that's a testament to preparation, right? Like you said that you spent months and months and months ahead of time. I mean, there's an alternative, which is kind of more my style, and to a degree what I'm doing with Big Four Transparency, where I'm like, ah, close enough, we'll figure it out. And then you just kind of pull the plug. And, and I mean, you know, they each have their benefits. One is like the impulsiveness is nice to just be able to just do the thing, commit to doing the thing. But I do think when you've done all of that planning ahead of time, right, like you get to start on on second base, if you see what I did there. So yeah. Yeah. And I mean, it's, I know you've put a lot of work into into Big Four, like this, this isn't just like a half big plan, like you're, you're, you're, at some point, we got to push, right? And I'm, I'm the type of person who's gonna, who's, who's probably gonna wait a little bit longer than they should. There's, there's probably a happy medium there. Yeah, yeah, absolutely. Well, thank you so much for joining me, Dean. Before I let you go, you also have a webinar coming up. And you're able to provide CPD, right? I think with that. That's right. That's right. So every CPD with accountants, it's kind of weird, everybody's got to kind of check their own. But we do give a certificate of attendance for people who attend this free webinar. It's on October 29 2024. It's an hour long. And it's called our tax dispute update. We give it every year. And it's designed to help accountants help their clients avoid tax disputes. So that's our big thing. We get really good reviews on it. And yeah, it's free and you get and you get CPD credit. So people who go to our website at Blatchford tax law.com can just there'll be a banner at the top of the website and you click and register. It's pretty easy. Perfect. I'll make sure I link that in the podcast notes as well. I think it's worth checking out. I will be I believe at a bachelor party. So I might be missing that one on that date. But I would highly recommend checking it out. Dean, everything that you have put on that I've been a part of has been tremendous. And yeah, thank you for coming to the podcast. Thanks so much for having me. Really appreciate it. Transcribed by https://otter.ai