TaxStatus, an IRS account monitoring service, has added Ric Edelman, founder of Edelman Financial Engines, and Eric Clarke, founder and former CEO of Orion Advisor Solutions, to its board of directors.
The Frisco, Texas-based company also announced that Randy Bullard, who recently served as global head of wealth at State Street, joined its advisory board.
“Data collection generally has always been an Achilles’ heel for our profession,” Edelman said. “Tax data specifically has always been a black hole, and it has been really refreshing and quite exciting to see the capabilities that TaxStatus offers, enabling advisors and their firms to do three things that they struggle to do. The first is finding clients to serve. The second is collecting the data you need to serve them effectively. And third is providing them with the analysis and recommendations that they need to improve their lives. TaxStatus checks all three of those boxes in a way that I haven’t seen from any other financial technology startup.”
TaxStatus was founded in 2017 by Charles Almond to make it easy for taxpayers to check their standing with the IRS and share records digitally with their financial partners. About a year and a half ago, the company started to focus its efforts solely on the wealth management and tax professional space.
The software provides a secure, two-way IRS integration. With client consent, advisors can access up to 13 years of tax records and receive real-time updates on filings, refunds and potential audits. Advisors typically rely on the client to provide their tax data, which can often be inaccurate or incomplete.
“When the client does give the data, it’s usually wrong,” Edelman said. “Advisors know this, and it’s scary for them to rely on that information because the client’s the only resource for it. And that’s always been a weak link in the advisor’s efforts to give the client effective advice. This eliminates that.”
Edelman said that not only is the data accurate, but it’s also instantaneous.
“Advisors spend massive amounts of time gathering data; it’s also a huge chore for the client who has to provide it,” he said. “Nobody has to do any work; that frees up the advisor to spend the bulk of their time doing what the client is paying them to do, which is an analysis.
TaxStatus also helps the advisor learn about held-away assets, he added.
“Advisors are always trying to increase their share of wallet,” he said. “They’re always trying to bring in-house outside assets, and this allows them to learn about those assets, giving them the opportunity to bring them in-house, meaning you can increase your AUM not by having to go through all the work of onboarding a new client, but by simply bringing outside assets from existing clients in-house.”
This follows TaxStatus’s launch in February of its Financial Baseline Report, which provides a comprehensive look at a client’s financial picture. The new tool consolidates income sources, asset activity, tax efficiency insights and account details into a single report.
The company also recently launched a new enterprise lead generation tool, which delivers prospect data directly from IRS records.
“It’s a pivotal time for TaxStatus as we launch new planning and lead generation solutions for advisors that will completely revamp and innovate how they do business,” said Kevin Knull, CEO of TaxStatus, in a statement. “Eric and Ric are two of the brightest minds and thought leaders in the industry. We are very fortunate to add them to our team, and I am confident they will be immensely helpful as we head into our next chapter of growth and innovation.”
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