Entrepreneurial Spirit: How Two Andersen Alumni Help Thousands of Businesses Secure Overlooked Tax Incentives to Improve their Bottom Line
Former alumni Gian Pazzia and CJ Aberin live by the Arthur Andersen motto: Think Straight, Talk Straight. As founding partners of KBKG, one of the largest independent specialty tax firms in the country, they have worked to preserve that legacy both professionally and personally. While both Gian and CJ have engineering backgrounds, Gian runs the Cost Segregation practice at the firm, and CJ’s focus is on key Federal Green Building Tax Incentives.
Gian and CJ partner with CPA firms to provide overlooked tax incentives to businesses as a strategic, value-add service. In addition to Cost Segregation studies and Green Building Tax Incentives (under IRC 45L and 179D), the firm also focuses on R&D Tax Credits, Transfer Pricing, IC-DISC, and Employee Retention Credits.
What started as a niche operation serving small to medium-sized businesses has grown significantly. Under Gian, CJ, and the rest of the leadership’s guidance, the firm now serves the full gamut of businesses with clients from single CPA offices to Fortune 500 and publicly traded companies. Through a solid reputation and positive word of mouth, the firm’s client base has grown over the last two decades, as has their geographic reach. What once began in southern California as a boutique specialty tax operation has expanded to all corners of the continental US and beyond.
In 2008, the team launched its R&D Tax Credit service, which quickly evolved into the fastest growing practice at the firm with field experts from Big 4 firms and the IRS now strategically positioned in each of their offices nationwide. As of 2019, with the addition of Transfer Pricing to assist companies with their global effective tax rate, KBKG moved into the international space serving clients across the globe. Today, the Cost Segregation department is one of the largest of its kind in the industry, and the Green Building Tax Incentives group assists some of the country’s largest builders and developers who incorporate energy-efficient designs.
“KBKG has been our go-to resource for Cost Segregation and 45L Tax Credits for years. They make the process easy with their expertise and solutions. Working with them has really allowed us to add significant value for our clients,” said Arthur Andersen alumnus Ken Raleigh, Tax Director and Partner at Hedman Partners.
Developing a Client-Centric Service Model
KBKG is a client-centric firm, and its focus is on seamless collaboration with CPA partners to expand tax preparers’ existing service offerings through strategic tax incentives. Simply put, their goal is and always has been to make the lives of CPAs and tax preparers as easy as possible. The team at KBKG understands that through technology and a deep understanding of tax, they can anticipate issues and questions that can arise in order to provide answers and solutions proactively.
“We’ve worked with KBKG for many years and find their client service and commitment to quality to be unmatched. We appreciate the team approach they take to serve clients. They are proactive, collaborative, and responsive not only with us but with our mutual clients. We are happy to continue to refer clients to them,” said Arthur Andersen alumnus Amber Busch, who is currently a Shareholder with Clark Nuber, one of the largest CPA firms in the US.
One of the ways they accomplish this is through the development of supplementary software. For example, to aid CPAs in the import of Cost Segregation studies to accurately calculate schedules, KBKG’s 481(a) calculator saves CPAs an estimated 2-4 hours on each return. This tool is offered free of charge to anyone that refers KBKG to a new CPA partner. Another resource is the Residential Cost Segregator® that CPAs can use to generate their own cost segregation reports for smaller residential properties that historically did not make sense to study. The firm has also produced several other software tools for CPAs and end-users related to various incentives, including Partial Dispositions of Building Components, R&D Tax Credits, Payroll Tax Credits, IC-DISC, and more.
Upholding Standards of Excellence
One of the ways KBKG sets itself apart from other providers is through continued education and a high standard of excellence. Gian got involved with the American Society of Cost Segregation Professionals (ASCSP) when the organization was still in its infancy. The member organization was created to promote a strict code of ethics for the professionals in this industry to be held accountable. By meeting a strict set of qualifications and experience, members can take the exam to become a Certified Cost Segregation Professional.
Gian has served as a past president of ASCSP and sat on their board of directors for 10 years. CJ is also a Certified member who has been involved with ASCSP in various capacities. Presently, KBKG boasts the most Certified Cost Segregation Professionals (CCSPs) in the entire country, and one of the firm’s other Principals, John W. Hanning, is currently serving as ASCSP President.
In addition to ethical standards, the firm also values assisting organizations that put the concerns of CPAs, tax preparers, and clients first. For example, CJ is an active member of the Real Estate Roundtable, an advocacy group for the industry, and participates in various committees, including their tax committee. He has traveled to the Hill several times over the last few years to hear from Congress members and discuss the importance of certain tax provisions. These advocacy efforts have had a direct impact on the continuance of key tax extenders. Additionally, he also hosts annual webinars with the Roundtable to update CPAs on the impacts of current tax proposals and legislation on the real estate landscape.
This commitment to ethics and excellence extends beyond KBKG’s cost segregation and green building tax incentives practices. It is part of the firm’s DNA. KBKG now employs former IRS engineers and professionals to add an additional level of quality control to all KBKG projects, especially R&D Tax Credits. These former IRS experts know first-hand what to look for and anticipate when reviewing KBKG’s work. Also, the firm offers audit defense and support in substantiating tax claims. In an area such as R&D Tax Credits, where audit exposure comes with the territory, this added level of service provides assurances to KBKG’s clients that their best interests are at the forefront of what the firm aims to do.
The Arthur Andersen Mindset
Their time at Arthur Andersen, as well as being a part of the Andersen Alumni network, has shaped the way both Gian and CJ approach business, and how they have grown their practice areas at KBKG. After working for Arthur Andersen and learning through experience how to develop, plan, and execute a service-based business, they learned about the key to success: value your employees and never compromise on retaining the very best talent. This is why Gian and CJ believe they have been able to come so far. Andersen’s approach to creating networking opportunities, opening doors, and cultivating leaders is one of the ways Gian and CJ approach business. In the same way that leadership training at St. Charles and having the opportunity to work with and learn from talented colleagues was key at Andersen, creating a similar atmosphere to develop experts and leaders has been key at KBKG.
While developing their unique practices was a challenge for the pair, they used their experience and resources to create procedures for delivering studies. Gian put into place templates, systems, and methods to get the work done. What started as a rudimentary collection of Excel spreadsheets, grew into a fully functioning business structure to manage the growing workload, as KBKG quickly expanded into new markets. CJ related this new beginning to a start-up environment and used it as an opportunity to create well-thought-out systems from a business development standpoint. To this day, KBKG uses those fundamental structures that Gian and CJ created to launch new service lines, and they both credit their experience at Arthur Andersen for much of the success they have had.