Harvey Bezozi is not an ordinary accountant. With a roster of clients that include television and movie stars, musicians, record producers, and other A-list luminaries, Bezozi typically gets a call from a celebrity’s manager, tax preparer, or wealth adviser when a critical financial matter arises.
“Usually my entrée is through a big problem with a huge amount of taxes owed.” Bezozi says, adding that his experience over the years in “dealing with IRS agents and becoming a good negotiator and problem solver,” has helped him develop a reputation as a go-to partner when tax issues come up.
Bezozi says entertainers experience most of the same issues as other extremely high-income taxpayers, such as technology entrepreneurs and owners of family businesses. A typical situation for his services would be a wealthy individual whose advisers have battled the IRS but believe their options are exhausted. Accordingly, much of Bezozi’s work involves evaluating tax cases in which the IRS determines that someone owes back taxes, or cases in which an audit reveals additional sums owed.
Even top accounting practitioners sometimes call in a specialist in IRS conflict resolution. The main objective for Bezozi is to lower the amount owed by the client. Bezozi suggests that involving a tax resolution specialist early, when the IRS case first arises, offers the best potential for success.
When Bezozi isn’t helping a platinum-selling musician or a TV star, he doubles as a CFO-for-hire for wealthy individuals and the businesses they own. And no matter who the client is or how rich they are, Bezozi advises them to spend more rationally, like the so-called millionaire next door, and to practice these five money habits:
• Live below your means (no matter who you are). This sounds simple, but most people don’t do it. First, Bezozi says, create a budget with a trusted adviser and stick to it. High-earners and big spenders in particular should make sure to include upcoming purchases and expenses in their budgeting.
• Stay on top of your tax payments. It’s critical for high-earners to make quarterly tax payments to the IRS, Bezozi says. Also, the alternative minimum tax (AMT) is a stark reality for any individual who earns above $95,750, or for a married, joint-filing couple with more than $191,500 of income, so AMT must be properly addressed.
• Keep track of the true value of your assets. One realm in which Bezozi advises is estate-tax planning. Valuing your assets correctly can reduce estate tax considerably. “In an estate plan, you want to make sure your assets are legally but aggressively appraised so that you’re not overpaying your estate tax,” Bezozi says.
• Protect what you own. Making sure your assets are protected with the right entity is key. Whether it’s financial assets or tangibles like real estate, a boat, or even intellectual property, an LLC or trust can insulate you from potential creditors and hostile suitors.
• Hire a personal financial watchdog. “A good adviser will always engender trust from the beginning,” Bezozi says. Lawyers and other advisers, working together, he adds, “keeps the client engaged to do the right things.”
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