In this podcast episode, I welcome Eric Pierre, CPA and author of "The Great Tax Escape,".
Eric runs Pierre Accounting, with offices in Houston, Austin, San Diego, and Los Angeles. His Amazon bestselling book highlights how high earners can legally reduce their tax burden, challenges common misconceptions about tax planning, and shows how both business owners and W-2 employees earning $500,000+ can benefit from advanced tax strategies.
About Eric Pierre
- Second-generation CPA with licenses in Texas and California.
- Amazon bestselling author of "The Great Tax Escape".
- Stands out in the industry as part of the 1% of Black CPA firm owners.
Inside "The Great Tax Escape"
- Eric reveals how the tax code (40% longer than the Bible) contains hidden opportunities.
- He breaks down complex strategies for both W-2 employees and business owners, also demonstrates how charitable giving can double as tax strategy
- Eric shares how his clients use real estate and conservation easements legally.
How Eric Helps High Earners
- His "Redeem Team" of specialized tax professionals focuses on clients earning $500,000+ annually, turning tax code complexity into savings through court-tested strategies.
Looking Ahead
- Eric advises acting now on Roth conversions and preparing for major changes when Trump tax cuts sunset in the coming years.
- He emphasizes starting estate planning early, especially considering state-specific impacts that could significantly affect your wealth.
Bottom Line Making more money doesn't mean you have to pay more in taxes. With proper planning and the right team, you can legally reduce your tax burden while supporting causes you care about.
About Our Guest: Eric Pierre, CPA and author of "The Great Tax Escape,".
- You can learn more about his work:
https://www.greattaxescape.com
www.pierreaccounting.com
About Your Host: Paul G. McManus is an accomplished author and expert in helping financial professionals grow their businesses. With over eight years of experience working exclusively with financial professionals, Paul has helped his clients generate tens of millions of dollars in fees and commissions.
Claim your free audiobook copy at: www.theshortbookformula.com
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:04):
Good to see you, Eric .
Thank you, Paul.
How are you doing?
I'm doing fantastic.
Congratulations on your newbook.
I'm holding it up here I'm notsure if it's showing up or not.
I just got my copy and I justlove the look and feel of it.
I believe this is your firstbook to be published.
Speaker 2 (00:18):
Yes, it's my first book to be published.
Speaker 1 (00:20):
Congratulations.
Not only that, but you're nowan Amazon bestselling author.
Speaker 2 (00:30):
That must feel good.
Yeah, I just wish Amazon gavelike a fancy plaque, like
YouTube does, because they don'tgive us anything for that.
That would have been nice.
So if Jeff Bezos is listening,can I get a plaque?
Speaker 1 (00:35):
For anyone watching this.
The question that they're goingto have on their mind
immediately before we dive intothe book is what is that wall
behind you?
Speaker 2 (00:43):
That's a great question.
It's a sneaker wall, so I'm asneaker head.
I played basketball for a longtime in my life.
Growing up, my parents refusedto buy me those expensive
sneakers.
I guess I'm more than made upfor it.
But also I like to use this asa backdrop to remind people that
there's a variety of differentways to lower your taxes and not
(01:03):
everything looks and feels thesame, and that it's customized
for what your particularsituation is I like that.
Speaker 1 (01:08):
You're a CPA by trade .
Speaker 2 (01:10):
I'm a CPA by trade.
I'm actually a secondgeneration CPA.
My father, les Pierre, was thefirst CPA in my family.
He's now retired with my mother.
They'll be celebrating their46th anniversary December 30th.
He was licensed out of New York.
He worked corporate accountingmost of his career out here in
Houston and I'm licensed inTexas.
(01:31):
I'm also licensed in California.
My firm is Pierre Accounting.
We are in Houston, austin, sanDiego and Los Angeles.
Speaker 1 (01:40):
Very cool.
I think the first question Ihave for you is that if I think
of a CPA and I have a reallygood year, very rarely do they
say, hey, we're going to workwith you to reduce that tax bill
above and beyond what youshould pay, Instead of you've
had a good year, congratulations, now pay your taxes.
Personally, I don't like thatmessage.
And just what really strikes meabout your book one?
(02:02):
I love the title, which is theGreat Tax Escape.
I really love the subtitle,which is why making more money
doesn't mean you have to paymore in taxes, and that's, to me
, just such a novel idea thatimmediately my question is I
need to know more about this andwe'll get into this through the
course of this interview.
(02:22):
But just from a high level, howare you the same or different
from, I guess, what I would calla traditional CPA?
Speaker 2 (02:29):
A little, different for a few reasons.
I don't look like most CPAs Imentioned, I believe, in the
beginning of the book.
1% of CPA firm owners are Blackor African American.
I don't know what to callmyself these days.
I've always had to be different.
I'm also 6'8".
I just think life is too shortto make money and then give it
all to the government.
But the thing is that the taxcode itself has 40% more words
(02:53):
than the King James Bible, whichwe consider the longest book.
Right, there are a lot ofprovisions that the government
allows for you to mitigate yourtaxes.
I know people at church well,you have to pay to Caesar or to
Caesar, but Caesar allows you totake certain tax breaks and a
lot of the tax breaks andprovisions are there to create,
generate economic activity,whether for charitable
(03:14):
employment, et cetera, et cetera.
So a lot of people say they'resecrets.
In my book I mentioned thesecret playbook and should have
used that lighthearted.
It's a secret playbook becauseyou don't know it, but people
like me and my redeem team, weknow it and you don't have to be
the wealth of Jeff Bezos, elonMusk, damon John, lebron James
(03:35):
is a billionaire.
You don't have to be abillionaire to take advantage of
these tax breaks.
You just have to be willing towork with the people that know
these things.
These are legal.
Most of these things aresupported by tax opinion letters
if it's not directly coded, andthey're usually upheld by tax
court precedent or cases.
Speaker 1 (03:56):
I think a lot of business owners and
entrepreneurs, and just highincome owners generally, are
frustrated.
But why is your typical CPA nottelling their clients about the
secrets that you've uncoveredthrough tens of thousands of
pages of tax code that are all100% legal and are designed to
help high earners legally payless taxes?
(04:18):
Why is this not more commonlyknown information?
Speaker 2 (04:21):
Paul, that's a great question.
So there's a couple answers.
One most CPAs.
They're really good, we like tohelp people but we get
overwhelmed with the compliancework, and this time we just had
our tax filing deadline a weekago, today, at the day of
recording.
So tax season now is nine, 10months long and most CPAs are
focused on compliance work andthey're not well-resourced to
(04:44):
delegate the work and then freeup time to go work on your
business instead of working inyour business, right?
So that's one.
And then also in the book wereferenced whether it's tax
professionals and, excuse me, Idon't want to get too much in a
foray.
There seems to be propensitywhere CPAs tend to have
political views that if you'rerich, you should pay more than
(05:06):
your fair share, even though wementioned in the book, the top
50% earners pay 97% of taxes inthis country, so they are
actually paying their fair share.
I think there is some animositybecause most CPA firms are not
big like Deloitte.
Most CPAs.
They're either working forsmall firms that own boutique
(05:26):
shops and firms that run aboutique, and I think most of
them make, on gross revenue,$200,000 a year or a little less
.
And that's revenue, not income,gross revenue not necessarily
profit.
Right now the profit might beclose because a lot of those
firms the owner is usually doingthe work themselves.
Speaker 1 (05:43):
Okay, that's an interesting point that I haven't
heard before.
Which I find fascinating isthat, if I heard you correctly
and I know that you talked aboutin your book if you can expand
upon it is that it can come downto politics in the sense that
your traditional maybeRepublican will say is more for
lower taxes and your traditionalDemocrat is more for higher
taxes.
And so what I hear you sayingis that your CPA might just be
(06:04):
of the mindset that hey, you'veearned a lot of money, now you
should quote unquote pay yourfair share.
Speaker 2 (06:09):
Most CPAs and I hate saying this because I still
struggle with this Like most ofus, we're known for not being
good business people.
You can have the mindset ofpaying less taxes and not
necessarily be right leaning,because one thing, paul, I will
tell you I know people who willpost oh my gosh, pay your fair
share tax.
But then they're contacting mycolleagues like hey man, I made
three 400,000.
I don't want to pay 40%.
(06:30):
In the book we showed some ofthe names that are recognizable
people in my industry and aredecrying the rich, when the
reality is I read this the otherday 80% of the millionaires in
America are first-timemillionaires, meaning that they
didn't inherit it from theirfamily and they took risk to get
there.
Like I can tell for me, when Istarted my practice, I didn't
(06:52):
have a traditional path where Iwas in a firm and I took these
clients or I had money.
I was able to leverage my bankaccount to buy a practice and
buy my job.
I looked like Drake, startedfrom the bottom and now I'm here
and I've burned through a 401kof 150,000.
I almost didn't make it.
That's usually what mostentrepreneurs do and the tax
(07:13):
bill quite frankly rewardsentrepreneurs why they want
entrepreneurs to be successfulso that then they can hire more
people than tax the workers.
It sounds crass, but that'swhat it is.
And, by the way, for mycolleagues that brag about
Democratic people that areleft-leaning, some of the
biggest users of well-known taxbreaks, like Jack Ma, do things
like conservation easements.
(07:34):
He's left-leaning and he's usedreal estate tax strategies with
Amazon to expand all thesewarehouses and then not pay
taxes for many years usingseller depreciation, by the way
and he's very left-leaning.
Speaker 1 (07:45):
So expand upon that a little bit, because that's an
interesting tie-in.
So, for example, you had saidearlier that these are legal
because the Congress wrote theselaws.
Incentives to create certainbehaviors, and in the examples
that you just brought up with,say, Jeff Bezos, he's taken
advantage of incentives, butthey also align with say his
political leanings yes.
Speaker 2 (08:05):
And then Amazon is known for hiring.
They've created a lot of highpaying jobs.
When I go to my barber out infar West Houston I drive by a
massive Amazon warehouse.
That was never there because Igrew up in Katy.
And there's a big Amazonwarehouse in Katy and their
drivers making $150,000,$200,000 a year delivering
things that we use every day.
(08:28):
And, by the way, one example inthis very controversial is
conservation easement.
But if you understandconservation easement, a lot of
public parks we go to, golfcourses, beaches a lot of them
are actually throughconservation easements, where
the plan is set aside for thepublic use.
There's a lack of educationabout these things, which then
causes a resentment.
And before I go on, I thinkpart of the issue is that I
(08:51):
think people need to separatewhat people do with their money
that's necessary to make themimmoral, versus maybe you should
look at yourself and clean offwhat they're doing and then you
can get some of that money andthen you can make the impact in
your neighborhood.
And Jeff Bezos he's out therein his public life but he did
donate millions of dollars tobuild a museum in honor of the
late John Lewis, one of thecivil rights congressmen.
Speaker 1 (09:13):
So my takeaway from what you're saying is that,
whether you're left-leaning orright-leaning or anywhere in
between, there's tax incentivesthat will align with your values
, and so the through line isthat.
So who is your ideal reader and, by extension, who is your
(09:33):
ideal client?
Who are the people that youwork with day to day to help
them keep more of theirhard-earned money?
Speaker 2 (09:38):
I would say people clientele that make $500,000 or
more and that can include W-2.
That's the level where me andmy redeem team, where we work
best To take advantage of thosetax breaks often involves some
sort of financial investment andwe found that usually at that
income level they have some ofthe disposal income available.
(10:01):
Make those investments, investin the strategies that provide
the multiple to eithersignificantly lower their tax by
56, 7% or some years you canmake it zero.
Speaker 1 (10:10):
So $500,000 is typically the entry level to
really fully take advantage ofthese tax strategies.
And I think that kind of goesback to my earlier question.
Which is why probably a lot ofpeople are just unaware of these
things is that that's a fairlysmall percentage of the
population that earns that muchmoney.
Speaker 2 (10:27):
Yes, you probably talk about maybe 3% of
population.
Yeah, gemini says 2% ofpopulation, millionaires and up,
when you exclude the personalresidences, probably about three
or four.
Speaker 1 (10:36):
Yeah, and I heard you say a couple other things that
I want to dig into a littledeeper W-2s versus business
owners.
I don't know if it'smisconceptions or what, but a
lot of times W-2s, rightly orwrongly, that there's not tax
strategies for them.
Can you share a little bit moreabout that?
Speaker 2 (10:49):
Yeah, that's incorrect.
So W-2s, they're tax strategies.
Often there are limitations onsome of the strategies.
However, if you make over$500,000, for instance, I work
with a client of mine who wasW-2 for a really large tech
company and he made over amillion dollars in income His
total tax bill between federaland California working with us
(11:11):
was about $200, 200.
It's about 20% total.
20% total when he was in the50% cut line.
In fact he overpaid by a totalof around 300,000.
He's starting his own thing.
He'll get some money back to beable to invest into his startup
business.
Actually, you just have to workwith the right people that have
studied the code and also areproven.
(11:32):
So for me, I do keep a list ofreferences.
You actually can read to myreferences at the beginning of
the book.
One of my clients is adeveloper.
One of them is somebody that'svery famous that does get
substantial W-2.
That individual is on TV everySunday.
Speaker 1 (11:50):
For the purpose of book sales.
I have the book here but I amnot going to read the names.
You have to get the book toknow what we're talking about.
I also heard you mention a wordthe redeem team.
What is the redeem team?
Speaker 2 (12:01):
So the redeem team that's just my pet name for the
team of specialists that help meserve my high network clients
on these tax strategies.
There's a group of us some areCPAs, some are financial
advisors.
Some of them have differentlicenses, because there are far
more tax strategies than thereare sneakers behind me I have
(12:21):
over 200 total, by the way andso we get together, we vet these
strategies out.
They're highly scrutinized, andso then, depending on the
client, if you're one of thosehigh net worth people, I do
initial call to get anunderstanding of your income and
then what do you want?
Right?
Some people are very charitableminded.
(12:41):
Some people are like look, Ijust want to save a bunch of
cash so I can buy a car or buy ahouse or invest in this, and
I'm basically your bespoketailor when it comes to the tax
code.
And if you go to a tailor shop,in the back they have several
people working with them to dothe hemming and the sewing.
And so that's who I call theredeemed team, because these
people I consider my peers, so Iknow we've talked about a
(13:04):
number of things.
Speaker 1 (13:05):
Are there any common misconceptions or tax myths that
we haven't discussed so farthat you think our audience
should know about?
Speaker 2 (13:13):
Yes, one of them that I'll gladly discuss.
If I do an advanced taxstrategy, I'm going to be
audited.
The answer is not necessarily Idiscussed in the book.
The IRS has admitted a audit onaverage of maybe one of every
500 returns.
So again, with these advancedtax strategies, depending on
what they are.
So, for instance, I mentionedconservation easements earlier
(13:36):
because this one's been publiclytalked about, that one's
actually written in the code andso if you were to invest in
something like that, there's amultiple that they have to
follow.
Partnership NC has a file toreturn and you have to give the
appraisal with it.
Speaker 1 (13:58):
Now someone like Ted Turner.
He bought a bunch of land inMontana and used that to lower
his income when he owned TurnerNetworks.
A couple of points ofclarification.
A very basic one when you sayadvanced tax planning, what is
that, or how is that differentfrom just what people do year to
year?
How would you describe advancedtax planning?
Speaker 2 (14:13):
Advanced tax planning .
Part of it is you get togetherwith your tax professional or
strategist I'd say September orif you're about to do a
transaction and then you mayimplement, like accelerated
depreciation For some peoplethey just need they bought a $2
million building.
Depending on the bonusdepreciation they might be able
to get a million of it and I'veseen it.
It's legal.
A million dollar write-off.
Let's say they have $800,000 ofordinary income.
(14:35):
They're a qualified real estateprofessional.
That million dollar depreciateexpense puts their income down
to zero.
Speaker 1 (14:41):
So, from what I'm hearing you saying, it's
strategies that are typicallynot your cookie cutter the ones
Instagram.
Speaker 2 (14:48):
Hire your family, which you should do.
If you can talk about theaugusta rule, that's cookie
cutter because it's spelled outin there.
It's a good one, by the way,but these are things that you
hear over and over again.
Right, hire your family.
Max out your roth on that.
And I'm not knocking thesestrategies because I have a sep
I've used to.
Now what's advanced is that Ihave a sep that I used to invest
(15:10):
in a business investment.
I need to convert to Rothbefore they put distributions,
because then I can grow tax-freeand circumvent the Roth
limitation for income.
Speaker 1 (15:18):
So, just in terms of the people that your typical
high earner works with, I'mgoing to make an assumption here
is that they might have a CPA,they might have a financial
advisor.
Where do you fit into that?
Do you complement that or doyou essentially replace that in
terms of the work that you do?
Speaker 2 (15:34):
It depends.
I have a client that I workwith.
They have a CPA, but their CPAdoesn't do advanced so I just do
strategies for that client.
For other high network clientsI've replaced their CPA.
I'm not a licensed RIA so Idon't know.
I can tell them the taximplication of investment, but I
can't really tell them if it'sa good investment or not.
Speaker 1 (15:55):
In the book you talk about empowering financial
freedom, and how would youexpand upon that Just from your
general viewpoint?
How do you help them with theirfinancial freedom more broadly?
Speaker 2 (16:05):
It's going to depend on their objective right.
Some like to give a lot tocharity.
In the book I think we gave anexample of somebody that gave a
lot of money in their communityforwarding educational things.
I had a big year last yearbecause I saved on taxes, I was
able to provide on HBCU inAustin a nice generous
five-figure investment, able toprovide six-figure donation for
(16:27):
inner city causes in Chicagowhere I used to live.
What makes me unique was that Ialso live these things out.
I've been fortunate, by thegrace of God, that my business
grew to the point that I had touse these things.
Speaker 1 (16:38):
So you mentioned some charities and just
philosophically, or even justmore broadly speaking, when you
get into that really high incomespace, do you find that people
are naturally charitablyinclined, or does it go hand in
hand with some of the taxstrategies?
Speaker 2 (16:51):
Well, that's a great question.
I think it goes long hand inhand.
Some people with the strategyends up being more because they
weren't aware that, oh, I canmake this investment benefit,
this cost and lower my taxBecause normally like for
instance, we worked with a groupwhere there was a technology
for skin burn and people didn'tknow for every $1 you put in,
(17:13):
you're getting a 5 to 1 benefitand then that product actually
got FDA approved this past yearA lot of people are charitable
client but they don'tnecessarily know that their
money could be put becausetypically you think, okay, I got
to check United Way and thenyou never see it again, I don't
get much benefit.
Some people may not be trustingtheir churches, but if you show
(17:34):
them legitimate causes thatbenefit them, or even something
simple, and if you have a bigyear, you can set up a donor
advised fund, hold up yourschedule, a deduction and then
spread over five years.
Some people don't realize thatthey can actually load it up and
control it and spread it out.
It's just a lack of education,because I tend to believe in
humanity, that most people arekind and want to help.
They just don't always know how.
Speaker 1 (17:56):
You had mentioned earlier about, I think, one of
the greatest fears for any highincome earner it's I want to
keep more of my money.
I want to not run afoul of theIRS.
In addition to what we'vealready talked about, are there
any other misconceptions orthings that you can share with
us that allay any concerns aboutIRS audits?
What should people know aboutthat?
Speaker 2 (18:18):
If the IRS sends a notice about your tax return, it
doesn't necessarily meanthey're going to audit you off
the bat.
Sometimes they need moreinformation.
Sometimes these advancedsoftwares, there's these forms
that don't get attached Justbecause they audit you doesn't
mean that you're going to givemoney back.
I was audited by the IRS in2017.
The reason that they triggeredbecause at the time I didn't
(18:39):
have an office.
I was driving all over SanDiego.
So they said, sir, as anaccountant, your mileage was
awfully high.
You reported 25,000 miles.
Yes, I don't have an office.
I went to the IRS agent.
I used an app called Everlanceand I gave him a log this big.
They looked at it and said sir,we actually owe you money, but
(18:59):
we're not going to do it.
She was like what?
And the lady was so upset shethought she had me.
Speaker 1 (19:05):
So in your own case that happened, and was it as bad
as people fear?
Speaker 2 (19:08):
No, you just have to keep good documentation.
One of my high network clientsactually got a letter about a
strategy.
We sent the doc, they adjustedit and somehow he got an extra
$100,000.
Okay, he got a refund.
Speaker 1 (19:22):
I know that there's a difference between you in your
role and, say, an investmentadvisor in their role.
How do those things cometogether from your perspective
when it comes to retirementplanning?
Speaker 2 (19:31):
Under the retirement plan.
We can help show the impact,the tax savings, because you can
have your own when you have abusiness.
You can have your own definedbenefit plan.
You can have a solo 401k.
We can show you the numbers,the delta Now, how it grows, you
work with the advisor and howyou hold the asset.
But we can also educate you onhaving self-directed retirement
(19:52):
plans.
I used to work with a realestate developer.
I learned about theself-directed IRA when the
client had a constructioncompany and a lot of wealthy
people were using their IRAs toinvest into that company.
My real estate developerclients that make a lot of money
.
They have massive depreciation.
We might be able to convertsome of their regular IRA to
(20:12):
Roth, but the income with thetax comes with it might be wiped
out by some of our strategies.
So that's the difference toworking as strategists, because
regular CPM is to know you can'tdo that and I'm like there's
another way 100%.
Speaker 1 (20:24):
Anything else about retirement that we haven't
touched upon.
Speaker 2 (20:26):
If you're going to do a Roth conversion, I suggest
you might do it next year beforethe government starts to make
it harder to do.
Speaker 1 (20:32):
Tell me more about that.
Is that the Trump tax cuts?
Speaker 2 (20:34):
Yeah, part of it's that, and there's also talk,
depending on who's in office,that might be taken away.
I wouldn't waste time on that,because, in fact, you want to
make sure you get yourretirement planning airtight,
particularly wealth, because Ido believe in our lifetime that
you are going to see wealth tax,so you may want to get your
(20:54):
affairs in order, meaning tax onyour total wealth.
You make various proposalsabout carried interest tax,
increased capital gains with theTrump tax sun setting estate
tax thresholds drop down when wedo business California.
If a single person has $6million, that might be their
home.
That's not a lot of money inCalifornia and New York or now
South Florida the price of that.
Speaker 1 (21:13):
Next couple more questions, while I have you
Leaving a legacy.
I know we talked a little aboutcharities, and is there
anything else that you wouldshare with us about your book or
your message about leaving alegacy behind?
Speaker 2 (21:23):
You can also leave a legacy behind, like with a trust
.
Right, I have my own trust andthere's 30 or 40 different types
of trusts, so you want to getwith a state plan attorney, but
before you do that, you want toknow who you're going to leave
stuff behind for.
So I'm single.
I've never been married, soright now I have family members
and also have charitableorganizations that would inherit
(21:44):
my assets, because you don'tknow when you're going to die.
You should always have that.
And also another way that youcan for legacy is looking for
various life insurance policies.
There are policies out therethat aren't very expensive and
you can even have them set upwith irrevocable trust to make
the proceeds tax-free tobeneficiaries.
So everybody should look atthat.
(22:04):
Everybody can afford lifeinsurance.
It's heartbreaking to see howmany people don't have their
state set up.
There's a lack of financialeducation.
Speaker 1 (22:11):
Now I have a very important question for you.
If something were to happen toyou, who is inheriting that wall
of sneakers behind you?
Speaker 2 (22:17):
According to my will, it'd probably be my sister.
Speaker 1 (22:19):
Victoria, you might want to go ahead and sell them.
Final question For someone whowants to get a copy of your book
or to follow up with you whatare the best places for them to
either find your book or toreach out?
Speaker 2 (22:31):
To find my book, you can go on Amazon and type Great
Tax Escape.
Eric Pierre, we have a websitededicated for this book
greattaxescapecom.
You can follow the prompt.
There's instructions how to geta hold of me that way.
Or, if you want, you can alsogo through my firm's page,
pierreaccountingcom.
Perfect.
Speaker 1 (22:47):
Any final thoughts or takeaways before we wrap up
today's interview?
Speaker 2 (22:53):
I would say if you're making a lot of money, you
don't have to be stressed.
You can bask in the sunsetknowing that if you work with me
or someone like me, we can getyou to pay a lot less than 50%
total taxes.
Speaker 1 (23:03):
Just going back to the subtitle, why making more
money doesn't mean you have topay more in taxes is a truly
compelling message that everyhigh earner needs to know about.
Eric, thank you so much foryour time today.
I enjoyed the conversation.
Speaker 2 (23:16):
Thank you for having me, Paul.
Good to see you, Eric .
Thank you, Paul.
How are you doing?
I'm doing fantastic.
Congratulations on your newbook.
I'm holding it up here I'm notsure if it's showing up or not.
I just got my copy and I justlove the look and feel of it.
I believe this is your firstbook to be published.
Speaker 2 (00:18):
Yes, it's my first book to be published.
Speaker 1 (00:20):
Congratulations.
Not only that, but you're nowan Amazon bestselling author.
Speaker 2 (00:30):
That must feel good.
Yeah, I just wish Amazon gavelike a fancy plaque, like
YouTube does, because they don'tgive us anything for that.
That would have been nice.
So if Jeff Bezos is listening,can I get a plaque?
Speaker 1 (00:35):
For anyone watching this.
The question that they're goingto have on their mind
immediately before we dive intothe book is what is that wall
behind you?
Speaker 2 (00:43):
That's a great question.
It's a sneaker wall, so I'm asneaker head.
I played basketball for a longtime in my life.
Growing up, my parents refusedto buy me those expensive
sneakers.
I guess I'm more than made upfor it.
But also I like to use this asa backdrop to remind people that
there's a variety of differentways to lower your taxes and not
(01:03):
everything looks and feels thesame, and that it's customized
for what your particularsituation is I like that.
Speaker 1 (01:08):
You're a CPA by trade .
Speaker 2 (01:10):
I'm a CPA by trade.
I'm actually a secondgeneration CPA.
My father, les Pierre, was thefirst CPA in my family.
He's now retired with my mother.
They'll be celebrating their46th anniversary December 30th.
He was licensed out of New York.
He worked corporate accountingmost of his career out here in
Houston and I'm licensed inTexas.
(01:31):
I'm also licensed in California.
My firm is Pierre Accounting.
We are in Houston, austin, sanDiego and Los Angeles.
Speaker 1 (01:40):
Very cool.
I think the first question Ihave for you is that if I think
of a CPA and I have a reallygood year, very rarely do they
say, hey, we're going to workwith you to reduce that tax bill
above and beyond what youshould pay, Instead of you've
had a good year, congratulations, now pay your taxes.
Personally, I don't like thatmessage.
And just what really strikes meabout your book one?
(02:02):
I love the title, which is theGreat Tax Escape.
I really love the subtitle,which is why making more money
doesn't mean you have to paymore in taxes, and that's, to me
, just such a novel idea thatimmediately my question is I
need to know more about this andwe'll get into this through the
course of this interview.
(02:22):
But just from a high level, howare you the same or different
from, I guess, what I would calla traditional CPA?
Speaker 2 (02:29):
A little, different for a few reasons.
I don't look like most CPAs Imentioned, I believe, in the
beginning of the book.
1% of CPA firm owners are Blackor African American.
I don't know what to callmyself these days.
I've always had to be different.
I'm also 6'8".
I just think life is too shortto make money and then give it
all to the government.
But the thing is that the taxcode itself has 40% more words
(02:53):
than the King James Bible, whichwe consider the longest book.
Right, there are a lot ofprovisions that the government
allows for you to mitigate yourtaxes.
I know people at church well,you have to pay to Caesar or to
Caesar, but Caesar allows you totake certain tax breaks and a
lot of the tax breaks andprovisions are there to create,
generate economic activity,whether for charitable
(03:14):
employment, et cetera, et cetera.
So a lot of people say they'resecrets.
In my book I mentioned thesecret playbook and should have
used that lighthearted.
It's a secret playbook becauseyou don't know it, but people
like me and my redeem team, weknow it and you don't have to be
the wealth of Jeff Bezos, elonMusk, damon John, lebron James
(03:35):
is a billionaire.
You don't have to be abillionaire to take advantage of
these tax breaks.
You just have to be willing towork with the people that know
these things.
These are legal.
Most of these things aresupported by tax opinion letters
if it's not directly coded, andthey're usually upheld by tax
court precedent or cases.
Speaker 1 (03:56):
I think a lot of business owners and
entrepreneurs, and just highincome owners generally, are
frustrated.
But why is your typical CPA nottelling their clients about the
secrets that you've uncoveredthrough tens of thousands of
pages of tax code that are all100% legal and are designed to
help high earners legally payless taxes?
(04:18):
Why is this not more commonlyknown information?
Speaker 2 (04:21):
Paul, that's a great question.
So there's a couple answers.
One most CPAs.
They're really good, we like tohelp people but we get
overwhelmed with the compliancework, and this time we just had
our tax filing deadline a weekago, today, at the day of
recording.
So tax season now is nine, 10months long and most CPAs are
focused on compliance work andthey're not well-resourced to
(04:44):
delegate the work and then freeup time to go work on your
business instead of working inyour business, right?
So that's one.
And then also in the book wereferenced whether it's tax
professionals and, excuse me, Idon't want to get too much in a
foray.
There seems to be propensitywhere CPAs tend to have
political views that if you'rerich, you should pay more than
(05:06):
your fair share, even though wementioned in the book, the top
50% earners pay 97% of taxes inthis country, so they are
actually paying their fair share.
I think there is some animositybecause most CPA firms are not
big like Deloitte.
Most CPAs.
They're either working forsmall firms that own boutique
(05:26):
shops and firms that run aboutique, and I think most of
them make, on gross revenue,$200,000 a year or a little less
.
And that's revenue, not income,gross revenue not necessarily
profit.
Right now the profit might beclose because a lot of those
firms the owner is usually doingthe work themselves.
Speaker 1 (05:43):
Okay, that's an interesting point that I haven't
heard before.
Which I find fascinating isthat, if I heard you correctly
and I know that you talked aboutin your book if you can expand
upon it is that it can come downto politics in the sense that
your traditional maybeRepublican will say is more for
lower taxes and your traditionalDemocrat is more for higher
taxes.
And so what I hear you sayingis that your CPA might just be
(06:04):
of the mindset that hey, you'veearned a lot of money, now you
should quote unquote pay yourfair share.
Speaker 2 (06:09):
Most CPAs and I hate saying this because I still
struggle with this Like most ofus, we're known for not being
good business people.
You can have the mindset ofpaying less taxes and not
necessarily be right leaning,because one thing, paul, I will
tell you I know people who willpost oh my gosh, pay your fair
share tax.
But then they're contacting mycolleagues like hey man, I made
three 400,000.
I don't want to pay 40%.
(06:30):
In the book we showed some ofthe names that are recognizable
people in my industry and aredecrying the rich, when the
reality is I read this the otherday 80% of the millionaires in
America are first-timemillionaires, meaning that they
didn't inherit it from theirfamily and they took risk to get
there.
Like I can tell for me, when Istarted my practice, I didn't
(06:52):
have a traditional path where Iwas in a firm and I took these
clients or I had money.
I was able to leverage my bankaccount to buy a practice and
buy my job.
I looked like Drake, startedfrom the bottom and now I'm here
and I've burned through a 401kof 150,000.
I almost didn't make it.
That's usually what mostentrepreneurs do and the tax
(07:13):
bill quite frankly rewardsentrepreneurs why they want
entrepreneurs to be successfulso that then they can hire more
people than tax the workers.
It sounds crass, but that'swhat it is.
And, by the way, for mycolleagues that brag about
Democratic people that areleft-leaning, some of the
biggest users of well-known taxbreaks, like Jack Ma, do things
like conservation easements.
(07:34):
He's left-leaning and he's usedreal estate tax strategies with
Amazon to expand all thesewarehouses and then not pay
taxes for many years usingseller depreciation, by the way
and he's very left-leaning.
Speaker 1 (07:45):
So expand upon that a little bit, because that's an
interesting tie-in.
So, for example, you had saidearlier that these are legal
because the Congress wrote theselaws.
Incentives to create certainbehaviors, and in the examples
that you just brought up with,say, Jeff Bezos, he's taken
advantage of incentives, butthey also align with say his
political leanings yes.
Speaker 2 (08:05):
And then Amazon is known for hiring.
They've created a lot of highpaying jobs.
When I go to my barber out infar West Houston I drive by a
massive Amazon warehouse.
That was never there because Igrew up in Katy.
And there's a big Amazonwarehouse in Katy and their
drivers making $150,000,$200,000 a year delivering
things that we use every day.
(08:28):
And, by the way, one example inthis very controversial is
conservation easement.
But if you understandconservation easement, a lot of
public parks we go to, golfcourses, beaches a lot of them
are actually throughconservation easements, where
the plan is set aside for thepublic use.
There's a lack of educationabout these things, which then
causes a resentment.
And before I go on, I thinkpart of the issue is that I
(08:51):
think people need to separatewhat people do with their money
that's necessary to make themimmoral, versus maybe you should
look at yourself and clean offwhat they're doing and then you
can get some of that money andthen you can make the impact in
your neighborhood.
And Jeff Bezos he's out therein his public life but he did
donate millions of dollars tobuild a museum in honor of the
late John Lewis, one of thecivil rights congressmen.
Speaker 1 (09:13):
So my takeaway from what you're saying is that,
whether you're left-leaning orright-leaning or anywhere in
between, there's tax incentivesthat will align with your values
, and so the through line isthat.
So who is your ideal reader and, by extension, who is your
(09:33):
ideal client?
Who are the people that youwork with day to day to help
them keep more of theirhard-earned money?
Speaker 2 (09:38):
I would say people clientele that make $500,000 or
more and that can include W-2.
That's the level where me andmy redeem team, where we work
best To take advantage of thosetax breaks often involves some
sort of financial investment andwe found that usually at that
income level they have some ofthe disposal income available.
(10:01):
Make those investments, investin the strategies that provide
the multiple to eithersignificantly lower their tax by
56, 7% or some years you canmake it zero.
Speaker 1 (10:10):
So $500,000 is typically the entry level to
really fully take advantage ofthese tax strategies.
And I think that kind of goesback to my earlier question.
Which is why probably a lot ofpeople are just unaware of these
things is that that's a fairlysmall percentage of the
population that earns that muchmoney.
Speaker 2 (10:27):
Yes, you probably talk about maybe 3% of
population.
Yeah, gemini says 2% ofpopulation, millionaires and up,
when you exclude the personalresidences, probably about three
or four.
Speaker 1 (10:36):
Yeah, and I heard you say a couple other things that
I want to dig into a littledeeper W-2s versus business
owners.
I don't know if it'smisconceptions or what, but a
lot of times W-2s, rightly orwrongly, that there's not tax
strategies for them.
Can you share a little bit moreabout that?
Speaker 2 (10:49):
Yeah, that's incorrect.
So W-2s, they're tax strategies.
Often there are limitations onsome of the strategies.
However, if you make over$500,000, for instance, I work
with a client of mine who wasW-2 for a really large tech
company and he made over amillion dollars in income His
total tax bill between federaland California working with us
(11:11):
was about $200, 200.
It's about 20% total.
20% total when he was in the50% cut line.
In fact he overpaid by a totalof around 300,000.
He's starting his own thing.
He'll get some money back to beable to invest into his startup
business.
Actually, you just have to workwith the right people that have
studied the code and also areproven.
(11:32):
So for me, I do keep a list ofreferences.
You actually can read to myreferences at the beginning of
the book.
One of my clients is adeveloper.
One of them is somebody that'svery famous that does get
substantial W-2.
That individual is on TV everySunday.
Speaker 1 (11:50):
For the purpose of book sales.
I have the book here but I amnot going to read the names.
You have to get the book toknow what we're talking about.
I also heard you mention a wordthe redeem team.
What is the redeem team?
Speaker 2 (12:01):
So the redeem team that's just my pet name for the
team of specialists that help meserve my high network clients
on these tax strategies.
There's a group of us some areCPAs, some are financial
advisors.
Some of them have differentlicenses, because there are far
more tax strategies than thereare sneakers behind me I have
(12:21):
over 200 total, by the way andso we get together, we vet these
strategies out.
They're highly scrutinized, andso then, depending on the
client, if you're one of thosehigh net worth people, I do
initial call to get anunderstanding of your income and
then what do you want?
Right?
Some people are very charitableminded.
(12:41):
Some people are like look, Ijust want to save a bunch of
cash so I can buy a car or buy ahouse or invest in this, and
I'm basically your bespoketailor when it comes to the tax
code.
And if you go to a tailor shop,in the back they have several
people working with them to dothe hemming and the sewing.
And so that's who I call theredeemed team, because these
people I consider my peers, so Iknow we've talked about a
(13:04):
number of things.
Speaker 1 (13:05):
Are there any common misconceptions or tax myths that
we haven't discussed so farthat you think our audience
should know about?
Speaker 2 (13:13):
Yes, one of them that I'll gladly discuss.
If I do an advanced taxstrategy, I'm going to be
audited.
The answer is not necessarily Idiscussed in the book.
The IRS has admitted a audit onaverage of maybe one of every
500 returns.
So again, with these advancedtax strategies, depending on
what they are.
So, for instance, I mentionedconservation easements earlier
(13:36):
because this one's been publiclytalked about, that one's
actually written in the code andso if you were to invest in
something like that, there's amultiple that they have to
follow.
Partnership NC has a file toreturn and you have to give the
appraisal with it.
Speaker 1 (13:58):
Now someone like Ted Turner.
He bought a bunch of land inMontana and used that to lower
his income when he owned TurnerNetworks.
A couple of points ofclarification.
A very basic one when you sayadvanced tax planning, what is
that, or how is that differentfrom just what people do year to
year?
How would you describe advancedtax planning?
Speaker 2 (14:13):
Advanced tax planning .
Part of it is you get togetherwith your tax professional or
strategist I'd say September orif you're about to do a
transaction and then you mayimplement, like accelerated
depreciation For some peoplethey just need they bought a $2
million building.
Depending on the bonusdepreciation they might be able
to get a million of it and I'veseen it.
It's legal.
A million dollar write-off.
Let's say they have $800,000 ofordinary income.
(14:35):
They're a qualified real estateprofessional.
That million dollar depreciateexpense puts their income down
to zero.
Speaker 1 (14:41):
So, from what I'm hearing you saying, it's
strategies that are typicallynot your cookie cutter the ones
Instagram.
Speaker 2 (14:48):
Hire your family, which you should do.
If you can talk about theaugusta rule, that's cookie
cutter because it's spelled outin there.
It's a good one, by the way,but these are things that you
hear over and over again.
Right, hire your family.
Max out your roth on that.
And I'm not knocking thesestrategies because I have a sep
I've used to.
Now what's advanced is that Ihave a sep that I used to invest
(15:10):
in a business investment.
I need to convert to Rothbefore they put distributions,
because then I can grow tax-freeand circumvent the Roth
limitation for income.
Speaker 1 (15:18):
So, just in terms of the people that your typical
high earner works with, I'mgoing to make an assumption here
is that they might have a CPA,they might have a financial
advisor.
Where do you fit into that?
Do you complement that or doyou essentially replace that in
terms of the work that you do?
Speaker 2 (15:34):
It depends.
I have a client that I workwith.
They have a CPA, but their CPAdoesn't do advanced so I just do
strategies for that client.
For other high network clientsI've replaced their CPA.
I'm not a licensed RIA so Idon't know.
I can tell them the taximplication of investment, but I
can't really tell them if it'sa good investment or not.
Speaker 1 (15:55):
In the book you talk about empowering financial
freedom, and how would youexpand upon that Just from your
general viewpoint?
How do you help them with theirfinancial freedom more broadly?
Speaker 2 (16:05):
It's going to depend on their objective right.
Some like to give a lot tocharity.
In the book I think we gave anexample of somebody that gave a
lot of money in their communityforwarding educational things.
I had a big year last yearbecause I saved on taxes, I was
able to provide on HBCU inAustin a nice generous
five-figure investment, able toprovide six-figure donation for
(16:27):
inner city causes in Chicagowhere I used to live.
What makes me unique was that Ialso live these things out.
I've been fortunate, by thegrace of God, that my business
grew to the point that I had touse these things.
Speaker 1 (16:38):
So you mentioned some charities and just
philosophically, or even justmore broadly speaking, when you
get into that really high incomespace, do you find that people
are naturally charitablyinclined, or does it go hand in
hand with some of the taxstrategies?
Speaker 2 (16:51):
Well, that's a great question.
I think it goes long hand inhand.
Some people with the strategyends up being more because they
weren't aware that, oh, I canmake this investment benefit,
this cost and lower my taxBecause normally like for
instance, we worked with a groupwhere there was a technology
for skin burn and people didn'tknow for every $1 you put in,
(17:13):
you're getting a 5 to 1 benefitand then that product actually
got FDA approved this past yearA lot of people are charitable
client but they don'tnecessarily know that their
money could be put becausetypically you think, okay, I got
to check United Way and thenyou never see it again, I don't
get much benefit.
Some people may not be trustingtheir churches, but if you show
(17:34):
them legitimate causes thatbenefit them, or even something
simple, and if you have a bigyear, you can set up a donor
advised fund, hold up yourschedule, a deduction and then
spread over five years.
Some people don't realize thatthey can actually load it up and
control it and spread it out.
It's just a lack of education,because I tend to believe in
humanity, that most people arekind and want to help.
They just don't always know how.
Speaker 1 (17:56):
You had mentioned earlier about, I think, one of
the greatest fears for any highincome earner it's I want to
keep more of my money.
I want to not run afoul of theIRS.
In addition to what we'vealready talked about, are there
any other misconceptions orthings that you can share with
us that allay any concerns aboutIRS audits?
What should people know aboutthat?
Speaker 2 (18:18):
If the IRS sends a notice about your tax return, it
doesn't necessarily meanthey're going to audit you off
the bat.
Sometimes they need moreinformation.
Sometimes these advancedsoftwares, there's these forms
that don't get attached Justbecause they audit you doesn't
mean that you're going to givemoney back.
I was audited by the IRS in2017.
The reason that they triggeredbecause at the time I didn't
(18:39):
have an office.
I was driving all over SanDiego.
So they said, sir, as anaccountant, your mileage was
awfully high.
You reported 25,000 miles.
Yes, I don't have an office.
I went to the IRS agent.
I used an app called Everlanceand I gave him a log this big.
They looked at it and said sir,we actually owe you money, but
(18:59):
we're not going to do it.
She was like what?
And the lady was so upset shethought she had me.
Speaker 1 (19:05):
So in your own case that happened, and was it as bad
as people fear?
Speaker 2 (19:08):
No, you just have to keep good documentation.
One of my high network clientsactually got a letter about a
strategy.
We sent the doc, they adjustedit and somehow he got an extra
$100,000.
Okay, he got a refund.
Speaker 1 (19:22):
I know that there's a difference between you in your
role and, say, an investmentadvisor in their role.
How do those things cometogether from your perspective
when it comes to retirementplanning?
Speaker 2 (19:31):
Under the retirement plan.
We can help show the impact,the tax savings, because you can
have your own when you have abusiness.
You can have your own definedbenefit plan.
You can have a solo 401k.
We can show you the numbers,the delta Now, how it grows, you
work with the advisor and howyou hold the asset.
But we can also educate you onhaving self-directed retirement
(19:52):
plans.
I used to work with a realestate developer.
I learned about theself-directed IRA when the
client had a constructioncompany and a lot of wealthy
people were using their IRAs toinvest into that company.
My real estate developerclients that make a lot of money
.
They have massive depreciation.
We might be able to convertsome of their regular IRA to
(20:12):
Roth, but the income with thetax comes with it might be wiped
out by some of our strategies.
So that's the difference toworking as strategists, because
regular CPM is to know you can'tdo that and I'm like there's
another way 100%.
Speaker 1 (20:24):
Anything else about retirement that we haven't
touched upon.
Speaker 2 (20:26):
If you're going to do a Roth conversion, I suggest
you might do it next year beforethe government starts to make
it harder to do.
Speaker 1 (20:32):
Tell me more about that.
Is that the Trump tax cuts?
Speaker 2 (20:34):
Yeah, part of it's that, and there's also talk,
depending on who's in office,that might be taken away.
I wouldn't waste time on that,because, in fact, you want to
make sure you get yourretirement planning airtight,
particularly wealth, because Ido believe in our lifetime that
you are going to see wealth tax,so you may want to get your
(20:54):
affairs in order, meaning tax onyour total wealth.
You make various proposalsabout carried interest tax,
increased capital gains with theTrump tax sun setting estate
tax thresholds drop down when wedo business California.
If a single person has $6million, that might be their
home.
That's not a lot of money inCalifornia and New York or now
South Florida the price of that.
Speaker 1 (21:13):
Next couple more questions, while I have you
Leaving a legacy.
I know we talked a little aboutcharities, and is there
anything else that you wouldshare with us about your book or
your message about leaving alegacy behind?
Speaker 2 (21:23):
You can also leave a legacy behind, like with a trust
.
Right, I have my own trust andthere's 30 or 40 different types
of trusts, so you want to getwith a state plan attorney, but
before you do that, you want toknow who you're going to leave
stuff behind for.
So I'm single.
I've never been married, soright now I have family members
and also have charitableorganizations that would inherit
(21:44):
my assets, because you don'tknow when you're going to die.
You should always have that.
And also another way that youcan for legacy is looking for
various life insurance policies.
There are policies out therethat aren't very expensive and
you can even have them set upwith irrevocable trust to make
the proceeds tax-free tobeneficiaries.
So everybody should look atthat.
(22:04):
Everybody can afford lifeinsurance.
It's heartbreaking to see howmany people don't have their
state set up.
There's a lack of financialeducation.
Speaker 1 (22:11):
Now I have a very important question for you.
If something were to happen toyou, who is inheriting that wall
of sneakers behind you?
Speaker 2 (22:17):
According to my will, it'd probably be my sister.
Speaker 1 (22:19):
Victoria, you might want to go ahead and sell them.
Final question For someone whowants to get a copy of your book
or to follow up with you whatare the best places for them to
either find your book or toreach out?
Speaker 2 (22:31):
To find my book, you can go on Amazon and type Great
Tax Escape.
Eric Pierre, we have a websitededicated for this book
greattaxescapecom.
You can follow the prompt.
There's instructions how to geta hold of me that way.
Or, if you want, you can alsogo through my firm's page,
pierreaccountingcom.
Perfect.
Speaker 1 (22:47):
Any final thoughts or takeaways before we wrap up
today's interview?
Speaker 2 (22:53):
I would say if you're making a lot of money, you
don't have to be stressed.
You can bask in the sunsetknowing that if you work with me
or someone like me, we can getyou to pay a lot less than 50%
total taxes.
Speaker 1 (23:03):
Just going back to the subtitle, why making more
money doesn't mean you have topay more in taxes is a truly
compelling message that everyhigh earner needs to know about.
Eric, thank you so much foryour time today.
I enjoyed the conversation.
Speaker 2 (23:16):
Thank you for having me, Paul.
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Amy Robach & T.J. Holmes present: Aubrey O’Day, Covering the Diddy Trial
Introducing… Aubrey O’Day Diddy’s former protege, television personality, platinum selling music artist, Danity Kane alum Aubrey O’Day joins veteran journalists Amy Robach and TJ Holmes to provide a unique perspective on the trial that has captivated the attention of the nation. Join them throughout the trial as they discuss, debate, and dissect every detail, every aspect of the proceedings. Aubrey will offer her opinions and expertise, as only she is qualified to do given her first-hand knowledge. From her days on Making the Band, as she emerged as the breakout star, the truth of the situation would be the opposite of the glitz and glamour. Listen throughout every minute of the trial, for this exclusive coverage. Amy Robach and TJ Holmes present Aubrey O’Day, Covering the Diddy Trial, an iHeartRadio podcast.
Good Hang with Amy Poehler
Come hang with Amy Poehler. Each week on her podcast, she'll welcome celebrities and fun people to her studio. They'll share stories about their careers, mutual friends, shared enthusiasms, and most importantly, what's been making them laugh. This podcast is not about trying to make you better or giving advice. Amy just wants to have a good time.