Being a Good Tax Attorney without a CPA License with Henrick Haeckel (Part 1)
Phil sits down with Henrick Haeckel to discuss his unique path into his current role as a tax attorney. Henrick gives a look behind what it actually looks like to work in the tax arena and how difficult it can be but how rewarding it can be as well. As complicated and cold-hearted taxes can be, Henrick emphasises that as long as you work hard, keep your head up, and your ear to the ground, the rewards and enjoyable and meaningful.
Narrator [00:00:02] Hello and thank you for tuning in to another episode of CPA Review and more. We are pleased to bring you the number one podcast for CPAs and CPA candidates. If you'd like to learn more about how your CPA review can help you, find us on our website at YaegerCPAReview.com. Now, here's your host, Phil Yaeger.
Phil Yaeger [00:00:28] Good afternoon, everyone. This is Phil Yaeger and this is once again CPA review and more today. We're not doing CPA review. I would call this sort of more. And we have a very distinguished guest. This gentleman. I would say that he's next to Johnnie Cochran. Wouldn't you say that.
Henrik Haeckel [00:00:48] Just just a step behind.
Phil Yaeger [00:00:51] He knows O.J. though, you never met OJ did you?
Henrik Haeckel [00:00:55] No I did not.
Phil Yaeger [00:00:56] OK, all right. So anyway, his name is and by the way, I'm going to get this right. It's Henrik. How do you pronounce his second name?
Henrik Haeckel [00:01:04] Haeckel.
Phil Yaeger [00:01:05] Haeckel. That's interesting. You get kidded about that name.
Henrik Haeckel [00:01:08] Yes. It's not the first time.
Phil Yaeger [00:01:10] I'm not going to kid you about your name. All right. Anyway, Henrick is in you can see he actually owns the library at Columbia University and he sublet it to them. Is that correct? This man is a real he makes Donald Trump look like nothing. Well, it doesn't take much to make Donald Trump nothing. He's actually in front of a picture of Columbia University. Right.
Henrik Haeckel [00:01:33] That's a little library at Columbia University where the administration sits.
Phil Yaeger [00:01:38] And he is a graduate of Columbia University right now. He is not a CPA. And I don't say that from a negative standpoint because he'll show you he'll talk to you about what he's done to reach, you know, what he's doing at this point. You don't always have to go for a CPA to make it in accounting. He's a tax attorney. So, you know, hey, he is a big demand for tax attorneys. Hey, the exam is changing. You know, five years down the road. It's going to an evolution change and people are going to decide, hey, do I want to be in public accounting? Do I want to work in financial planning, advisory services or even tax planning? So very marketable, even though he doesn't have the CPA. And also we'll talk about what he does. He was telling me that he's planning is this public knowledge? Can I mention this?
Henrik Haeckel [00:02:33] I'd just say I'm working towards a partnership with the firm.
Phil Yaeger [00:02:37] He's working for a firm that is going for a partnership. And what specialty would that be? The tax attorney still?
Henrik Haeckel [00:02:44] Well, we are a tax boutique and.
Phil Yaeger [00:02:47] Yes, I saw that. What does that mean, a tax boutique?
Henrik Haeckel [00:02:50] We don't really do things outside of tax. We do tax. We do a lot of tax. The owner or founder did tax for shipping companies, ships that come to the United States owe tax and are required to file tax returns and he carved out a niche in that market.
Phil Yaeger [00:03:08] Now, what is the niche exactly you say is in a tax area? Well, taxes is all types, corporation partnerships. What taxes do you do for this niche, if you want to call it that?
Henrik Haeckel [00:03:21] So historically, he's done, as I said, started with this shipping tax, which has its own set of rules and its own client base, and develop that internationally. And there are certain areas like Greece, for example, that's very shipping dependent nation. And he developed a niche with that. And then one issue that people aren't necessarily aware of is that US taxpayers be they green card holders or citizens have a requirement to file their tax returns, irrespective of whether they are in the US or not. And because of his relationships in Greece, he spread out into the individual space focusing on expats, I'll call them abroad and helping them get tax compliant and dealing with their transactions. From there, he got involved in business tax. My practice has kind of built on that. I've done more transactional work since I've been there and working towards helping CPA firms with more sophisticated tax issues in the international space or partnership related or M&A related. That's my core subset specialties. Fastball, as they would say in the big four, is used to be international, but it's now multifaceted.
Phil Yaeger [00:04:41] Do you enjoy that? What area? What do you enjoy of your position, your job, what you do? Tell us what you enjoy about it.
Henrik Haeckel [00:04:49] I certainly never thought that when I was growing up I'd be a tax attorney.
Phil Yaeger [00:04:54] You know, I think I could have told you that really.
Henrik Haeckel [00:04:59] There's very few people that I think think that I know one, but probably thought that. But he he grew up with a tax attorney, father, that weaned him on tax law as a child.
Phil Yaeger [00:05:08] Isn't that terrible to be weaned on tax law? That could be painful.
Henrik Haeckel [00:05:12] That's a whole nother story. What I love about tax, what you tend to find with successful tax professionals is that you can learn something new every day that the material and the issues that. You're dealing with aren't necessarily repetitive and that they require thinking and analysis and they challenge you, the material may appear dry, but the other element of tax, which I find very fascinating, is that it gives you a view of a person or company's existence in a way that very few other things will, because your tax follows money. And where the money is, is where people are and what they're doing. And so you get to see how different businesses operate. You get to understand the operations activities of different people. And so it's almost voyeuristic, but it gives you an education into business in ways that I don't think you're otherwise able to easily.
Phil Yaeger [00:06:09] Tell us the map of how you learned what you know to do what you do. For example, I know you you majored in accounting, correct?
Henrik Haeckel [00:06:18] Absolutely not.
Phil Yaeger [00:06:20] No I'm sorry you didn't, you majored in political science. Yes. Hold on one sec. Let me slap myself in the face.
Henrik Haeckel [00:06:31] Columbia has one accounting class for undergraduates.
Phil Yaeger [00:06:34] Yeah, they are snobs. Aren't they in a way?
Henrik Haeckel [00:06:37] Yeah we are we are elitist,.
Phil Yaeger [00:06:39] Elitist those Ivy Leaguers.
Henrik Haeckel [00:06:42] Yeah. Our marginally accepted in the community. Yeah.
Phil Yaeger [00:06:46] You know, I prefer to be with a group of people from the University of Phenix. You know, you're never going to have to really talk on a high level. You know what I'm saying?
Henrik Haeckel [00:06:56] I love everybody. No matter where they come.
Phil Yaeger [00:06:58] I know, you're a politician. You sound like a politician.
Henrik Haeckel [00:07:01] I used to not be, I've had it beaten out of me three years in the big four in law firms.
Phil Yaeger [00:07:07] So let's go back let's go back to you, Major, in political science. And then usually people major in something other than accounting. They'll decide whether they want to go into accounting, which means they may have to pick up the courses, the credits, so they'll eventually qualify for the CPA exam. Did that come across your mind at any point?
Henrik Haeckel [00:07:30] Not until I was already really in law school. I graduated college in ninety nine. Many of your listeners won't remember the dotcom bust, but I got laid off during that and I learned that a political science degree, no matter where you are, it's just that it's a degree. If you don't have any hard abilities, you're not consummately employable.
Phil Yaeger [00:07:54] So what do you do with your degree when the dotcom bust came?
Henrik Haeckel [00:08:00] So this ties to how I am where I am. I ended up doing bookkeeping for small businesses in New York. And that was my first experience, really with accounting related matters, is tracking the books and journal entries for these businesses.
Phil Yaeger [00:08:22] Did you enjoy doing that?
Henrik Haeckel [00:08:24] Is there were parts of it I enjoyed. Some of it was similar, as I said, that you got to see how the business operated and it gave you an entree to management that you wouldn't normally have because you're seeing things that matter to them. A well-run business or a poorly run business for that matter, needs to know where it stands at any given point in time. And a bookkeeper at its basis is supposed to be providing that information accurately.
Phil Yaeger [00:08:50] When you are a you know, we used to call out right up work, right. Remember that bookkeeping? That's where the client at the end of the month would give you is what I remember because I did it. They give you all the checks, OK? And then they wanted you enter the checks in a accounting software type thing, and then at the end you would give them different financial statements. And they wanted also they wanted to give you some advice that words, any recommendations are our income is very high. You have any recommendations? We get a taxable income lower. So we have to pay my taxes. And I'm talking that legally. OK, all right. You do that.
Henrik Haeckel [00:09:34] So I operated in that role more as a financial advisor, forecasting where they were. One of my bigger clients at the time was a furniture manufacturer in New York, and the dotcom bust hit his operations as well as he had to relocate.
Phil Yaeger [00:09:53] What was just without telling me the name of that furniture store, where were they located?
Henrik Haeckel [00:09:59] They were in the Meatpacking District.
Phil Yaeger [00:10:01] OK, OK. What did they they stuff the furniture with meat.
Henrik Haeckel [00:10:06] I mean, what he had his business was to import exotic woods and build a whole piece furniture, meaning like tables that were made out of one piece of wood as opposed to multi pieces of wood and was catered towards the the wealthy because these were fairly expensive items.
Phil Yaeger [00:10:29] Handmade?
Henrik Haeckel [00:10:30] Well, I mean, because of the nature of the import,.
Phil Yaeger [00:10:33] By the way, where were they manufactured? You just said imported.
Henrik Haeckel [00:10:35] Well, the wood came imported from Asia generally. And then the manufacturer took place on site here in the in New York and then later in Queens.
Phil Yaeger [00:10:46] So he got into that area. Now, you was still doing the accounting, right? Did you do the payroll tax returns also? Did you get it idea?
Henrik Haeckel [00:10:54] Then we outsource payroll to ADP, but I handled the reporting to ADP and the 401k reporting components as well. So I did a bunch of things and I did that for a bunch of different clients.
Phil Yaeger [00:11:08] And now was satisfying to you? Is that correct?
Henrik Haeckel [00:11:11] I think more than anything, that experience was satisfying on and being my own boss. I had my boss is my client, but there isn't the bureaucracy that can be involved in other situations.
Phil Yaeger [00:11:28] Did you have employees that you were basically overseeing?
Henrik Haeckel [00:11:31] No, it's just me.
Phil Yaeger [00:11:33] Just you OK? All right, but what about-
Henrik Haeckel [00:11:35] It's a small time, small time operation. I was just stringing it along until I ultimately went to law school, so.
Phil Yaeger [00:11:42] OK, so you were in that, all right. No employees basically were on your own in a way. Right. And you then decided, I don't want to do this type of work. And then what do you do going to law school?
Henrik Haeckel [00:11:56] Well, I had already as I started doing that, I had been contemplating between getting an MBA and a JD. I decided a JD would be more valuable because worst case scenario, I could go to the courthouse and try to pick up clients.
Phil Yaeger [00:12:12] That's all right. Picking up clients. OK, did you get an LLM?
Henrik Haeckel [00:12:16] No. So when I was in law school, I went to Northwestern. I took two classes in tax and that I paid my own way, which a lot of people, when they go to law school, don't really think through the inordinate amount of debt they go into.
Phil Yaeger [00:12:35] How much is left school to go these days?
Henrik Haeckel [00:12:39] I couldn't tell you back then. I walked out with one hundred and seventy.
Phil Yaeger [00:12:43] Wow, and that's not even a masters of law.
Henrik Haeckel [00:12:47] And that's just the JD. Yeah. And so while I was doing that, I had already thought about tax and I think I did the nerdy thing and I reached out to some tax practitioners for informational interviews. What they did I got.
Phil Yaeger [00:13:01] How did you get the job, though? In taxation, you graduate.
Henrik Haeckel [00:13:05] So I graduated and I got a position at Latham and Watkins, which is one of the top five law firms in the country.
Phil Yaeger [00:13:18] Did you work a lot? Did they work you to death?
Henrik Haeckel [00:13:18] They don't they don't pay you a lot for nothing.
Phil Yaeger [00:13:21] What do you make now that? Twenty five thousand a year, if I may ask? No I'm not asking.
Henrik Haeckel [00:13:28] So the. That they had an unassigned program, which means that you don't get hired into a specific group at Leatham and you theoretically are able to select projects that you want to work on that need to get staffed. And I was one of the few people that was interested in tax.
Phil Yaeger [00:13:53] Really? That's interesting. Why isn't there an interest in taxes? To me? I really like taxes. Well, client comes in. It's like a puzzle, you know, hey, you know, these things I have tell me I can pay less taxes.
Henrik Haeckel [00:14:06] Well, yeah. I mean, I think the puzzle analogy is really anybody who likes tax always says it's like a puzzle. I find Chessler a puzzle or something like that. Lawyers are averse to numbers generally. So tax is kind of an outlier for the majority of lawyers. The material isn't necessarily, as on its face, exciting as thinking that you're going to go in front of a court or judge and argue a case or something like that. Tax people are law firms are generally self-selecting and they they have their own personality quirks.
Phil Yaeger [00:14:54] What kind of personalities do they have now? The lawyers and I mean, you watch law shows on TV, they have forty five minutes and they to solve the case. Right. It looks really exciting. You know, you never quite understand how they come up with the briefs so quickly. But, you know, it's I think that's why a lot of people want to be lawyers, because they see those shows and they're so exciting. You can get to find that. That was Perry Mason, remember Perry Mason?
Henrik Haeckel [00:15:23] They have the remake now on HBO, right? Yeah.
Phil Yaeger [00:15:27] I remember he would he would solve the case. And then the last five minutes, he'd get the person to admit they were guilty.
Henrik Haeckel [00:15:35] And it was like law and order, you know?
Phil Yaeger [00:15:36] Yeah. I like Law and Order. It was Beverly Hills. You know, they're all beautiful people.
Henrik Haeckel [00:15:43] I, I worked on tax case as well. Our tax matters in part while I was there and then my wife was admitted to graduate school and DC. We were in Chicago and I looked at lateralling to a firm here and.
Phil Yaeger [00:16:03] So your wife's an attorney also.
Henrik Haeckel [00:16:05] No, no, she works for the government. She's a bureaucrat, a bureaucrat.
Phil Yaeger [00:16:09] Well, we all work for the government don't we?
Henrik Haeckel [00:16:11] Maybe, you know.
Phil Yaeger [00:16:12] Yeah. So what what department is she in?
Henrik Haeckel [00:16:15] Currently she works for Housing and Urban Development.
Phil Yaeger [00:16:18] And now with the new administration, what is she going to do?
Henrik Haeckel [00:16:22] Probably the same thing as she was.
Phil Yaeger [00:16:23] She's a career person then.
Henrik Haeckel [00:16:24] Yeah, she's a career she's not a political appointee.
Phil Yaeger [00:16:27] This is always the question I asked people. You know, after so many years, you get a pension from the government. Not as good as it used to be, but no, no, no. There's a defined benefit plan back then.
Henrik Haeckel [00:16:38] Yeah. That the defined benefit plan, they don't have quite the same plan anymore.
Phil Yaeger [00:16:43] And these people would work thirty years and then double eighty percent of their wages. And I'd say, you know, a lot of people insult government workers. They say they don't do anything, they're lazy and they walk out with a big pension. And, you know, and I always said this because we're surrounded by them here more than as many as we used to have. All right. But I say, you know, if you can sit there all day, all right, and keep trying to keep yourself busy doing nothing, I said they deserve that pension.
Henrik Haeckel [00:17:18] My wife is I and my wife might listen to this.
Phil Yaeger [00:17:22] I had a I had a friend of mine worked for FEMA. Yeah.
Henrik Haeckel [00:17:30] That's one of the worst run agencies, according to her, because affiliated-.
Phil Yaeger [00:17:33] Well he's retired, long retired and but the last year he was in his 30th year. And he hated the place. You know, he hated the government. So what do you decide to do? Is he had a routine. You know, this was routine. He'd come into the office and he walked around with a yellow pad and the yellow paper that notes on it. And then the first thing to do when he got in there was go to the gym for exercise. And he would do that from, say, nine to 11. Then you have a coffee break. And, you know, he used to tell me this I thought is the funniest thing in the world. And I said, gee, how do you do that? He says, you get used to it. Yeah, that's what he was saying. But so what is your wife against what I just said that government workers.
Henrik Haeckel [00:18:19] Yeah, she actually works and she's working for low income housing, which is complex and difficult issue.
Phil Yaeger [00:18:31] Is that HUD?
Henrik Haeckel [00:18:35] Yeah that's HUD. She-.
[00:18:35] Oh, no, I'm not really. I know there are a lot of government work, you know.
Henrik Haeckel [00:18:40] Yeah I know, I get the sarcasm I'm from New York.
Phil Yaeger [00:18:43] Let me let me assess you. Yeah. I guess you work hard, too. I don't mean to be a wise guy.
Henrik Haeckel [00:18:49] Eh, you can't help it.
Phil Yaeger [00:18:50] Yeah I can't help it, you know. It's that New York thing in me. I can't get rid of it.
Henrik Haeckel [00:18:54] I think I realized later in life that I should have never left New York because our personalities don't transfer as well to the rest of the country.
Phil Yaeger [00:19:04] Don't you feel you have more in common. You're talking to New Yorkers.
Henrik Haeckel [00:19:07] Yeah, well, they kind of are on the same wavelength, you know. You know, we're one another are coming from and you don't take it-.
Phil Yaeger [00:19:16] I love I love New Yorkers talking to them, you know. Hey, how many people in North Dakota know what a mensch is?
Henrik Haeckel [00:19:26] I'm going to guess very few.
Phil Yaeger [00:19:29] They probably say a mensch, does he sit on a bench? They have actually a thing Bed Bath & Beyond sells it. It's called the mensch on the bench. You ever seen that thing?
Henrik Haeckel [00:19:40] No. Well, Bed, Bath and Beyond is almost dead as far as I know.
Phil Yaeger [00:19:44] But this was all they had. This guy this guy got investors on Shark Tank. Anyway, it's like the elf on the shelf, but it's called the mensch on the bench. All right. Yeah.
Henrik Haeckel [00:19:59] I will I will look on eBay and see or maybe it's still being manufactured.
Phil Yaeger [00:20:03] And he's got some that he has these tremendously large rabbis stuffed. OK, they can go on the shelf, too. I give the guy credit. I mean, God.
Henrik Haeckel [00:20:17] Hey, you gotta make a buck.
Phil Yaeger [00:20:18] A buck? He got one, I think he got Robert Herjavec to invest and he's made a fortune. Now, it's just. But that's that's American capitalism. So I know.
Henrik Haeckel [00:20:31] But I mean, that kind of folds back. He sets up his business. And how does he set up his business? How does he report his income, how does he become tax efficient? He keeps more of his money. How does he grow or how does he sell his business and how does he do that as efficiently as he can? And what are the implications?
Phil Yaeger [00:20:55] Yeah, he had an idea, really. It was an idea. Instead of the elf on the shelf. It'll be the mensch on the bench. Yeah.
Henrik Haeckel [00:21:03] This all all ties back in my mind, sadly or fortunately, to a tax component in that people have to pay their taxes. They don't like paying their taxes and they're not a lot of people out there.
Phil Yaeger [00:21:17] Does anybody like paying their taxes.
Henrik Haeckel [00:21:19] I will make a sad confession. I don't like paying my taxes. I don't mind. Well, I don't mind. I don't mind paying my taxes because I, I as we discussed earlier, I grew up in a low income area. And so I've seen what life can look like. And I believe in government, but not ever. I understand not everybody feels that way. And I don't want to pay more than I have to, but I do. OK, ok. Pay what I what I'm supposed to.
Phil Yaeger [00:21:48] You know, I don't know if I told you where I grew up. I grew up in Valley Stream, Long Island. You know, that is Valley Stream, Lynbrook. It was Nassau County, OK. And that's where I went to high school. And it was just a middle income. But I'll tell you, I loved growing up there it was like a a melting pot in a way. We had Italian neighbors, Jewish neighbors and my Italian neighbors always made me linguine or something because my mother thought she was kosher. My mother thought, you're kosher as long as you don't eat pork, so.
Henrik Haeckel [00:22:27] It could be worse, right?
Phil Yaeger [00:22:29] It does is she said, well, I'm kosher. She walks into a Chinese restaurant and she has chicken chow mein. She says, I didn't have that pork. So to her, in our mind, she was kosher. But I miss those days. I really do. I, I don't know. And I find now. I'm getting older, I'm more nostalgic for that stuff, you know.
Henrik Haeckel [00:22:50] No, I hear you, and there were simpler times before, that's for sure.
Phil Yaeger [00:22:55] Yeah. You know what I was talking about that with my wife today. People are getting so greedy and you know, they'll do anything to really try to knock you out of business and maybe you don't have. You're an attorney, so in a lot of cases they don't want to mess with an attorney. Am I wrong?
Henrik Haeckel [00:23:12] I mean, the law space is difficult. So when I was in big law, the issue is that attorneys are as valuable as the relationships that they have. And if somebody leaves a law firm and is able to take a client with them from that partner, that partner is suddenly much less valuable than he used to be. And so they're the structure of these firms has changed over time, where it used to be much more collegial and there was a succession planning. So you'd have the next person come in, take over the account.
Phil Yaeger [00:23:52] But Henrik, I'm thinking of the reason I'm afraid of attorneys. You know, if you ever have to sue someone for malpractise, all right, they'll think twice about it because they could tie you up forever with paperwork, right?
Henrik Haeckel [00:24:07] Yeah. I mean, what you learn through anything in law is that things generally take forever and a day for that.
Phil Yaeger [00:24:19] Who pays for that?
Henrik Haeckel [00:24:20] Well, that depends. So, so. Well, actually, to be honest, I'm dealing with some clients now that are middle income, not not wealthy people that are getting very screwed by the IRS because the IRS has processed international forms incorrectly and assessed penalties against them.
Phil Yaeger [00:24:48] Why would you say that's happening? Incompetent people being hired without you. Don't you want to be?
Henrik Haeckel [00:24:53] I'm not trying to be. I'm trying to be fair about it. I would say that the the code in 2017, there was a massive revision of the code and the IRS is massively understaffed. There's been a cutback for ever, probably since the Bush years on staffing the IRS. So they're understaffed. They have these changes in law and then they get these different reports. And your management is reactive to reports going to Congress. And as a byproduct of that, things fall through the holes and or aren't dealt with properly.
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