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From intern to CEO | Accounting Today

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These days, not many people stay at the same organization for their entire career. But, my good friend Nathen McEown, CEO of Texas-based Whitley Penn, has parlayed a wide variety of roles, responsibilities and experiences into the top job at the 850-employee firm with $240 million in revenue. 

Starting as an intern 21 years ago, McEown joined the firm full-time directly out of college and hasn’t looked back since. At the time, Whitley Penn had only 60 employees and $10 million in revenue. But that was part of the attraction for McEown, who was attracted to the collegial nature and scrappy startup feel. Unlike many of his undergraduate classmates, McEown didn’t feel the pressure to join a Big Four firm. He told me he was more attracted to firms like Whitley Penn that were small, but growing aggressively. “I thought I could make a bigger impact there,” he recalled.

If McEown seems young to be a CEO of such a large firm, that’s not a coincidence. The firm’s average partner age is about 44 to 45, and it has 15 partners under the age of 35. “That’s a testament to how quickly we’re growing and developing talent,” McEown related. “It boils down to passion. If you have a passion for what you are doing, it’s easier to put in the long hours and hard work. There was never a point in my career when I did anything just for the money. It was always about the opportunity to learn something new, implement something new, or enhance my growth.” Many of McEown’s fast-rising peers feel the same.

Four core principles have guided McEown throughout his career.

1. Culture of growth (firmwide and personal);
2. Willingness to step into difficult situations and always say yes;
3. Focus on relationships;
4. Recruiting, retaining and developing talent.

Culture of growth

Early in his career, McEown said he gravitated to partners who were excelling at business development. “They  seemed to have a lot more control over their careers,” he recalled. “At a young age, I told myself: ‘I’m going to be the one who goes out and helps grow the business by finding new clients, by getting involved in the community, by networking with folks in the local business community, and by establishing my circle of influence.” McEown brought in his first client when he was just a senior, and he said that enabled him to carve out his niche much faster.

“Our firm has a passion for growth,” he said. “We know if we’re not growing, we’re not going to be able to create new partners and promote more people from within. There is nothing more satisfying than seeing those below you achieve success and further their careers.”

Professional growth

Like McEown, I’ve found growth isn’t just about enhancing firm revenue; it’s about enhancing personal development. According to McEown, when you’re early in your career — staff to mid-manager — you need the proverbial 10,000 hours of experience to really learn the craft and the trade. Then as you progress, he said you need to start focusing on the other side of the business that often gives accountants trouble — soft skills, mentoring and developing additional ways to help clients beyond the pure service line that you’re working in. 

McEown said Whitley Penn’s NextGen program takes high-performing seniors and teaches them how to learn next level soft skills, client development skills, mentoring and training skills. The firm’s Growth Champions program is for experienced senior managers or managing directors who are on the path to partner. He said that’s where participants learn how to do a deep dive into the business of public accounting and a prospective client’s business. It’s also where they learn to describe succinctly how Whitley Penn can help a client not just through the service line they’re currently in (i.e., audit or tax), but through its wealth management, client accounting and advisory services (CAAS), digital, deal advisory group, or any of its other advisory service lines. 

Willingness to step into tough situations

From the earliest age, McEown said he always played the role of “fixer” — the person who would take on the jobs (or clients) that no one else wanted. For example, in the early days of his career, Whitley Penn was doing a lot of energy work but wasn’t getting a lot of private equity energy work. So, he took on the challenge of getting to know the folks in the PE energy space and bring them in as clients.

“In 2016, I moved to our Houston office which wasn’t growing as quickly as Whitley Penn is used to,” recalled McEown. “I took it upon myself to convince the firm’s executive committee that there was a huge opportunity in Houston where the massive energy market is based. I told them I would move my family to Houston if they let me have the role of the Houston office managing partner to see if I could change things.” 

At the time, McEown said the Houston office was only doing about $10 million in business. In 2025, Whitley Penn expects the Houston office to hit $50 million. “You can’t be afraid to fail,” said McEown. “When you swing for the fences, you’re going to strike out sometimes, but that’s the only way to learn and get better.” 

Building relationships

Whether it’s navigating your own firm, handling existing clients or breaking into new markets, McEown said you can never stop building relationships. He recalled having more strikeouts than home runs in his first two years in Houston, and it entailed a lot of cold-calling and reaching out to energy leaders for breakfast, lunch, dinner or drinks…anything to develop new relationships and opportunities.

Since the Houston office was small, McEown and his team not only had to find the work themselves, but then do the work, too. “It was a lot of late nights, but it was fun and some of the most rewarding times I’ve had at the firm because I was able to cause change quickly,” stated McEown.

Another valuable lesson McEown learned was, “If you don’t ask, you don’t get.” He said you must be willing to reach out to people and say, “Hey can you introduce me to friends who may need our services.” Or, “Who are you using? Are you happy with their service? If not, how about letting Whitley Penn bid on your work?” 

“Don’t wait for things to happen; make them happen,” he said.

McEown added, “When it comes to client service, I tell our team all the time: ‘If you get a client call in the morning, you need to return that call by the afternoon. If you get a call in the afternoon, you need to return it by the following morning.'” 

McEown believes clients must always feel they’re a priority for his firm because “so many of our competitors don’t treat them that way.” He frequently reminds his staff: “Don’t just be the auditor. Go into the client’s office and ask about their family. Find out what’s going on in their life beyond the workplace.” McEown believes that once you build a client relationship and earn their trust, you can afford to make a few mistakes. “However, if you’re just an email or an invoice, that’s when you become a commodity and they’re going to jump to the next firm,” he said.

Recruiting and retaining talent

Long before COVID and the great talent shortage, McEown said his firm has always taken recruiting very seriously and done well at it. “We get our partners involved at all levels, including on-campus recruiting. It’s not just our staff or paid recruiters. The partners give presentations, get to know people and shake hands. Even during busy season, our partners know they need to roll up their sleeves and get on campus and engage with the students. Our talent is the lifeblood of the firm and we view it as a critical part of our secret sauce.”

Like McEown I’ve found that ultimately we’re responsible for our own career path. Find what you’re passionate about and let others at the firm move you along. What is your firm doing to recruit and develop talent and keep growing? I’d like to hear more.

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Senate unveils plan to fast-track tax cuts, debt limit hike

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Senate Republicans unveiled a budget blueprint designed to fast-track a renewal of President Donald Trump’s tax cuts and an increase to the nation’s borrowing limit, ahead of a planned vote on the resolution later this week. 

The Senate plan will allow for a $4 trillion extension of Trump’s tax cuts and an additional $1.5 trillion in further levy reductions. The House plan called for $4.5 trillion in total cuts.

Republicans say they are assuming that the cost of extending the expiring 2017 Trump tax cuts will cost zero dollars.

The draft is a sign that divisions within the Senate GOP over the size and scope of spending cuts to offset tax reductions are closer to being resolved. 

Lawmakers, however, have yet to face some of the most difficult decisions, including which spending to cut and which tax reductions to prioritize. That will be negotiated in the coming weeks after both chambers approve identical budget resolutions unlocking the process.

The Senate budget plan would also increase the debt ceiling by up to $5 trillion, compared with the $4 trillion hike in the House plan. Senate Republicans say they want to ensure that Congress does not need to vote on the debt ceiling again before the 2026 midterm elections. 

“This budget resolution unlocks the process to permanently extend proven, pro-growth tax policy,” Senate Finance Chairman Mike Crapo, an Idaho Republican, said. 

The blueprint is the latest in a multi-step legislative process for Republicans to pass a renewal of Trump’s tax cuts through Congress. The bill will renew the president’s 2017 reductions set to expire at the end of this year, which include lower rates for households and deductions for privately held businesses. 

Republicans are also hoping to include additional tax measures to the bill, including raising the state and local tax deduction cap and some of Trump’s campaign pledges to eliminate taxes on certain categories of income, including tips and overtime pay.

The plan would allow for the debt ceiling hike to be vote on separately from the rest of the tax and spending package. That gives lawmakers flexibility to move more quickly on the debt ceiling piece if a federal default looms before lawmakers can agree on the tax package.

Political realities

Senate Majority Leader John Thune told reporters on Wednesday, after meeting with Trump at the White House to discuss the tax blueprint, that he’s not sure yet if he has the votes to pass the measure.

Thune in a statement said the budget has been blessed by the top Senate ruleskeeper but Democrats said that it is still vulnerable to being challenged later.

The biggest differences in the Senate budget from the competing House plan are in the directives for spending cuts, a reflection of divisions among lawmakers over reductions to benefit programs, including Medicaid and food stamps. 

The Senate plan pares back a House measure that calls for at least $2 trillion in spending reductions over a decade, a massive reduction that would likely mean curbing popular entitlement programs.

The Senate GOP budget grants significantly more flexibility. It instructs key committees that oversee entitlement programs to come up with at least $4 billion in cuts. Republicans say they expect the final tax package to contain much larger curbs on spending.

The Senate budget would also allow $150 billion in new spending for the military and $175 billion for border and immigration enforcement.

If the minimum spending cuts are achieved along with the maximum tax cuts, the plan would add $5.8 trillion in new deficits over 10 years, according to the Committee for a Responsible Federal Budget.

The Senate is planning a vote on the plan in the coming days. Then it goes to the House for a vote as soon as next week. There, it could face opposition from spending hawks like South Carolina’s Ralph Norman, who are signaling they want more aggressive cuts. 

House Speaker Mike Johnson can likely afford just two or three defections on the budget vote given his slim majority and unified Democratic opposition.

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How asset location decides bond ladder taxes

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Financial advisors and clients worried about stock volatility and inflation can climb bond ladders to safety — but they won’t find any, if those steps lead to a place with higher taxes.

The choice of asset location for bond ladders in a client portfolio can prove so important that some wealthy customers holding them in a taxable brokerage account may wind up losing money in an inflationary period due to the payments to Uncle Sam, according to a new academic study. And those taxes, due to what the author described as the “dead loss” from the so-called original issue discount compared to the value, come with an extra sting if advisors and clients thought the bond ladder had prepared for the rise in inflation.

Bond ladders — whether they are based on Treasury inflation-protected securities like the strategy described in the study or another fixed-income security — provide small but steady returns tied to the regular cadence of maturities in the debt-based products. However, advisors and their clients need to consider where any interest payments, coupon income or principal accretion from the bond ladders could wind up as ordinary income, said Cal Spranger, a fixed income and wealth manager with Seattle-based Badgley + Phelps Wealth Managers.

“Thats going to be the No. 1 concern about, where is the optimal place to hold them,” Spranger said in an interview. “One of our primary objectives for a bond portfolio is to smooth out that volatility. … We’re trying to reduce risk with the bond portfolio, not increase risks.”

READ MORE: Why laddered bond portfolios cover all the bases

The ‘peculiarly bad location’ for a bond ladder

Risk-averse planners, then, could likely predict the conclusion of the working academic paper, which was posted in late February by Edward McQuarrie, a professor emeritus in the Leavey School of Business at Santa Clara University: Tax-deferred retirement accounts such as a 401(k) or a traditional individual retirement account are usually the best location for a Treasury inflation-protected securities ladder. The appreciation attributes available through an after-tax Roth IRA work better for equities than a bond ladder designed for decumulation, and the potential payments to Uncle Sam in brokerage accounts make them an even worse asset location.

“Few planners will be surprised to learn that locating a TIPS ladder in a taxable account leads to phantom income and excess payment of tax, with a consequent reduction in after-tax real spending power,” McQuarrie writes. “Some may be surprised to learn just how baleful that mistake in account location can be, up to and including negative payouts in the early years for high tax brackets and very high rates of inflation. In the worst cases, more is due in tax than the ladder payout provides. And many will be surprised to learn how rapidly the penalty for choosing the wrong asset location increases at higher rates of inflation — precisely the motivation for setting up a TIPS ladder in the first place. Perhaps the most surprising result of all was the discovery that excess tax payments in the early years are never made up. [Original issue discount] causes a dead loss.”

The Roth account may look like a healthy alternative, since the clients wouldn’t owe any further taxes on distributions from them in retirement. But the bond ladder would defeat the whole purpose of that vehicle, McQuarrie writes.

“Planners should recognize that a Roth account is a peculiarly bad location for a bond ladder, whether real or nominal,” he writes. “Ladders are decumulation tools designed to provide a stream of distributions, which the Roth account does not otherwise require. Locating a bond ladder in the Roth thus forfeits what some consider to be one of the most valuable features of the Roth account. If the bond ladder is the only asset in the Roth, then the Roth itself will have been liquidated as the ladder reaches its end.”

READ MORE: How to hedge risk with annuity ladders

RMD advantages

That means that the Treasury inflation-protected securities ladder will add the most value to portfolios in a tax-deferred account (TDA), which McQuarrie acknowledges is not a shocking recommendation to anyone familiar with them. On the other hand, some planners with clients who need to begin required minimum distributions from their traditional IRA may reap further benefits than expected from that location.

“More interesting is the demonstration that the after-tax real income received from a TIPS ladder located in a TDA does not vary with the rate of inflation, in contrast to what happens in a taxable account,” McQuarrie writes. “Also of note was the ability of most TIPS ladders to handle the RMDs due, and, at higher rates of inflation, to shelter other assets from the need to take RMDs.”

The present time of high yields from Treasury inflation-protected securities could represent an ample opportunity to tap into that scenario.

“If TIPS yields are attractive when the ladder is set up, distributions from the ladder will typically satisfy RMDs on the ladder balance throughout the 30 years,” McQuarrie writes. “The higher the inflation experienced, the greater the surplus coverage, allowing other assets in the account to be sheltered in part from RMDs by means of the TIPS ladder payout. However, if TIPS yields are borderline unattractive at ladder set up, and if the ladder proved unnecessary because inflation fell to historically low levels, then there may be a shortfall in RMD coverage in the middle years, requiring either that TIPS bonds be sold prematurely, or that other assets in the TDA be tapped to cover the RMD.”

READ MORE: A primer on the IRA ‘bridge’ to bigger Social Security benefits

The key takeaways on bond ladders

Other caveats to the strategies revolve around any possible state taxes on withdrawals or any number of client circumstances ruling out a universal recommendation. The main message of McQuarrie’s study serves as a warning against putting the ladder in a taxable brokerage account.

“Unsurprisingly, the higher the client’s tax rate, the worse the outcomes from locating a TIPS ladder in taxable when inflation rages,” he writes. “High-bracket taxpayers who accurately foresee a surge in future inflation, and take steps to defend against it, but who make the mistake of locating their TIPS ladder in taxable, can end up paying more in tax to the government than is received from the TIPS ladder during the first year or two.”

For municipal or other types of tax-exempt bonds, though, a taxable account is “the optimal place,” Spranger said. Convertible Treasury or corporate bonds show more similarity with the Treasury inflation-protected securities in that their ideal location is in a tax-deferred account, he noted.

Regardless, bonds act as a crucial core to a client’s portfolio, tamping down on the risk of volatility and sensitivity to interest rates. And the right ladder strategies yield more reliable future rates of returns for clients than a bond ETF or mutual fund, Spranger said.

“We’re strong proponents of using individual bonds, No. 1 so that we can create bond ladders, but, most importantly, for the certainty that individual bonds provide,” he said.

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Why IRS cuts may spare a unit that facilitates mortgages

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Loan applicants and mortgage companies often rely on an Internal Revenue Service that’s dramatically downsizing to help facilitate the lending process, but they may be in luck.

That’s because the division responsible for the main form used to allow consumers to authorize the release of income-tax information to lenders is tied to essential IRS operations.

The Income Verification Express Service could be insulated from what NMN affiliate Accounting Today has described of a series of fluctuating IRS cuts because it’s part of the submission processing unit within wage and investment, a division central to the tax bureau’s purpose.

“It’s unlikely that IVES will be impacted due to association within submission processing,” said Curtis Knuth, president and CEO of NCS, a consumer reporting agency. “Processing tax returns and collecting revenue is the core function and purpose of the IRS.”

Knuth is a member of the IVES participant working group, which is comprised of representatives from companies that facilitate processing of 4506-C forms used to request tax transcripts for mortgages. Those involved represent a range of company sizes and business models.

The IRS has planned to slash thousands of jobs and make billions of dollars of cuts that are still in process, some of which have been successfully challenged in court.

While the current cuts might not be a concern for processing the main form of tax transcript requests this time around, there have been past issues with it in other situations like 2019’s lengthy government shutdown.

President Trump recently signed a continuing funding resolution to avert a shutdown. But it will run out later this year, so the issue could re-emerge if there’s an impasse in Congress at that time. Republicans largely dominate Congress but their lead is thinner in the Senate.

The mortgage industry will likely have an additional option it didn’t have in 2019 if another extended deadlock on the budget emerges and impedes processing of the central tax transcript form.

“It absolutely affected closings, because you couldn’t get the transcripts. You couldn’t get anybody on the phone,” said Phil Crescenzo Jr., vice president of National One Mortgage Corp.’s Southeast division.

There is an automated, free way for consumers to release their transcripts that may still operate when there are issues with the 4506-C process, which has a $4 surcharge. However, the alternative to the 4506-C form is less straightforward and objective as it’s done outside of the mortgage process, requiring a separate logon and actions.

Some of the most recent IRS cuts have targeted technology jobs and could have an impact on systems, so it’s also worth noting that another option lenders have sometimes elected to use is to allow loans temporarily move forward when transcript access is interrupted and verified later. 

There is a risk to waiting for verification or not getting it directly from the IRS, however, as government-related agencies hold mortgage lenders responsible for the accuracy of borrower income information. That risk could increase if loan performance issues become more prevalent.

Currently, tax transcripts primarily come into play for government-related loans made to contract workers, said Crescenzo.

“That’s the only receipt that you have for a self-employed client’s income to know it’s valid,” he said.

The home affordability crunch and rise of gig work like Uber driving has increased interest in these types of mortgages, he said. 

Contract workers can alternatively seek financing from the private non-qualified mortgage market where bank statements could be used to verify self-employment income, but Crescenzo said that has disadvantages related to government-related loans.

“Non QM requires higher downpayments and interest rates than traditional financing,” he said.

In the next couple years, regional demand for loans based on self-employment income could rise given the federal job cuts planned broadly at public agencies, depending on the extent to which court challenges to them go through.

Those potential borrowers will find it difficult to get new mortgages until they can establish more of a track record with their new sources of income, in most cases two years from a tax filing perspective. 

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