Tosh Show Episode Summary: "My Staff’s Tax Guy - John McLellan"

Podcast Information:

• Title: Tosh Show
• Host: Daniel Tosh
• Guest: John McLellan, Accountant
• Release Date: February 18, 2025

Introduction

In this episode of the Tosh Show, comedian Daniel Tosh welcomes John McLellan, the show's producer and resident accountant. The conversation delves into John's professional expertise, personal background, and his experiences navigating the complexities of tax season. As the episode unfolds, listeners gain valuable insights into tax preparation, IRS protocols, and the intersection of personal hobbies and professional life.

Guest Background

John McLellan shares his journey from a motocross racer to a seasoned accountant. Growing up in Torrance, California, John was deeply involved in motorsports from a young age, participating in junior motocross and excelling in the 80cc expert mini categories from ages 7 to 12.

John [12:18]: "I pretty much rode motocross from 7 years old to almost 12 and really excelled in the 80cc expert mini categories."

However, a pivotal shift occurred when his father transitioned from a framing contractor to a craftsman, prompting John to pivot his career focus. Leveraging his aptitude for computers, he seamlessly integrated technology into his accounting practice, emphasizing efficiency and accuracy.

John [19:00]: "I was really good at computers and nobody knew how to use computers that well in accounting. So I became an accountant, and the rest is history."

John's academic path included business degrees from Loyola Marymount and Cal State Long Beach, and an international stint in Indonesia near Bali, where he indulged his passion for surfing.

Personal Interests: Surfing and Motocross

The dialogue frequently veers into John’s love for surfing and racing. John recounts his early experiences with surfing, detailing his favorite spots like Hagerty’s Point and his unforgettable ride at Punta Roca in La Libertad, El Salvador.

John [16:15]: "Punta Roca at La Libertad in El Salvador. Best wave I've ever caught."

His passion for motorsports continues through his son's involvement in kart racing, highlighting the familial legacy of racing and the blend of adrenaline-fueled hobbies with everyday responsibilities.

John [36:07]: "Last weekend he was in Orlando, Florida at the Orlando Kart Center. He's only 11, and he's already got a room full of trophies."

Tax Season Insights

As tax season approaches, John provides a wealth of knowledge on navigating IRS audits, understanding tax laws, and optimizing tax returns. He emphasizes the importance of accuracy and compliance to avoid audits and penalties.

John [24:26]: "Disproportionate expenses can trigger IRS scrutiny. If you live in Malibu but report $10,000 income, the IRS will investigate."

He debunks myths about IRS audits being entirely random, explaining that while there is an element of randomness, the IRS also targets discrepancies between reported income and lifestyle.

John [22:32]: "They audit people randomly and they audit poor people... If you show that you can afford luxury living without corresponding income, you're a target."

John addresses common tax misconceptions, such as the pitfalls of using services like TurboTax for complex tax situations.

John [29:16]: "Nobody that has made some money should do their own taxes. It's risky and can lead to errors."

Common Tax Issues and Red Flags

John discusses specific red flags that can attract IRS attention, including:

• Discrepancies in Income Reporting:

  John [24:26]: "If you live in a high-income area but report low income, the IRS will take notice."

• Excessive Deductible Expenses:

  John [24:26]: "Claiming high travel expenses without sufficient business justification is a red flag."

• Inconsistent Documentation:

  John [34:05]: "Clients sometimes try to claim unsupported deductions, like a dog as a dependent."

He advises maintaining thorough and accurate records, regular shredding of sensitive documents, and ensuring that all deductions are legitimate and well-documented.

Personal Anecdotes and Professional Experiences

Throughout the episode, John shares personal stories that illustrate his approach to accounting and client relations:

• Encountering Fraudulent Claims:

  John [34:05]: "A client brought in trash bags full of unopened envelopes... It turned out her husband had passed away, and we helped her organize her taxes."

• Dealing with IRS Roadblocks Abroad:

  John [17:12]: "In El Salvador, we faced a makeshift roadblock with men armed with M16s. It turned out they just needed a ride, but it was nerve-wracking."

These experiences highlight John's commitment to ethical practices and his ability to handle unexpected challenges with professionalism.

Parenting and Hobbies

A significant portion of the conversation revolves around John’s role as a parent and his efforts to balance his son's passion for kart racing with safety and responsibility.

Daniel Tosh [36:00]: "I was infatuated with that world as a child. I didn't get to race... How is he doing?"

John [38:37]: "He's racing against kids older than him now, stepping up to bigger carts, and he has a great instinct for safety."

John also touches on the influence of his own upbringing and his desire to provide his children with opportunities he cherished.

Tax Advice and Tips

John offers practical advice for listeners preparing for tax season:

• Hire a Professional Accountant for Complex Finances:

  John [30:09]: "If you have the income level to afford a house, you should get someone to do your taxes."

• Stay Compliant and Avoid Audits:

  John [23:45]: "Ensure your financial activities are transparent and justified to minimize audit risks."

• Leverage Technology for Efficiency:

  John [19:00]: "Using technology in accounting speeds up processes and reduces errors."

He also addresses the evolving nature of tax laws, recommending continuous education and staying informed about changes to remain compliant.

Conclusion

The episode wraps up with a light-hearted exchange between Daniel Tosh and John McLellan, blending humor with insightful discussions on taxes, personal interests, and the intricacies of balancing professional duties with personal passions. John’s candid sharing offers listeners a relatable perspective on navigating tax season while managing a dynamic personal life.

Notable Quotes:

• Daniel Tosh [22:17]: "But you're, but you are saying..."
• John [24:26]: "Disproportionate expenses can trigger IRS scrutiny."
• Daniel Tosh [28:35]: "I'm terrified of jail, though. The idea of jail."
• John [29:24]: "They're overpaying typically because that's what we do."

This episode serves as a comprehensive guide for anyone looking to demystify the complexities of tax season, offering both professional expertise and personal anecdotes that make the subject approachable and engaging.