CPA to the Skies

October 01, 2017

Recently, David Klasing, CPA, owner and operator of his namesake tax practice, brought his CPA talents to the air, launching his own plane as a new tool for his growing business. We talked to Klasing to see how this idea came about and ways his pilot license is helping him serve his clients. 

When did you start flying and why?
My father was trained by the Dutch Airforce as a fighter pilot and flew P38s. Before I could walk he was taking me on frequent family outings to airshows and I guess you could say it was in my blood from day one.

How challenging was it to get your pilot’s license?
Learning to fly was an incredibly emotional and challenging experience. I experienced emotional swings from elation to desperation, self-doubt, aggravation, sweat-inducing fear, regret, excitement, pleasure and pain. It’s incomprehensibly expensive, time consuming, infinitely complicated and mentally stimulating. My five-year journey began by building a flight simulator and by taking a six-month private pilot ground school class. Because I was over 50 and had high blood pressure I had to go through all sorts of vigorous testing to make sure my heart could take the rigors of flight training: blood enzyme tests, halter monitor, tread mill, EKG, etc. Flight training is very misleading. I could probably teach the average CPA how to mechanically fly the airplane, turn right, turn left, go up, go down in all of five minutes. It’s all of the theory that makes flight possible, all the systems knowledge you’re required to have and all of the federal air regulations you have to know cold that makes the task of actually becoming a pilot so difficult and expensive.

Landing an aircraft is purely art and not science and every landing is unique and different. It’s by far the hardest thing to learn how to do safely and can be downright frightening at times. I have had landings where I almost ran out of runway, and put flat spots in the tires trying to stop the plane, I have had landings where the plane pitches sideways at the last second for no apparent or logical reason responding to either a sideways air current or the jet blast from a distant parked or taxiing jet. I have had landings where I could not keep the airplane on centerline and nearly careened off the runway. The scary part is that my experiences are common to all “low time” pilots.

What are some exciting flights you’ve logged?
The most exciting flying I have done is to Catalina’s “airport in the sky.” The airport is 1,600 feet above sea level, has a cliff on both sides of it and a high spot in the middle such that when you land you have the optical illusion of landing on a very small runway which has caused many accidents where pilots try to get the airplane stopped unnecessarily fast.

Any parallels between learning to fly and being a CPA?
Learning to fly is very similar to becoming a CPA in that it takes a ton of drive and dedication to accomplish both. Less than one quarter of 1 percent of the population flies. Barriers to flying include the amount of time effort, money, drive, intelligence and perseverance it takes. Just in the manner the CPA exam and the qualifications to sit for it limit the number of CPAs walking around out there, so does private pilot ground school, the private pilot written exam and the private pilot oral exam and demonstrated flying skills test with an FAA examiner. It takes an analytical mind to fly an airplane.

How did the idea to incorporate your plane into your tax business originate?
I first came up with the idea some six years ago at the UCLA Tax Controversy Institute, where a panel was briefly discussing a case where an attorney had prevailed over the IRS when the IRS had disallowed the attorneys private pilot air travel expenses as not being ordinary and necessary to the practice of law. After talking with the IRS Chief Counsel Attorney on the case, I came to the conclusion that if I could show a large increase in revenue and taxable profit because flying gave me a competitive advantage in my practice, I could deduct a reasonable amount of travel expenses. I did a ton of research before spending one dime on flight training. I have been pursuing aviation for about five years and have not deducted one penny of my training or air travel expenses, but expect that to change when I get the business use of my airplane up to 50 percent. 

What is the involvement of your plane in your business?
I have had an office in Westwood, near Santa Monica Airport, for the last three years or so. I have on a few occasions tested my hypothesis regarding saving time by flying to that office rather than driving. Because of the horrific traffic patterns in and out of the west side, it takes nearly four hours, round trip, by car to travel to my LA office from my Irvine office. I have made the flight between Irvine and Santa Monica in 18 minutes before. It is less than 50 miles by air to travel from John Wayne to Santa Monica. When you add in the time to preflight the airplane, do a run up, taxi for takeoff, secure the airplane on landing and Uber back and forth to Santa Monica, the average travel time by air is less than two hours. This leads to a two-hour time savings where you can be working and billing clients. After earning my instrument rating I opened four more satellite offices in San Bernardino, Panorama City, Oxnard and Santa Barbara. If the use of the airplane leads to a competitive advantage, then I will go to a faster, higher flying airplane and expand into Northern California and surrounding states.

This is creative marketing for your firm. Any advice for other CPAs struggling with marketing?
All marketing in my opinion is a form of expensive experimentation. If it works, keep doing it! If it doesn’t work, stop doing it. Also if you come up with something unique, don’t share it with anyone because once everyone else is doing it, it will no longer be quite as effective.

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