(upbeat music) (upbeat music continues) - Welcome to "A Shot of Ag."

I'm your host, Rob Sharkey.

Do you love doing taxes?

I know I don't.

I do not want to do taxes ever for the rest of my life.

I don't want to pay them.

I don't want to do them.

That's why we have people that are very smart at doing them.

Today's guest is gonna tell us how to commit as much fraud as legally possible, step by step on doing our taxes.

Today we're talking with Kelly Jackson Hardy.

Isn't that correct, Kelly?

- Absolutely, Robin.

But I don't think you'd look good in stripes or orange, so maybe we'll stay away from fraud for you.

- Okay.

- Okay.

- I mean, is there something that you would like to read?

- Oh yeah, I do.

I have to read, you're right.

I have to say that before we get started I do need to say a quick disclaimer that my comments today are intended as general information and do not constitute any financial, accounting, or legal advice, no fraud.

- Nobody believes that.

- But they should.

- Yes.

You're not here to give advice.

I'm not giving advice.

- Yes.

But they call you a principal at CliftonLarsonAllen.

- It's a different word for partner, but yes.

- Okay.

That's not a small accomplishment.

- No, we are actually a $2 billion professional services firm.

- Oof.

- Do accounting, tax, assurance, outsourcing, wealth advisory, digital.

You name it, we can do it.

- And to become a principal or a partner, I mean, you got to be good at what you do.

- And lucky.

- You got to be good at what you do.

- And lucky.

- Oh, okay.

So you're not good at what you do?

- Well, I like to think I'm good at what I do, but we try not to.

Typically, if you get into the mode of thinking you're too good at what you do, it comes back to bite you.

Better to stay low key.

- You don't necessarily do like a lot of people's taxes anymore to this point, correct?

- I look at a lot of people's taxes.

Yes, so I am responsible for a lot of people's taxes.

Love farmers - In all openness, you do our taxes, Emily's and mine.

- I do.

I have that privilege.

- Well, I don't know about that, but we won't let you not do it.

We went to the same school.

- The same high school.

Good old BHS.

- Bradford High School, which is no longer there.

- Right.

Part of it's there.

- Yeah, what is it, K through eight or K through six?

- Yeah, and the gym's still there.

- Yeah, yeah.

You grew up on a farm.

- Grew up on a farm west of town.

- Alright.

What were y'all raising?

- We had farrow-to-finish hogs, cattle, row crop.

Dad sold feed.

Dad sold seed for a time.

He had a trucking business that he started when I was 10.

And then in 1994 there was a succession event, or lack thereof.

And he walked away, and started a new life with his trucking company.

And you don't realize until after what kind of impact that had on you, but it was a big deal at the time.

- Yeah, yeah.

Did you enjoy growing up on a farm?

- I was not the farmer.

I didn't like to go out and get dirty.

My sister was the farmer.

She was great at it.

She loved the animals.

She loved taking care of them.

She was great.

I did not.

I enjoyed sitting at the lunch table with the hired men, and talking, and.

- Cussing?

- Well, no, I didn't cuss then, but they did.

There was lots of other inappropriate talk too, but that was fun.

And we'd watch the markets every day at lunch.

And sometimes I would ask, "Well, Dad, what's it take to raise a hog?"

or, "How much do you get?"

Blah, blah, blah.

And the answer was, "Well, it's kind of none of your business."

But it took me until I was 40 to kind of figure out that that was how I was interested in ag.

I wasn't interested in the whole going out and killing mice underneath A-sheds, in the hog field or scooping.

- It has to be done.

- Scooping manure after, you know, it snows on cement floors and he's out there with the skid steer laughing as he pushes it as close to you as he can, hoping it goes down in your boots.

- Well, that's what we do as dads.

- I know, or getting thrown in the water tank in the summer as you're walking around the A-shed fields to check the.

- Well, that doesn't sound horrible.

- It wasn't horrible.

I'm still alive.

- It sounds like a spa.

- Yeah, with algae.

Yes.

He was ahead of his time.

- But is it fair to say you're a numbers gal?

- I'm a numbers gal, yeah.

That's the part I liked.

- Okay.

You went to Bradford.

- Went to Bradford.

- Grade school and high school, which is not large at the time.

Still not.

- No.

I had 24 in my class.

- 24.

- 24.

What'd you have?

- 20.

I think it was 24 too.

- Okay.

- Yeah, you were in 8th grade when I was a senior, so we weren't in high school together.

- No.

- Yeah.

- But everybody knew who you were.

- Oh, well, you know, it's not like you couldn't know who everybody was.

There was 100 some people in the school.

- Yeah.

But you were the big deal.

- Oh, okay.

Yeah, a really big deal.

Okay, but wasn't a big school.

I mean, a lot of people would think, you know, that doesn't really provide enough challenge or education for someone of your intellect.

- I would say they're wrong.

And at that time, I mean, you remember some of these names.

We had Michael Henley, we had Robin Goff, we had Will Fryer.

We had all kinds of great teachers that, you know, I learned as much as I needed to.

I didn't struggle in college.

You get what you take from it and how much effort you put into it.

It was a great experience.

- Was it because you went to Bradley?

- Well, I'm a proud graduate of Illinois Central College.

- Oh, Harvard on the hill.

- Harvard on the hill.

Yes, yes.

- So do you think there was any detriment to being from a small school that getting into colleges?

- No.

- None?

- I didn't have any.

- Yeah, but you're really smart.

- On paper.

- Okay.

I guess that's all that matters.

- That's right.

- So what'd you study at Bradley?

- I studied accounting at Bradley and graduated.

And then Caterpillar started a fellowship program my senior year and was willing to pay for me to go to graduate school at Bradley.

And so I did that, did some research for the professors, that was part of the gig.

And then interned with Caterpillar my last semester.

- [Rob] All in accounting?

- My graduates an MBA, but it had a focus in accounting.

- Okay, what'd you do at Caterpillar?

A lot of fraud?

- No, not a lot of fraud.

Not a lot of fraud.

A lot of input of data into spreadsheets, and we had to present at a meeting and talk about the data we input into spreadsheets.

- When did you start with CliftonLarsonAllen?

- Well, there was a middle in there.

So I graduated with my master's right after 9/11, so the market wasn't great.

And at Bradley, I had a professor that helped me out.

And I actually started working for Arthur Andersen.

And I don't know if you remember that name or not.

- They were like a.

- Were a big deal, yeah.

So I started two weeks before they admitted destroying documents in that big thing they were involved in.

- See?

- It was me, I did it.

I ran the shredder.

So went to work for them, and I made it to the end.

I did not get terminated.

And I actually put the last tax return out of the Indianapolis office, and I had to go like reel the guy taking the printer away back.

- So you could print it out?

- So we could print it out on the very last day that Arthur Andersen existed in Indianapolis.

And then we moved down 20 floors in the building to another, then it was a Big Four firm, Ernst and Young.

And it wasn't my favorite.

So it was, "Okay, let's move back home."

And there happened to be an ad in the paper, you know, 'cause you used to advertise for jobs in the paper.

That just means we're old.

- The paper, it's like an iPad that's made out of paper and you flip the pages and that.

It's really cool if you've never seen one.

- Yeah, and then you like, provide a piece of paper to an employer that says what you've done and what you wanna do.

It's called a resume on paper.

- Yeah.

- So they were advertising for a new person at what was the Clifton Gunderson office.

And I applied, and got an interview, and like, "Well, whatever, I'll go.

I don't care."

(laughs) Had another interview.

It was funny 'cause I specifically asked that they not have me like on a Wednesday, like in the middle of the week.

That maybe you could do it on a Friday or a Monday 'cause I was driving four hours to come back.

And it was like on a Wednesday at like nine o'clock in the morning.

Okay, fine.

So then I get a second interview, and I'm thinking, "Hmm, I have a little more pull here now."

So I'm like, "Mm, yeah.

Can we do it this day?"

And we got it that day.

Yes.

- Do you think you got it because you were like acting like you were cool?

- I think so.

Yeah, very cool.

But they had a partner retiring or getting ready to retire, and they were looking for somebody to groom to replace him.

His name was Chuck Murfin.

- But you didn't start as a partner?

- No, I started as a lowly associate.

- Okay.

So you were doing people's taxes?

- Oh, yeah.

And reviewing taxes and doing whatever they told me to do.

And that was okay.

- You liked that?

- Yeah.

I'm good with following rules.

- I've never seen it.

Well, okay.

There's two people in my life I've seen that have been able to do a calculator like you do.

- It's a skill.

I should have brought the calculator.

- I mean, she, this is Kelly.

Yeah, oh yeah.

And then, "Oh, you shouldn't have bought that."

Yeah.

- But you know who I had to blame for that?

- Who?

- Bradford High School because we had an office practice class.

- Did you really?

- And Patty Wilkinson was my teacher, and she was awesome, and she taught us.

We had to like open the phone book and like go through the phone book.

- Really?

- Yeah.

It was great.

Learned a lot.

- Jeanette Dunn at The Elevator could do it as fast as you could.

- Oh, well, I'm gonna have to work at it.

- But that was, I've never seen any.

'Cause you don't look, and then you're having a conversation at the same time, and you're just adding stuff up.

- And I know when I screw up.

- If I'm doing this and I will still mess it up.

Is it just a skill or practice?

- Practice and a skill, yeah.

- Okay.

- It's the only skill I have.

- That's not true.

You're very good at your job and I'll tell you why.

Anybody can do the numbers part, right?

Like smart people, I'm talking.

But then you are doing our taxes, and we've been friends for a long time.

You, Emily, and I have been friends for a long time.

So you're doing taxes of a friend.

And then you're looking at what we're doing and you have to say, "You know what?

I've got some uncomfortable things to tell you.

You guys are, well, you're spending more than you should."

You sat us down and you scolded us.

And I could tell you didn't want to do it, but you still did it.

And it was one of those moments in life that I always look back on that it did change the way that we looked at stuff.

We actually changed a lot of things from that one discussion that you gave us.

You didn't have to do that.

You could have just done our taxes 'cause we were making money.

I mean, it wasn't like we were going broke.

But you chose to have an uncomfortable moment and tell us that.

- Yep.

And that's what people don't really understand about this job.

It's not about the numbers.

People will look at me, "Oh, you're good at math."

It's not about the numbers.

It's about things like that.

So my job is to help you.

My job is to help all my clients.

And if I'm not willing to have the hard conversations, I'm not helping anybody.

And you don't wanna see your clients or your friends fail.

So, trust me, I thought about that conversation long before I actually had it.

But you want everybody succeed, do well, have a good life.

And if you can help them, you should help them.

There's more psychology to this than there is math.

- Well, that moment was, yeah.

No, you did help us.

Now I think you kind of enjoy telling us that we screw up on stuff.

- Well, I like telling you what to do.

Emily, that's a different deal, yeah, no.

- But it's not just we go to you, and it's not just you doing our taxes and saying this, that, and the other.

I mean, you are very specific on saying, "Hey, this is what you need to work on next year.

You need to bring that down.

You need to bring that up.

That's where we need to go from here."

- Yep.

- Not everybody does that.

- No, a lot of people will just plug number in the computer, get you the lowest possible tax, call it a day.

And I don't believe in lowest possible tax either.

- Yeah, I know.

We went round and round on that.

- About that.

Yes.

- You do say paying taxes is not the worst thing in the world.

- No, so when you said at the beginning that, you know, it's all about fraud.

Well, if you're not paying taxes, one of the following is probably true.

You're not making any money, or fraud, or you're not building anything for the future.

- Okay.

I'm okay with the fraud.

- Well, if you are, that's fine, but I'm not.

- Good accountant will get me out it.

- Yeah, a good account will get you out of it.

I had a guy do that once.

It was pure fraud.

And I got called in to help on his audit.

And at the end of the audit, the agent told me that he should have his first grandchild named after me because I basically got him out of going to jail.

- Really?

- Yeah.

That was a fun little experience there.

Not, but.

- Yeah, I mean, there are some people that don't care.

- There are some people that don't care.

But typically, if you see the people that don't pay any tax, don't show any income, it's not gonna end like they think it's going to.

- Eventually catches up.

- Yeah.

- Yeah.

A principal, which is a partner.

- Yeah, essentially.

- Their word for it.

When did you become a principal?

- 2016.

- I mean, for a partner, you were pretty young.

- I was young-ish, yeah.

- And a lot of females?

- Not tons of females, more females than there used to be.

Not a lot of females in the ag group, but more than there used to be, so we're making strides.

- That's a big deal.

- I think it's a big deal, but you try not to make it a big deal.

- I mean, CliftonLarsonAllen.

- They're big.

- They're kind of around, aren't they?

- Kind of around.

We're kind of big, kind of nationwide, kind of number 11.

- And all that from someone that went to Bradford.

- Someone that went to Bradford.

And we actually had a partners meeting last week, and you sit in that room and you're like, "I'm from Bradford, Illinois and I'm in this room."

And you don't feel worthy, but.

- [Rob] Really?

- No, not at all.

You don't feel worthy.

You're kind of like, they call it imposter syndrome.

We talk about imposter syndrome a lot of the firm, where it's like, "How did I get to this spot?"

And, you know, I had a lot of great mentors along the way.

And one of them used to tell me that, you know, "You never say no.

And if you're uncomfortable, that means you're growing."

And he was right.

- [Rob] Okay.

- So all the opportunities I've had have been because I didn't say no and I took a chance.

- Like being on this show?

- Definitely.

- We'll see how that goes.

- Like being on this show.

Kinda like my dad did in '94.

He took a chance.

He didn't say no.

- What's this?

- That is an Oliver tractor that the gentleman that hired me gave to me when he died.

So his name was Chuck Murfin.

He's a hell of a guy.

And after he passed away, his sons brought the three tractors that used to sit in his office up to me.

- [Rob] Oh.

Well, what'd that mean to you?

- It meant a lot to me.

- Yeah.

- Yeah.

- It means, I don't know.

A lot of people are uncomfortable with who replace people.

They must have had a lot of faith in you.

- I hope he did.

I hope he did.

But he was a good egg.

- People have to have faith in accountant, like an accountant that you're really connected with, because you're seeing everything that I do.

And I don't know, sometimes that's a little intimidating.

- A little bit.

You got to trust them.

You have to trust them.

You have to like them.

It can't be somebody that you have any doubts about.

- How many kids you got?

- Two boys.

- Two boys.

- 13 and nine.

- Yeah.

Well, tell me about them.

- Grant and Heath.

They are good boys.

So Grant's.

- I don't know.

One of your babysitters said they are just hellions.

- Well, she's not a hellion.

She's a good girl.

But I'm sure she didn't say that, Miss Anita.

- But I mean, you talk about your son being inspiring.

- Yes, he is inspiring.

Summer of '24, he complained that his arm was hurting.

And it turned out that he had stage four Hodgkin's lymphoma.

And I think it was about 22 days between the day we had him at the University of Iowa for the first time to the day he had chemo for the first time.

And he had chemo twice a month for six months.

And last February, they scanned him and he was clean.

So we go back here soon to make sure he's still clean.

But that kid is the toughest person I know.

And he has a level of, I'll call, it's faith, it's mental stamina that is unbelievable.

He didn't cry.

He didn't complain.

He didn't say, "Why me?"

I've asked him in the last couple months.

I'm like, "Were you ever afraid you were gonna die?"

And he said, "No."

He said, "It was just something I had to get through."

- Were you afraid?

- Oh, of course, I was afraid.

Yeah, I was afraid.

And I mean, I remember them wheeling him out to get, I think his port put in or maybe when they did the first biopsy, and you know, you're standing there crying 'cause your son's having to go through this.

And the kid sat up in his bed, and looked at me, and said, "Mom, it's gonna be okay."

- (laughs) He put it right back on you, didn't he?

- Yeah, and after that I'm like, "Fine, it's gonna be okay."

And if Grant can do this, I can do this for him.

And he's a tough kid.

- Yeah, it sounds like it.

I mean, tough on him, tough on you.

- Tough on everybody.

- Yeah, yeah.

- We had a great doctor, great medical staff.

It's not somewhere you ever expect to be.

And what I learned was there's a lot of great people willing to help you.

My younger son's best friend is treated at the same hospital.

They have a genetic eye disorder, and they helped us learn what to do.

I have another friend whose son had leukemia.

She helped us.

And you know, just yesterday, I had a client knocking on my door at 5:05 that his daughter ended up with a eye tumor at the same time my son was getting done.

- [Rob] Oh geez.

- So I imparted all my knowledge on to him.

And he stopped yesterday to kind of catch up on, you know, what happens after, and how do the kids operate after?

- I'm not familiar with it.

University of Iowa has a hospital then?

- Yeah, they do.

Kind of a big one.

- So which is better, University of Iowa or Bradley?

(laughs) - You know, I love Bradley.

Bradley was wonderful to me, but you know, they both have a special place in my heart now.

- I would say so.

Was Bradley good at sports when you were going through it?

I don't think they were.

- I don't think so.

I don't think so.

But I didn't have much of a college experience, a true college experience.

- So you didn't throw down?

- No.

- Were you living at home?

- I commuted.

Yeah.

Until I went to grad school, I commuted.

- Okay.

I dunno, it was?

- It was an hour.

- You drive slow.

You didn't take an hour to get to your farm to Bradley.

- It did actually.

- Emily can get there in 20 minutes.

- Well, Emily's good.

She had to get all the way to SIU.

- Well, what do you tell someone that, let's say someone that is number smart, young person.

They want to know what to do in the future.

What advice do you give them?

- If you wanna be an accountant and you wanna work in public, which I think is rewarding, do not wait until you are done with college to take the CPA exam or start studying for the CPA exam because you will never take it and you will never pass it.

You get it over with as soon as you can.

Too much time is spent waiting to take it.

And then the other thing I like to tell people is that you can have, you know, a class of 24 or town of 900.

I have had an extremely rewarding career.

I've done things that I've never ever imagined I would be able to do, and I've done it all from here.

And I didn't have to go to Chicago.

And I didn't have to leave the people that I loved.

And I didn't have to leave where I grew up.

And I can contribute back to what contributed to me.

- Yeah.

I see you speak and present at places.

- Yep.

We'll be at Top Producer here in a few weeks.

I'm speaking at a bank event in March.

Yeah, I love to talk.

- So think about that.

I mean, people actually pay you for your opinion.

- People pay me, yeah.

It's funny isn't it?

Can you believe it?

- It's so weird.

- It's so weird.

- What's in the future?

- The future?

Boy.

You know, the last couple years it's kind of been just get through the present, but, you know, in the future, continue to help people, try to do more.

Grow the next generation is probably the big thing.

You know, I wanna retire someday.

So I've got four or five people I work with pretty closely in the office that, you know, I want them to be me.

And I want them to be there to take care of my clients after I'm gone.

- Should farmers be worried coming into 2026?

- Yeah.

- Damn it.

Let me ask that again.

Is everything okay?

- You know, I was surprised that people weren't less okay when I saw them in December, but at that point you're just working on your income, right?

You haven't looked at your balance sheet.

So you don't really know where you're working capital's at and how much of it you've lost over the last couple years.

So kind of where we're at right now is where we were at the end of 2019.

And then COVID came and saved everybody.

- Lot of payments came in.

- Lot of payments and a lot of high prices.

And that's not coming, I don't think.

Again, I can't give advice.

Yeah.

So I think it's time to take a real hard look at lifestyle, at capital investment, and get that working capital back in order.

- See, this is what she does.

She's like, "Quit spending so much money.

Did you really need that new tractor?"

Yes I did, "Kelly."

- Okay.

- Yes I Did.

- Then if you needed it, fine.

- I didn't.

I didn't need it.

So this is what you do is you're honest and real with people.

That, "Hey, stop."

- Yeah, nobody benefits from me telling you that you should go buy a new tractor just so you don't have to pay any taxes.

- That is the giant myth out there in Agriculture.

- It is.

That is a giant myth.

- Yeah, and I mean, we all grew up with it.

And then we talked to someone like you and you're like, "Eh, you're just kicking a can down the road."

- Yeah, yeah.

And it's not what you wanna do.

And the other thing, the other myth, is land is great, love land, not gonna be a land hater here at all, but you can't put it all in one pot.

So the other thing I try to get people to do is invest outside of land.

So like a retirement vehicle of some kind.

And it's interesting how many people in ag, you know, you guys live your life based on mother nature and the commodity market, okay?

So let's talk about risk here.

But if you get somebody in the stock market that doesn't have a tolerance for it and it drops one day, I'm getting phone calls.

Like, "I gotta pull out, I gotta pull out."

I'm like, "Oh wait, wait, did you quit farming yesterday because craft report came out and it wasn't any good?"

"No."

So it's just a different way of looking at things.

But the guys that are really successful are the ones that have built it in both camps.

They've got some liquid assets and they've got some dirt 'cause you can't spend dirt and paint disease can be fatal.

- Paint disease.

That's something I've suffered from quite a bit.

So all I heard you say is that I should probably be looking at buying a lake house.

- Yes.

An expensive one.

- Okay.

- Yeah, or two.

- Kelly Jackson Hardy.

- Yes, buy a lake house.

- From Princeton and CliftonLarsonAnderson.

Kelly, I want to thank you for coming on the show.

I wanna thank you for being a great friend and being honest with Emily and I on our finances.

And I know you do it for all your customers.

So you are a true representative coming out of Bradford, and we are very proud of you.

Small town girl makes it big, so congratulations.

Kelly, thank you very much.

- Thanks for having me, Rob.

- Everybody else, we'll catch you next time.

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