Company: Taxfyle
Name: Richard Lavinia
Title: CEO and co-founder
When you created Taxfyle, why did you think there was a need to democratize access to accountants?
In the past decade or so, there’s been a consistent reduction in the number of new CPAs entering the workforce. This is led by the leading indicator of the number of students interested in the field of accounting, which has declined on average year over year. Combined with the fact that we have more regulatory work and there are more small businesses in the U.S. now than ever before, this has put a tremendous amount of stress on the traditional brick-and-mortar accounting profession. All of this leads to longer hours and fewer people, essentially working as effectively and efficiently as possible.
But the work needs to get done, and I felt that there was a need to create a platform that brings all of those opportunities back to the worker – and there are more opportunities now than ever before. Through Taxfyle, we’ve developed a platform that makes the important work of tax filing easier to manage, and we allow the members of our tax professional network more control in life while tapping into their specialty and their technical knowledge.
How do CPAs and EAs benefit from participating in the gig economy?
If you want to do tax returns and leverage the power of your license, you don’t need to sign up for a firm that’s going to work you 100 hours every single week during the busy season. I definitely encourage CPAs to seek high-revenue services such as consultations and audits, but as far as commoditized services go, taxes must be treated as such. Joining a firm just to prepare tax returns doesn’t seem like the correct answer to this problem. However, it’s still something that the vast majority of CPAs in the U.S. like doing.
The Taxfyle platform attracts them back to the profession by routing those jobs to you without any prescheduled commitments. You don’t have to sign up to work 40 hours a week with Taxfyle. You simply join the platform and start getting push notifications when those jobs come in. It allows you to go about your day and have the flexibility to work tax-filing jobs depending on your desired schedule.
What are some of the most significant issues accounting and tax firms face today?
Staffing is of the utmost concern for firms nationwide. We have fewer accountants entering public accounting from college, the average age of CPAs at firms is rising, and veteran tax practitioners are departing public accounting for other opportunities in the private sector. Meanwhile, firms have to handle increased workloads, higher scrutiny, and improved efficiency with fewer hands to help. They’re feeling compressed against higher workloads that need to be done within a very strict window of time.
What is causing firms to experience issues with staffing?
Public accounting is a rigorous sector of the profession. And as time goes on, the desire to work 80- to 100-hour weeks – especially when half of tax returns are being extended – the busy season is not something that people in the profession look forward to. As a result, some accountants are now coming to the decision that the grass is greener outside of public accounting, leaving many firms shorthanded during the busiest times of the year.
With AI becoming more prominent, how can this technology help firms?
Taxes are a service that can be commoditized, but there’s so much nuance in the work. It’s not just a matter of how to fill out the form. It’s an interview for what has transpired over the previous year for an individual or a small business. On top of that, it’s not just a question of what transpired, but the intent behind those transactions. Each tax filer needs to be treated differently based on the context. AI is similar to Tesla’s approach where you could buy a Model 3 today and it will drive itself, but it still has a steering wheel to be operated manually. We’re taking the same approach. We’re using AI to augment the work tax practitioners are doing to make the process more efficient, get them more jobs, and help them make more money.
Should tax practitioners be concerned with AI replacing jobs?
The role of AI in tax preparation is not to replace the people completing the work. It’s simply a way to allow CPAs to complete their jobs more efficiently. At the end of the day, clients want a human that has worked on their tax return to make sure the client is paying the least amount of taxes as possible. As far as I see right now, there’s no clear instance, even in the future, where you’re removing the practitioner from the tax return preparation and review process.
How can outsourcing be used to alleviate staffing shortages at firms?
Sometimes it’s not efficient to hire someone for 12 months to complete tax-filing work. Firms face compression during the busy season, but then there’s no guarantee there will be enough work during the offseason. However, if these firms leverage a platform like Taxfyle, they can access a network of tax professionals, located within the U.S., that will allow the firm’s staff more time without adding more overhead costs to the firm.
How can outsourcing be used to keep existing staff at firms engaged?
Firms need to increase the value of their hourly work. I found that it was always more engaging to get a vast array of job opportunities, whether it’s audit or consulting, and there’s upward mobility. When you join a firm, you want opportunities and exposure to different job opportunities and many people leave firms because they don’t get those opportunities and are instead caught up doing repetitive work. If you remove the repetitive work of tax preparation or review and send those jobs to our platform, it frees up time for CPAs at firms to focus their attention on clients and different tasks that offer more engagement and value.
