Tuesday, June 29, 2010

Father's Day and Taxation

Father's Day, 2010. My wife and daughter cooked up a delicious breakfast of buttermilk waffles. The key is: buttermilk. It makes everything better. Turns ordinary waffles into extraordinary waffles. Combine buttermilk with love and, well, you've got it made.

My wife is is out running chores, my daughter is out running, jogging, I took a brief bike ride, came home, and sat down to read Chapter Five, Choice and Happiness from The Paradox of Choice by Barry Schwartz. In it, he speaks about a psychology experiment which is pertinent to all tax practitioners. The chief experimenter, Martin Seligman, ran an experiment teaching a group of animals to jump over a hurdle to avoid an electric shock (which is similar to a tax audit, but less painful). One group of animals had previously learned a different way to avoid the shock, but that method would no longer work. Another group had never learned to avoid shocks. The result of the experiment was that the animals who had previously learned how to avoid shocks learned the new method more quickly than the group which had never learned any technique to avoid a shock.

So, Abe, what has this to do with tax practitioners? Easy. We are like those animals. We have learned tax law and we have learned tax planning approaches that serve our clients well. Congress continues to change the law but, because we have prior experience, we can more easily learn the new law than someone entirely new to the profession. Or, think of it this way, we are the experienced animals and our clients are the animals who have never learned any technique. That's why they continue to come to us for help.

The law continues to change. The end is not in sight. What we used to know no longer applies. But we have learned how to learn. We have learned how Congress thinks, or doesn't think. We have learned about dealing with the IRS. Maybe it is true, maybe there is nothing new under the sun. Maybe what Congress passes is just a variation of what came before. But even if they come up with something entirely novel, we can adapt more easily because of what we have learned previously.

This is why continuing professional education is so important. In Los Angeles, where I live, the victory of the Lakers is being celebrated. And they won because, well, because they are good and they stay in shape. They have new competitors, but they stay in practice. And continuing education keeps us in practice, keeps us in shape.

When, on my bicycle ride, I went by cars with Laker flags waving, I picture all of us, as experienced tax practitioners, with our winning pennant in the race. The route may change, but the footwork basics always apply.

Your thoughts?

Best,

Abe Carnow

1 comment:

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