March 22, 2025 • 38 mins
Episode Summary: In this March 2025 "State of the Union" address, Due Diligence Project founder Alex Sonkin joins host Paul G McManus to discuss the growth and achievements of their tax professional community. They explore how their network of 847 independent CPA firms collaborates to vet tax strategies for ultra-high-net-worth clients, delivering significant tax savings while maintaining compliance.
Key Topics Covered:
- Community Growth: How the DDP has built a nationwide network of experienced tax professionals who collectively review strategies
- Member Success Stories: The financial gains reported by member CPAs, with some generating 7-figure additional fees
- Investment Projects: Their involvement in film financing for movies featuring Sylvester Stallone and Mark Wahlberg
- Charitable Impact: How tax savings have funded the Mitchell Thorpe Foundation, providing medical care for 200 families with sick children
- AI and Tax Planning: Why human expertise still outperforms artificial intelligence in complex tax strategy development
- Tax System Perspectives: Their views on IRS practices and media representation of tax strategies
- Upcoming Events: Preview of the Due Diligence Project Summit on May 7, 2025
Featured Quotes: "For the last 30, 40 years, the computer geeks have ruled the world... The tax geeks are helping business owners eliminate costs, become more efficient, eliminate unnecessary tax, and then save that money to create more jobs." - Alex Sonkin
"We're a community of accountants. These are risk-averse people. We are not here to break laws. We're here to stay within the black and white lines." - Alex Sonkin
Resources Mentioned:
- The Due Diligence Project Summit: May 7, 2025 (9am PT/12pm ET)
- The Due Diligence Project Book: Featuring the "10 Pillars of Extraordinary Due Diligence"
- Website: www.duediligenceproject.com
This episode highlights the achievements of the Due Diligence Project community over the past year and provides insights into how their collective approach to tax strategy vetting continues to benefit wealthy clients and their communities.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:01):
Want to know how elite tax advisors win the due
diligence game to satisfy ultrahigh net worth clients who
expect the very best.
Welcome to the Due DiligenceProject Podcast, where you get a
chance to learn from the eliteCPAs, virtual family office
professionals and taxspecialists who are doing just
that.
We'll uncover their insidersecrets on how they are
(00:25):
dominating their competition,vetting new ideas and
supercharging their duediligence process to deliver
extraordinary results.
Bringing his 25 plus years ofexperience with top tax
professionals across the country, please welcome your host, alex
Sunkin.
Speaker 2 (00:45):
Please welcome your host, alex Sunkin.
I wanted to take a moment anddo this due diligence project
state of the union address withyou, just to share with our
entire global community andthose of you who are following
our community, who are kind ofon the fence about joining the
(01:06):
due diligence project or not,what's been happening inside the
Due Diligence Project, how ourcommunity has grown, how
independent members in ourcommunity have absolutely set
records the specialists, theresources on our platform,
including you.
Everyone is setting records interms of revenues, net income,
just the positioning of theirfirms in their marketplaces,
where they've not just becomeleaders, they're just dominating
(01:29):
their leadership position,separating themselves further
from their competition, wherethey look back and they can't
even see where their competitionis.
So we're really excited toreport just some progress and
records that we're setting,based on goals that we set many
years ago.
Speaker 3 (01:47):
And, for context, as we're recording this, it's March
2025.
And so, state of the Union, ifwe were to look back on the year
2024, and you mentioned anumber of different areas which
one would you like to dive infirst?
Speaker 2 (02:01):
We've grown our community first.
We've grown our community.
We've had as many as 847 firmsparticipate in our due diligence
project summit.
That means 847 independent CPAfirms representing every single
market across the country.
These are all CPAs or EAs whohave at least 10,000, many of
(02:23):
which have over 50,000 hours ofexperience in audit and tax
court.
So they're introducing theirfavorite resources tax attorneys
, specialists across every areaof tax planning to our community
, and every independent memberis vetting out each strategy,
ranking, rating each strategy,and so what we have is
(02:44):
cumulative, a lot of data points.
It's nice to show a strategy toone CPA, one attorney, but it's
better to show them to six 700independent CPAs and attorneys
who have at least 50,000 hoursof experience in audit and tax
court, so they can askmeaningful questions, get
meaningful answers and thenultimately dial into the tax
code and go.
Is this something that can bedefended in audit?
(03:06):
Is it going to go to audit?
What's the audit risk If itgoes to audit?
Is it going to go to tax court?
Do we want to implement astrategy?
Is there enough return on thisstrategy where the risk of audit
makes sense?
All of these calculations,essentially, are done by CPAs
and the cumulative structure.
(03:27):
We're able to rank and rateevery kind of idea, every
strategy out there, whether it'scost mitigation or tax
mitigation, and then have aportfolio of strategies that are
super sexy, that our CPAs vetout and then deliver to their
best clients and deliver massivevalue to their clients, which
the typical CPA, the average CPAthey haven't even seen 95% of
(03:52):
these strategies because they'reso inundated with producing tax
returns, financial statements,they have no idea how many pages
are in the tax code.
The tax code is constantlychanging.
They are involved in variousCPA associations but none of
these associations are goingdeep and wide into finding all
these different tax strategiesand really completing the due
(04:14):
diligence on each strategy,following the 10 pillars of
extraordinary due diligence, toreally find out is this thing
really going to stand up to anaudit or not?
Speaker 3 (04:31):
Yeah, now you said something tax strategies.
Speaker 2 (04:34):
and super sexy, those are not typically two phrases
that I hear together.
So like super sexy.
We're a community of tax, solet's just put it this way.
For the last 30, 40 years, thetax, the computer geeks, have
ruled the world the Microsofts,the Facebooks, the technology,
the Elon Musks, the Zuckerbergs,the Bill Gates of the world.
(04:55):
They have used leveragetechnology to create incredible
value and really deliver valueall around the world, leverage
the planet and create net worthsin the hundreds of billions of
dollars.
The tax geeks on the other sideare helping these business
owners some of which are notworth hundreds of billions of
dollars, they're just worthmillions of dollars or hundreds
(05:18):
of millions or tens of millionsto eliminate costs, become more
efficient, eliminate unnecessarytax and then save that money
and then create more jobs.
Become more efficient,eliminate unnecessary tax and
then save that money and thencreate more jobs, create more
charitable benefactors, make adifference in their communities.
And so these tax geeks arelooking at this tax code.
The tax code is how many pages?
(05:38):
No one knows.
Is it a million, is it 2million?
Is it a half a million?
Is it a quarter million?
I'm telling you, you can go tothe biggest CPA firms in the
country.
They have no clue how manypages are in the tax code.
No one knows.
If no one knows how many pagesthere are, how are they doing
tax planning?
(05:58):
The only way we know how to dothe tax planning is by having a
very the largest community oftax geeks.
Take this elephant and eat itone bite at a time as a
community, and as a community,we rip apart every strategy, put
it back together, rip it uplike engineers, pick it apart,
(06:19):
put it back together.
Take it apart, put it backtogether.
Is this, are any parts of thisstrategy going to violate any
sections of the tax code, ofwhich there are an infinite
number of pages?
So as a community, we look atthis and go is there anything?
The IRS is going to look atthis and look at the tax code
and see if there's a problem.
(06:40):
One, two, three, 10 CPAs maymiss something.
600 CPAs are probably not goingto miss something, and so we
count on having the largestindependent peer review
community to eliminate that riskand create the value.
That being said, no one isdoing what we're doing.
We have no competition.
People talk about due diligence,but they don't actually do it.
(07:00):
They do it as best they can,but they're limited by time and
resources, by how many phonecalls can they make, how many
answers to questions can theyget?
And so they have enough time toget maybe three, four data
points.
That's not enough to completedue diligence on a lot of this
stuff, because a lot ofinformation that's coming about
various strategies ismisinformation or bad
(07:23):
information coming fromsalespeople, coming from
mainstream media that isbasically trying to.
Unfortunately, we live in atime where mainstream media the
Doge report just proved thatmainstream media may or may not
be telling us the truth aboutcertain things.
They may or may not be fundedby interest groups that have a
(07:46):
position.
Speaker 3 (07:48):
You mean by our tax dollars.
Speaker 2 (07:50):
So this is all public information now.
But the thing is inside the duediligence project, when an
article comes out from Bloomberg, fortune or Forbes, we need to
look at that article and whenthey talk about tax, we go and
see who wrote this article.
Does that person have anyexperience?
Oh, they're an author for apublication with zero experience
(08:13):
in audit, with zero experiencein finance.
With zero, I mean they got aphone call from somebody.
So we have to take all thisinto account, show these ideas
to the experts and literallybring in the top attorneys, top
tax experts, top specialists inthe country and then really go
to the sources of where thisinformation is coming from and
when there's a question, we'rehandling these situations.
(08:35):
So someone needs to be theauthority on due diligence in
the realm of tax planning andthe due diligence project.
Just simply by building thelargest independent peer review
community of tax geeks, we'vebecome that place.
What does that mean?
What does that mean to yourlisteners?
What it means is CPAs who haveplugged into our system have
(08:57):
been setting records in terms ofdelivering value to their
millionaire, multimillionaire,centimillionaire, billionaire.
Even clients who are making$300,000 a year are able to save
significant tax dollars and usethose tax savings for
retirement or charitablecontributions to create jobs, to
(09:18):
make a difference in theircommunities.
And so, as a community of taxgeeks, we're delivering more and
more value every year and thebusiness owners that are
benefiting from it arebenefiting their communities,
and so America is becoming abetter place as a result of what
we're doing.
We now.
Last year we had over 40 CPAsthat earned at least $100,000 in
(09:41):
additional fees from bringingvalue through the due diligence
project.
We had multiple membersgenerate over seven figures in
fees.
We had a CPA generate over $2million in fees.
We have multiple, many CPAsgenerating over $300,000, over
$500,000 in additional feesbeyond what they're earning in
(10:03):
their practices.
So their practices are growingbecause they're delivering
incredible value to theirbiggest clients.
Those big clients are referringbigger clients to those firms.
They're able to charge feesbased on the value that they're
delivering because it's avalue-based structure.
So when they deliver value inthe form of cost savings and tax
savings, it's justified thatthey can charge slightly higher
(10:27):
fee.
So they're generating more feesfrom their clients.
They're generating more feesfrom the due diligence project.
Their lives are changing.
Their business owners' livesare changing because now they're
delivering strategies and costsavings and tax savings that are
making a significant differencein the lives of those business
owners.
Some of these business ownersare coming in with a million
dollar tax bill and they'releaving paying only $150,000 of
(10:52):
tax.
They're saving 85% of their taxbill in the process, or more.
This is significant stuff, sowe're really, really excited
about seeing that.
The other thing we're seeing iswe're seeing CPA firms transform
their businesses and becomeleaders in their communities and
(11:13):
start to partner with familyoffices with multiple
billionaires in that familyoffice.
How does that CPA firm get thatrelationship?
Because they positionthemselves as members of the due
diligence project.
They point to the fact thatthey have access to due
diligence that none of theircompetitors have access to.
They point to the value thatthey can contribute to these
(11:35):
family offices that are handlingbillionaires, multimillionaires
, multimillionaires, and theirCPA partners, their tax planning
partners, have no clue what thedue diligence project members
are even talking about, becausethey've never seen these
strategies before, becausethey've just been producing tax
returns, financial statementsand delivering value based on
(11:55):
the strategies that they'velearned over the last 30, 40
years, but they have no idea howmany pages are in the tax code.
They have no idea how manystrategies are in the tax code.
They don't have no idea howmany strategies in the tax code.
So we're really excited to justshare the growth of our tax
geek community and we believeit's really time for the tax
geek to take a role in oureconomy and take a much more
(12:17):
prevalent role, similar to therole that the computer geeks
have taken over the last 30, 40years, and we need to honor the
tax geeks have taken over thelast 34 years.
And we need to honor the taxgeeks because all you got to do,
paul I don't know if you'veever done this go Google the tax
code, the US tax code, and juststart reading it and you'll
gain a very special appreciationof what your CPA or your tax
(12:38):
advisor has to deal with tofigure out what's good, what's
better, what's best, becausethis is written in a way.
Speaker 3 (12:44):
So I'm going to challenge this Now.
Bear with me.
A couple of years ago I'd belike absolutely.
But now I can't just throw itinto AI and say tell me the page
count, tell me the 10 things Ineed to know.
How is AI impacting what you do?
Speaker 2 (12:54):
It's a great question .
So the Due Diligence Project isthe leader in our space.
We've actually been embedded inmultiple software systems, the
leading software systems thatuse AI, that help CPAs design
tax strategies, and so thereason the due diligence project
has been sought out andpartnered by these software
(13:16):
companies who are using AI isbecause, at the end of the day,
someone needs to program that AI, someone needs to set those
rules, needs to program that AI,someone needs to set those
rules.
And the top CPAs in the country, the top tax geeks in the
country, are still ahead of AIin this space by quite a lot,
because there's so many rules inthe tax code that no one has
(13:39):
yet programmed AI to really gothrough this.
So sometimes you'll actually alot of our members use the CPAs
in our network are using AI anda lot of people are trying to
use AI and they show us hey, Iput this in the chat GPT, here's
what gave me and we can see thechat GPT still way behind, way
(14:00):
behind what we're doing, becauseit has a lot of the basic
concepts, but some of the stuffis so molecular.
Eventually AI is going to catchup, okay, I don't doubt it.
I just still think we're a fewyears ahead.
I don't know how many yearsahead we are, but there's just
still a lot of creativity in thetax code.
(14:24):
There's a lot of things in thetax code that are incomplete,
where strategies can be built ontop of these incompletions and
until Congress passes new lawswhich is very difficult to do
what the IRS has been doing,instead of lobbying Congress to
pass laws to close some of theseopen-ended opportunities in the
(14:47):
tax code, is they just actuallycontact Fortune, forbes,
bloomberg and have them writearticles that scare the public
from doing these strategies,without actually changing the
law.
So, even though the strategiesare fully legal to do, they're
going to have a Bloomberg writean article saying this is a very
(15:08):
scary strategy, don't do it.
You're going to go to jail,even though you can't go to jail
because it's legal, completelylegal to do the strategy based
on the laws and the tax codeFound out.
So you have basicallymainstream media lying to the
public.
And who's finding this out?
We're looking at this thinggoing.
Here's what the law says.
Here's what this article says.
(15:29):
This article completelyviolates what's in the actual
tax code.
It's wild.
Speaker 3 (15:35):
It is wild and I have to get political at all.
It's like we're finding outthat through Doge, that these
government agencies are payingthe media for essentially
propaganda.
This hasn't come out that I'maware of, but I wouldn't be
surprised if we find out thatthe IRS is paying Bloomberg and
a lot of other companies toplant their story.
Speaker 2 (15:54):
Paul, you're part of the book that's out there called
the Due Diligence Project.
In the Due Diligence Projectbook are 10 pillars of
extraordinary due diligence.
How many times have you heardme do the 10 pillars
presentation that we've recorded?
And in the 10 pillars there's areason why there's 10 pillars
for extraordinary due diligencebecause we're human beings.
(16:17):
We are not perfect.
We have personal motivations.
We want to make more money forourselves.
We sometimes have conflicts.
What's the right thing to do?
The easiest thing to do is justto not do any due diligence and
say you did the due diligence.
Hey, I did the due diligence.
This is a bad program or thisis good to come to decide
(16:38):
something's good.
It's a lot of information.
You have to sift through a lotof information.
So sometimes you'll call anattorney and be like hey, hey,
what do you think about thisstrategy?
And they'll be like, no, thisstrategy is really bad.
It's really risky.
You shouldn't do this.
You're going to go to jail andeveryone's going to get shot in
jail.
Don't do it.
Wow, that's scary.
Let's not do this.
(16:59):
I just spoke to this attorney.
What's behind that?
Oh, the attorney's trying tosell us something else because
he's got a mortgage and he's gota kid at Harvard and they've
got bills to pay, so he'smotivated to make more money,
and so he doesn't want me tosell a competing program, he
wants me to sell his program.
Does that make any sense?
(17:19):
Of course it makes sense.
Speaker 3 (17:21):
It doesn't.
And just to your point earlier,what the due diligence project
community comes out with ishundreds of independent experts
are vetting these things, andyou've said this many times, or
I've heard you say it many timesbefore it's just that due
diligence, literally, thatallows for the best ideas to
come to the top, whereas in thisexample of the attorney, what's
(17:42):
he basing it on?
Well, either his self-interestor the fact that he's completely
unknowledgeable about thesethings.
Speaker 2 (17:51):
Well, and I think from the IRS's perspective it's
like they've been given amandate Go collect.
It's like police officers Gogive as many tickets as you can.
It's the end of the month.
You have to get your numbers tothis point Someone's going one
mile over the speed limit, justgive them a ticket.
You have to get your numbers tothis point.
Someone's going one mile overthe speed limit, just give them
a ticket.
We got to get our numbers up.
So the IRS has given a mandateGo get this many tax dollars,
(18:13):
because we're $36 trillion indebt, and just go get the money.
That's not what they'resupposed to be doing.
You know what I mean.
They're supposed to be helping,so at some point they crossed
the line to serving the Americanpublic, to let's go get the
money, and we need to raise asmuch money as possible and if
that means breaking the rules,we're going to operate like a
(18:35):
normal.
We're going to cut corners anddo all these things, but they're
doing it with our dollars,against the American people, and
they've lost their way.
So, without getting political,it is what it is.
That's why due diligence at theend of the day, that's why the
court system exists.
That's why we want to.
You know, if a strategy goes totax court, you know we're
(18:55):
seeing the IRS lose 12-0 incourt because they violated laws
.
That's how aggressive they'vebeen in raising money that
they're like we're going toviolate laws set forth by
Congress against the Americanpeople to raise the money that
we need to raise.
So something's been lost.
(19:19):
Regardless of that, it makesdue diligence even more
important, because if thatstrategy goes to tax court, a
judge is going to go here's whatit says in the tax code and
what you're doing, irs, is wrongand what the taxpayer is doing
is correct.
So the law is still the law andthat's why due diligence is
really important.
(19:40):
And having the largestindependent peer review
community of tax geeks, which isreally, you know, the IRS has a
bunch of people that are taxgeeks.
Are they better than ourcommunity?
That's in the private sector?
Because we have former IRSagents in our community as well.
People spent 30 years as an IRSagent.
They're in the private sector.
They've joined the duediligence project.
(20:01):
We're all looking at the samecode.
We're all looking at the samelaws.
We just want to find what's thetruth, what's good, what's
better, what's best, and we allwant to follow the law.
Speaker 3 (20:11):
I'm going to shift gears for a second.
So again we're here March 2025.
We've just had a presidentialelection.
Up until now, there was theidea that the Trump tax cuts
would expire.
Now it's like maybe, maybe not.
There's talk about, or not justtalk, but I think they're
actually downsizing or the IRSto some degree.
There's root talk I don't knowhow serious it is about
(20:33):
potentially getting rid of theIRS.
I mean, that's probably still alittle bit far-fetched.
But just kind of, if you wereto look into your crystal ball
and just kind of look at thefuture, what are some of your
predictions about, or theoriesabout, what's going to happen in
the near future, in 2020?
Speaker 2 (20:48):
Well, you know, part of our network, part of what we
do, is we have people that arein the lobby groups.
We have people inside thegovernment and I've had the
privilege of being able tocontact some of our members, are
building their own lobby groupsand working with Congress.
Some of our specialists havebeen part of lobby groups and
working with Congress.
Some of our specialists havebeen part of lobby groups for
(21:09):
various strategies, working withCongress, and so we want to
really know what the futureholds.
We don't know at this point,but here's the various scenarios
.
On one side, what Doge and Trumpand Musk are doing is just
exposing everything.
So they're exposing everything,and then the question is are
(21:30):
they actually going to be ableto do anything about it?
Are they actually going to beable to fire these people,
replace these people, cut thesecosts?
We don't know.
We don't know Now.
So the one scenario is they'reexposing all this, which is
going to create a naturalconflict in our country country,
because now the truth is out.
All of this waste, corruptionis out in the open.
(21:52):
What are we going to do aboutit?
If they don't do anything aboutit, that could create a lot of
conflict in the future and morefighting, and I have no idea how
this can get resolved.
The other scenario is they juststart firing all these people
and they replace all thesepeople in the government and
they actually cut these costs,which could lead to a little bit
(22:13):
of an economic downturn.
That's a lot of money that isno longer going into the economy
from the public sector and thatmeans there's going to be a
little transition, potentiallyjust a financial recession as a
function of that.
But the bottom line is the factthat the waste and the fraud
(22:35):
has been exposed is a huge thing.
Is it going to be positive ornegative?
I don't know.
It looks like it's positive forsome people.
For some people, it's very,very negative.
If you lost your income fromthis, that's very negative.
If you feel like our country isgoing to become more efficient
as a result of this, it's goingto be positive.
(22:55):
We don't know what the futureholds.
We just have to be prepared forall of the different
possibilities and we just hopeand pray that the country
becomes more efficient and putit in a better place and we can
rebuild our middle class and wecan start to produce things
again that were outsourced tobeing produced in all these
(23:17):
other countries.
Produce them in America, sothat our middle class can
actually have that life and beable to afford whatever they
need to afford without being atthe top, in the top 1%, which is
kind of where the economy hasbeen going for the last 20, 30
years.
Speaker 3 (23:35):
Yeah, I think pretty much to buy a you're in San
Diego.
I think to buy a decent placein San Diego, you probably, you
pretty much need to be in thetop 1% to be able to, and that's
that's the thing is.
Speaker 2 (23:47):
If you have manufacturing, if you have
manufacturing in our country,the managers, the senior
managers, all of the even peopleworking the manufacturing lines
should make enough money to beable to afford a home anywhere
in our country.
And that's the way it wasworking back in the 50s and
1950s, 1960s, when manufacturingwas done here in America.
(24:12):
So I think that's the idea,that's the dream.
When you outsourcemanufacturing, you're creating
leverage, where the owners arehere, the manufacturing's in
Mexico, china, somewhere else.
So you have all these workersout there, you have the owners
over here, there's an arbitrageand only the very, very few are
(24:34):
making money, and everyone elseand all the money's flowing in
these other countries and themiddle class is being created
somewhere else.
That makes no sense if you'rereally trying to grow an economy
that benefits America, where wewant that middle class to be
here, and that means themanufacturing has to be here.
Speaker 3 (24:54):
Yeah, what else so for the State of the Union?
What other topics are top ofmind for you at this point?
Speaker 2 (25:00):
Let's just talk about some success stories.
One of the strategies we haveis a really cool film deal.
It's a four to one filmstructure.
We were able to finance fivemovies last year.
Speaker 3 (25:11):
Okay.
Speaker 2 (25:11):
Which ones Alarum with Sylvester Stallone, light
Risk with Mel Gibson and MarkWahlberg, and you know that's
really cool.
So those of you you know thoseare some of the big names.
We did Rust with Alec Baldwinlast year.
(25:33):
Unfortunately there was amishap on set so that movie is
not out yet.
But what's cool is my familyand I watched Flight Risk with
Mark Wahlberg.
Turned out to be a pretty goodmovie and it's like, hey, our
community of CPAs funded thismovie, like we're all movie
producers.
Speaker 3 (25:50):
So was there any?
Speaker 2 (25:51):
cameo with you in it.
No, we're not in the movie.
But the cool thing, our CPAsblew out to the con film
festival.
Okay, A number of them areinvited to go out this May, and
so every May a number of ourCPAs fly out to the Cannes Film
Festival in France and go to theparties, go to the yacht
(26:12):
parties and actually participateand see in the bartering and
the buying and selling of themovies that are happening on the
back end in these globalmeetings.
And so, to make tax planningsexy, it's like our CPAs are now
getting in the film production.
Speaker 3 (26:30):
I was going to say that's a concrete example of
where you think tax funding notsexy, and then suddenly it's
like, oh, that's actually kindof cool.
Speaker 2 (26:39):
Right, and that's the thing is.
All of a sudden, someone who'sgot a huge tax bill is talking
about funding a movie with MarkWahlberg in it.
And now they own a movie withMark Wahlberg, right, you know,
instead of paying a half milliondollars of tax, they've saved
hundreds of thousands of dollarsand they own equity in a movie.
Yeah, that's awesome, right?
Or they could just write acheck to the government, lose
(27:01):
money, never see that moneyagain, have no equity in the
movie, still watch Flight Risk,enjoy it, not enjoy it, but not
have any ownership in it.
And that's less sexy, we wouldsay.
Speaker 3 (27:18):
Yeah, again trying not to be political, but after
you see all the things that ourgovernment's been spending money
on through what Doge isreporting, it's like those are
not the things that I want mytax dollars to guarantee.
I mean, I don't like payingtaxes, but if it's going to pay,
like building bridges and roads, okay, you know, I guess those
things are necessary.
Speaker 2 (27:34):
Right?
No, you know.
And the thing is, I don't wantto be political about any of
this either, because both sidescontributed, both sides Okay.
So this is not one side isdoing bad, one side is doing
good.
They're both bad.
Both sides, for the last 100years, have been treating this
(27:54):
country like their own littlepiggy bank, with zero oversight.
That is not okay.
If you and I did any of thisstuff and you would be in prison
in three seconds, no questionsasked, and all my assets would
be frozen, that's the bottomline.
Okay so, but the bottom line isour community.
(28:17):
We're not interested in risk,we're not interested in putting
ourselves in that position.
We're interested in staying.
We're a community ofaccountants.
These are risk averse people.
We are not here to break laws.
We're here to stay within theblack and white lines.
It's very, very important tothem.
It's very important to thebusiness owners that they serve,
(28:37):
very, very important to them.
It's very important to thebusiness owners that they serve.
And we're, like I said, we'rehere just to look at the tax
code and to find out what's inthere.
How do we make business ownersmore efficient?
Because another interestingpoint is we have a charity that
our CPAs and some of theirdonors have been supporting and
this charity is called theMitchell Thorpe Foundation, and
(29:04):
because of the work we've beendoing is we've donated over $300
million of total gifts to thischarity.
Those gifts are beingdistributed to the charity on a
yearly basis, where the charityreceives seven figures a year in
cash distributions and thatcash is funding over 200
families that have very, verysick children that are requiring
medical care that thosefamilies could not afford.
(29:25):
So prior to getting thesedistributions, the parents were
sitting home, couldn't afford togo to work.
The parents aren't doctors.
They're trying to take care oftheir sick children without any
ability to take care of theirsick children.
Now they're able to use medicalcare and basically apply to
Mitchell Thorpe.
Mitchell Thorpe says yes andjust pays their medical bills.
(29:46):
Because of our community of CPAscompleting due diligence on a
structure that is now deliveringseven figures of cash every
year to these 200 families,making a huge difference in
their lives.
We're very, very proud of that.
So you know we're doing a lotof different things across a lot
of different channels.
Some of it is sexy, likeproducing movies, and some of it
(30:07):
is meaningful, like making adifference in the life of a
16-year-old who has six monthsto live and we're going to make
that six months their best sixmonths ever and make that family
feel better.
We're trying to make adifference.
So there's a lot of benefitswhen we save money.
We don't know where alldifferent channels create
(30:29):
different opportunities, but weknow there's suffering in this
world.
We know money makes adifference and putting it in the
hands of various charitableorganizations, of business
owners, of people who are goingto make a difference with that,
at the end of the day, we trackall of that and we want to
create win-win-wins.
It's not just about helpingCPAs make more money or helping
(30:52):
the business owners save moremoney.
We're seeing, you know, on amulti-generational basis.
When that savings happens, itresults in other amazing things
in those communities and we'rejust sharing some of those
highlights.
Speaker 3 (31:07):
That's awesome.
Tell us about the upcoming DueDiligence Project Summit.
Speaker 2 (31:13):
Here's the thing We've every year we feel like
we've seen everything under thesun, because we're the due
diligence project, we're thecenter of the tax planning
universe.
We've seen every tax strategyand every year we see five new
strategies we've never heard of,and every year we're like, wow,
how the heck did they do that?
So last year, at the end of theyear, we found a new idea, a
(31:34):
new strategy that's soinnovative.
That is very similar to some ofthe things we've done before,
some of the things we reallylove in our program, but they've
taken those concepts and addeda couple different ideas to it
that basically completelychanged.
It's like an evolution.
It's a real evolution of taxplanning, financial planning.
(31:54):
And so what I like to say is ourcommunity is we're a bunch of
tax geeks where we're taking upthis hill and combining it with
finance bros and meeting at thevery, very tippy top of a
mountain where there's very theair is rare.
It's very high up there.
It's easier for us to take thetax geeks up there and teach
(32:16):
them the finance stuff.
If we try to take finance brosand teach them the tax stuff,
they get lost.
The learning curve of tax is sosteep.
It really takes.
It took me about seven, eight,nine years of being inside the
tax code before I was promoted.
From nothing you are totallyuseless to to you know very
(32:41):
little Like that's the learningcurve.
And then, from knowing verylittle, you become like
literally the top people in tax.
The people at the top of the taxmountain are so much smarter
than the average tax person.
They've gone up so high up thismountain.
No one wants to go up thismountain.
(33:01):
You can't breathe up there.
But I've interviewed thousandsof tax professionals and what I
can tell you is the true taxgeeks.
They're so curious, they keepclimbing.
They keep climbing when theoxygen runs out.
Their curiosity keeps going.
Everyone else stays down herebecause it's easy to breathe,
it's relaxing.
(33:22):
Oh, we already make a milliondollars a year.
Why do we have to learn moretax strategies?
Why do you need more taxstrategies?
Your firm's making a lot ofmoney.
Just pay your tax and be happy.
There's a lot of CPAs righthere.
Just pay your tax and be happy.
Who are these nut jobs thatkeep climbing the mountain?
Michael Jordan, kobe Bryant,larry Bird?
(33:46):
They're not satisfied being.
Oh, I'm already in the All-Stargame.
I'm already the best player inthe world.
No they're like there's a kidthat's going to watch me play
today.
That's never seen me play today.
That's never seen me play todayand I'm going to show what
Michael Jordan plays like.
So we're looking for theMichael Jordans, we're looking
for the Kobe Bryants who are notsatisfied, who don't see
(34:09):
themselves as being tax expert.
They see themselves being thebest in the world in what they
do and they're going to continueto push themselves from
curiosity, just from curiosity,because they don't want to see
like I don't want to see anotherfirm do due diligence better
than the due diligence project.
(34:29):
These cpas do not want to meetanother cpa that knows more than
them.
Yeah, that would be like kobebryant meeting another
basketball player that's gotskills.
He'd be like what?
No, no, no, no, no, no, noright, kobe had one guy that was
better than him, michael jordan, and he's like I'm gonna beat
(34:50):
this guy, I'm gonna beat thisguy, I'm gonna beat this guy and
he and he got so close.
He was the closest one everbecause he had one goal, one
site, and he was maniacal.
He was like I'm going to keepgoing until I get there and he
was the closest thing to it.
And those are the two guys thatare at the top of the food
chain.
Lebron fans, sorry, I don'tcare, but the point is that
(35:14):
analogy works and when you're anut job like Kobe, when you're a
nut job like Michael, whenyou're a nut job like Larry or
Magic, you just keep going.
You know LeBron can't getbetter, so he just uses the
media to try to tell us thathe's the best because he's
played the longest.
(35:34):
Whatever Great, everyone cansee that it's fine In the tax
planning world.
It's.
The results are going to showit.
It's all in the black andwhites, it's all in the bottom
line.
How much money did you saveyour business owners?
How much money did they make?
How much money did you save?
There's no.
We can clearly see who's doingthe best job.
(35:54):
Show me those tax returns.
When we look at tax returns ofthe Fortune 500 companies out
there, 18% are able to zero outtheir tax return.
82% of the Fortune 500companies with the top CPA firms
, law firm in the country haveno idea how to zero out their
tax return.
18% do it every single year.
(36:15):
So those 18% of tax planningfirms are running circles around
82% who really don't know whatthey're doing.
Who are the best CPA firms inthe world.
82% of the 500 most profitablecompanies in the world.
That's the difference betweenhaving Michael Jordan be your
(36:38):
two guard on your basketballteam versus some guy who shows
up at YMCA's on Saturday who'sreally good at playing
basketball.
That's your two guard.
Speaker 3 (36:50):
Thank you so much for your time today.
I am motivated, I am inspiredand I am looking forward to the
Due Diligence Project Summitcoming up in May.
We'll have the informationaround this and so can't wait to
see you there, alex.
I'll be presenting a course andI can't wait to see if we break
(37:10):
those numbers that we've had inthe past.
What was it?
847?
Speaker 2 (37:14):
Yeah, we're excited about the summit we need 848.
Speaker 3 (37:17):
848 or more.
Speaker 2 (37:19):
Yeah, the summit is super exciting.
You know, every year we dosomething different at the
summit.
The concept is the same.
We talk about, you know,world-class due diligence.
We talk about operating avirtual family office with
best-in-class resources at thehighest level, with
best-in-class resources at thehighest level, and then we
(37:42):
introduce a group of specialiststo talk about their tax
strategies.
We give you enough about thosetax strategies to wet your
whistle, get you excited and seeif you want to plug in and
learn more.
And it's been a reallywonderful event that we've been
doing for many, many years andwe're excited to do it.
May 7th, 2025, due DiligenceProject Summit.
I believe it starts at 9 amPacific time, 12 Eastern.
(38:04):
Don't miss it, we'll see youthere.
Thanks so much for doing this,paul.
I think this concludes the DueDiligence Project State of the
Union.
We got everyone up to speed andwe're getting ready for another
record-breaking year here in2025.
Speaker 1 (38:19):
Fantastic.
That's all for this episode ofthe Due Diligence Project
podcast.
Be sure to visit due diligenceproject dot com to access the
resources we have available forqualified CPAs and family office
leaders.
Our mission at the DueDiligence Project is to help you
deliver more significance andvalue to your very best clients,
while shifting your traditionalpractice into the firm of the
(38:42):
future.
Want to know how elite tax advisors win the due
diligence game to satisfy ultrahigh net worth clients who
expect the very best.
Welcome to the Due DiligenceProject Podcast, where you get a
chance to learn from the eliteCPAs, virtual family office
professionals and taxspecialists who are doing just
that.
We'll uncover their insidersecrets on how they are
(00:25):
dominating their competition,vetting new ideas and
supercharging their duediligence process to deliver
extraordinary results.
Bringing his 25 plus years ofexperience with top tax
professionals across the country, please welcome your host, alex
Sunkin.
Speaker 2 (00:45):
Please welcome your host, alex Sunkin.
I wanted to take a moment anddo this due diligence project
state of the union address withyou, just to share with our
entire global community andthose of you who are following
our community, who are kind ofon the fence about joining the
(01:06):
due diligence project or not,what's been happening inside the
Due Diligence Project, how ourcommunity has grown, how
independent members in ourcommunity have absolutely set
records the specialists, theresources on our platform,
including you.
Everyone is setting records interms of revenues, net income,
just the positioning of theirfirms in their marketplaces,
where they've not just becomeleaders, they're just dominating
(01:29):
their leadership position,separating themselves further
from their competition, wherethey look back and they can't
even see where their competitionis.
So we're really excited toreport just some progress and
records that we're setting,based on goals that we set many
years ago.
Speaker 3 (01:47):
And, for context, as we're recording this, it's March
2025.
And so, state of the Union, ifwe were to look back on the year
2024, and you mentioned anumber of different areas which
one would you like to dive infirst?
Speaker 2 (02:01):
We've grown our community first.
We've grown our community.
We've had as many as 847 firmsparticipate in our due diligence
project summit.
That means 847 independent CPAfirms representing every single
market across the country.
These are all CPAs or EAs whohave at least 10,000, many of
(02:23):
which have over 50,000 hours ofexperience in audit and tax
court.
So they're introducing theirfavorite resources tax attorneys
, specialists across every areaof tax planning to our community
, and every independent memberis vetting out each strategy,
ranking, rating each strategy,and so what we have is
(02:44):
cumulative, a lot of data points.
It's nice to show a strategy toone CPA, one attorney, but it's
better to show them to six 700independent CPAs and attorneys
who have at least 50,000 hoursof experience in audit and tax
court, so they can askmeaningful questions, get
meaningful answers and thenultimately dial into the tax
code and go.
Is this something that can bedefended in audit?
(03:06):
Is it going to go to audit?
What's the audit risk If itgoes to audit?
Is it going to go to tax court?
Do we want to implement astrategy?
Is there enough return on thisstrategy where the risk of audit
makes sense?
All of these calculations,essentially, are done by CPAs
and the cumulative structure.
(03:27):
We're able to rank and rateevery kind of idea, every
strategy out there, whether it'scost mitigation or tax
mitigation, and then have aportfolio of strategies that are
super sexy, that our CPAs vetout and then deliver to their
best clients and deliver massivevalue to their clients, which
the typical CPA, the average CPAthey haven't even seen 95% of
(03:52):
these strategies because they'reso inundated with producing tax
returns, financial statements,they have no idea how many pages
are in the tax code.
The tax code is constantlychanging.
They are involved in variousCPA associations but none of
these associations are goingdeep and wide into finding all
these different tax strategiesand really completing the due
(04:14):
diligence on each strategy,following the 10 pillars of
extraordinary due diligence, toreally find out is this thing
really going to stand up to anaudit or not?
Speaker 3 (04:31):
Yeah, now you said something tax strategies.
Speaker 2 (04:34):
and super sexy, those are not typically two phrases
that I hear together.
So like super sexy.
We're a community of tax, solet's just put it this way.
For the last 30, 40 years, thetax, the computer geeks, have
ruled the world the Microsofts,the Facebooks, the technology,
the Elon Musks, the Zuckerbergs,the Bill Gates of the world.
(04:55):
They have used leveragetechnology to create incredible
value and really deliver valueall around the world, leverage
the planet and create net worthsin the hundreds of billions of
dollars.
The tax geeks on the other sideare helping these business
owners some of which are notworth hundreds of billions of
dollars, they're just worthmillions of dollars or hundreds
(05:18):
of millions or tens of millionsto eliminate costs, become more
efficient, eliminate unnecessarytax and then save that money
and then create more jobs.
Become more efficient,eliminate unnecessary tax and
then save that money and thencreate more jobs, create more
charitable benefactors, make adifference in their communities.
And so these tax geeks arelooking at this tax code.
The tax code is how many pages?
(05:38):
No one knows.
Is it a million, is it 2million?
Is it a half a million?
Is it a quarter million?
I'm telling you, you can go tothe biggest CPA firms in the
country.
They have no clue how manypages are in the tax code.
No one knows.
If no one knows how many pagesthere are, how are they doing
tax planning?
(05:58):
The only way we know how to dothe tax planning is by having a
very the largest community oftax geeks.
Take this elephant and eat itone bite at a time as a
community, and as a community,we rip apart every strategy, put
it back together, rip it uplike engineers, pick it apart,
(06:19):
put it back together.
Take it apart, put it backtogether.
Is this, are any parts of thisstrategy going to violate any
sections of the tax code, ofwhich there are an infinite
number of pages?
So as a community, we look atthis and go is there anything?
The IRS is going to look atthis and look at the tax code
and see if there's a problem.
(06:40):
One, two, three, 10 CPAs maymiss something.
600 CPAs are probably not goingto miss something, and so we
count on having the largestindependent peer review
community to eliminate that riskand create the value.
That being said, no one isdoing what we're doing.
We have no competition.
People talk about due diligence,but they don't actually do it.
(07:00):
They do it as best they can,but they're limited by time and
resources, by how many phonecalls can they make, how many
answers to questions can theyget?
And so they have enough time toget maybe three, four data
points.
That's not enough to completedue diligence on a lot of this
stuff, because a lot ofinformation that's coming about
various strategies ismisinformation or bad
(07:23):
information coming fromsalespeople, coming from
mainstream media that isbasically trying to.
Unfortunately, we live in atime where mainstream media the
Doge report just proved thatmainstream media may or may not
be telling us the truth aboutcertain things.
They may or may not be fundedby interest groups that have a
(07:46):
position.
Speaker 3 (07:48):
You mean by our tax dollars.
Speaker 2 (07:50):
So this is all public information now.
But the thing is inside the duediligence project, when an
article comes out from Bloomberg, fortune or Forbes, we need to
look at that article and whenthey talk about tax, we go and
see who wrote this article.
Does that person have anyexperience?
Oh, they're an author for apublication with zero experience
(08:13):
in audit, with zero experiencein finance.
With zero, I mean they got aphone call from somebody.
So we have to take all thisinto account, show these ideas
to the experts and literallybring in the top attorneys, top
tax experts, top specialists inthe country and then really go
to the sources of where thisinformation is coming from and
when there's a question, we'rehandling these situations.
(08:35):
So someone needs to be theauthority on due diligence in
the realm of tax planning andthe due diligence project.
Just simply by building thelargest independent peer review
community of tax geeks, we'vebecome that place.
What does that mean?
What does that mean to yourlisteners?
What it means is CPAs who haveplugged into our system have
(08:57):
been setting records in terms ofdelivering value to their
millionaire, multimillionaire,centimillionaire, billionaire.
Even clients who are making$300,000 a year are able to save
significant tax dollars and usethose tax savings for
retirement or charitablecontributions to create jobs, to
(09:18):
make a difference in theircommunities.
And so, as a community of taxgeeks, we're delivering more and
more value every year and thebusiness owners that are
benefiting from it arebenefiting their communities,
and so America is becoming abetter place as a result of what
we're doing.
We now.
Last year we had over 40 CPAsthat earned at least $100,000 in
(09:41):
additional fees from bringingvalue through the due diligence
project.
We had multiple membersgenerate over seven figures in
fees.
We had a CPA generate over $2million in fees.
We have multiple, many CPAsgenerating over $300,000, over
$500,000 in additional feesbeyond what they're earning in
(10:03):
their practices.
So their practices are growingbecause they're delivering
incredible value to theirbiggest clients.
Those big clients are referringbigger clients to those firms.
They're able to charge feesbased on the value that they're
delivering because it's avalue-based structure.
So when they deliver value inthe form of cost savings and tax
savings, it's justified thatthey can charge slightly higher
(10:27):
fee.
So they're generating more feesfrom their clients.
They're generating more feesfrom the due diligence project.
Their lives are changing.
Their business owners' livesare changing because now they're
delivering strategies and costsavings and tax savings that are
making a significant differencein the lives of those business
owners.
Some of these business ownersare coming in with a million
dollar tax bill and they'releaving paying only $150,000 of
(10:52):
tax.
They're saving 85% of their taxbill in the process, or more.
This is significant stuff, sowe're really, really excited
about seeing that.
The other thing we're seeing iswe're seeing CPA firms transform
their businesses and becomeleaders in their communities and
(11:13):
start to partner with familyoffices with multiple
billionaires in that familyoffice.
How does that CPA firm get thatrelationship?
Because they positionthemselves as members of the due
diligence project.
They point to the fact thatthey have access to due
diligence that none of theircompetitors have access to.
They point to the value thatthey can contribute to these
(11:35):
family offices that are handlingbillionaires, multimillionaires
, multimillionaires, and theirCPA partners, their tax planning
partners, have no clue what thedue diligence project members
are even talking about, becausethey've never seen these
strategies before, becausethey've just been producing tax
returns, financial statementsand delivering value based on
(11:55):
the strategies that they'velearned over the last 30, 40
years, but they have no idea howmany pages are in the tax code.
They have no idea how manystrategies are in the tax code.
They don't have no idea howmany strategies in the tax code.
So we're really excited to justshare the growth of our tax
geek community and we believeit's really time for the tax
geek to take a role in oureconomy and take a much more
(12:17):
prevalent role, similar to therole that the computer geeks
have taken over the last 30, 40years, and we need to honor the
tax geeks have taken over thelast 34 years.
And we need to honor the taxgeeks because all you got to do,
paul I don't know if you'veever done this go Google the tax
code, the US tax code, and juststart reading it and you'll
gain a very special appreciationof what your CPA or your tax
(12:38):
advisor has to deal with tofigure out what's good, what's
better, what's best, becausethis is written in a way.
Speaker 3 (12:44):
So I'm going to challenge this Now.
Bear with me.
A couple of years ago I'd belike absolutely.
But now I can't just throw itinto AI and say tell me the page
count, tell me the 10 things Ineed to know.
How is AI impacting what you do?
Speaker 2 (12:54):
It's a great question .
So the Due Diligence Project isthe leader in our space.
We've actually been embedded inmultiple software systems, the
leading software systems thatuse AI, that help CPAs design
tax strategies, and so thereason the due diligence project
has been sought out andpartnered by these software
(13:16):
companies who are using AI isbecause, at the end of the day,
someone needs to program that AI, someone needs to set those
rules, needs to program that AI,someone needs to set those
rules.
And the top CPAs in the country, the top tax geeks in the
country, are still ahead of AIin this space by quite a lot,
because there's so many rules inthe tax code that no one has
(13:39):
yet programmed AI to really gothrough this.
So sometimes you'll actually alot of our members use the CPAs
in our network are using AI anda lot of people are trying to
use AI and they show us hey, Iput this in the chat GPT, here's
what gave me and we can see thechat GPT still way behind, way
(14:00):
behind what we're doing, becauseit has a lot of the basic
concepts, but some of the stuffis so molecular.
Eventually AI is going to catchup, okay, I don't doubt it.
I just still think we're a fewyears ahead.
I don't know how many yearsahead we are, but there's just
still a lot of creativity in thetax code.
(14:24):
There's a lot of things in thetax code that are incomplete,
where strategies can be built ontop of these incompletions and
until Congress passes new lawswhich is very difficult to do
what the IRS has been doing,instead of lobbying Congress to
pass laws to close some of theseopen-ended opportunities in the
(14:47):
tax code, is they just actuallycontact Fortune, forbes,
bloomberg and have them writearticles that scare the public
from doing these strategies,without actually changing the
law.
So, even though the strategiesare fully legal to do, they're
going to have a Bloomberg writean article saying this is a very
(15:08):
scary strategy, don't do it.
You're going to go to jail,even though you can't go to jail
because it's legal, completelylegal to do the strategy based
on the laws and the tax codeFound out.
So you have basicallymainstream media lying to the
public.
And who's finding this out?
We're looking at this thinggoing.
Here's what the law says.
Here's what this article says.
(15:29):
This article completelyviolates what's in the actual
tax code.
It's wild.
Speaker 3 (15:35):
It is wild and I have to get political at all.
It's like we're finding outthat through Doge, that these
government agencies are payingthe media for essentially
propaganda.
This hasn't come out that I'maware of, but I wouldn't be
surprised if we find out thatthe IRS is paying Bloomberg and
a lot of other companies toplant their story.
Speaker 2 (15:54):
Paul, you're part of the book that's out there called
the Due Diligence Project.
In the Due Diligence Projectbook are 10 pillars of
extraordinary due diligence.
How many times have you heardme do the 10 pillars
presentation that we've recorded?
And in the 10 pillars there's areason why there's 10 pillars
for extraordinary due diligencebecause we're human beings.
(16:17):
We are not perfect.
We have personal motivations.
We want to make more money forourselves.
We sometimes have conflicts.
What's the right thing to do?
The easiest thing to do is justto not do any due diligence and
say you did the due diligence.
Hey, I did the due diligence.
This is a bad program or thisis good to come to decide
(16:38):
something's good.
It's a lot of information.
You have to sift through a lotof information.
So sometimes you'll call anattorney and be like hey, hey,
what do you think about thisstrategy?
And they'll be like, no, thisstrategy is really bad.
It's really risky.
You shouldn't do this.
You're going to go to jail andeveryone's going to get shot in
jail.
Don't do it.
Wow, that's scary.
Let's not do this.
(16:59):
I just spoke to this attorney.
What's behind that?
Oh, the attorney's trying tosell us something else because
he's got a mortgage and he's gota kid at Harvard and they've
got bills to pay, so he'smotivated to make more money,
and so he doesn't want me tosell a competing program, he
wants me to sell his program.
Does that make any sense?
(17:19):
Of course it makes sense.
Speaker 3 (17:21):
It doesn't.
And just to your point earlier,what the due diligence project
community comes out with ishundreds of independent experts
are vetting these things, andyou've said this many times, or
I've heard you say it many timesbefore it's just that due
diligence, literally, thatallows for the best ideas to
come to the top, whereas in thisexample of the attorney, what's
(17:42):
he basing it on?
Well, either his self-interestor the fact that he's completely
unknowledgeable about thesethings.
Speaker 2 (17:51):
Well, and I think from the IRS's perspective it's
like they've been given amandate Go collect.
It's like police officers Gogive as many tickets as you can.
It's the end of the month.
You have to get your numbers tothis point Someone's going one
mile over the speed limit, justgive them a ticket.
You have to get your numbers tothis point.
Someone's going one mile overthe speed limit, just give them
a ticket.
We got to get our numbers up.
So the IRS has given a mandateGo get this many tax dollars,
(18:13):
because we're $36 trillion indebt, and just go get the money.
That's not what they'resupposed to be doing.
You know what I mean.
They're supposed to be helping,so at some point they crossed
the line to serving the Americanpublic, to let's go get the
money, and we need to raise asmuch money as possible and if
that means breaking the rules,we're going to operate like a
(18:35):
normal.
We're going to cut corners anddo all these things, but they're
doing it with our dollars,against the American people, and
they've lost their way.
So, without getting political,it is what it is.
That's why due diligence at theend of the day, that's why the
court system exists.
That's why we want to.
You know, if a strategy goes totax court, you know we're
(18:55):
seeing the IRS lose 12-0 incourt because they violated laws
.
That's how aggressive they'vebeen in raising money that
they're like we're going toviolate laws set forth by
Congress against the Americanpeople to raise the money that
we need to raise.
So something's been lost.
(19:19):
Regardless of that, it makesdue diligence even more
important, because if thatstrategy goes to tax court, a
judge is going to go here's whatit says in the tax code and
what you're doing, irs, is wrongand what the taxpayer is doing
is correct.
So the law is still the law andthat's why due diligence is
really important.
(19:40):
And having the largestindependent peer review
community of tax geeks, which isreally, you know, the IRS has a
bunch of people that are taxgeeks.
Are they better than ourcommunity?
That's in the private sector?
Because we have former IRSagents in our community as well.
People spent 30 years as an IRSagent.
They're in the private sector.
They've joined the duediligence project.
(20:01):
We're all looking at the samecode.
We're all looking at the samelaws.
We just want to find what's thetruth, what's good, what's
better, what's best, and we allwant to follow the law.
Speaker 3 (20:11):
I'm going to shift gears for a second.
So again we're here March 2025.
We've just had a presidentialelection.
Up until now, there was theidea that the Trump tax cuts
would expire.
Now it's like maybe, maybe not.
There's talk about, or not justtalk, but I think they're
actually downsizing or the IRSto some degree.
There's root talk I don't knowhow serious it is about
(20:33):
potentially getting rid of theIRS.
I mean, that's probably still alittle bit far-fetched.
But just kind of, if you wereto look into your crystal ball
and just kind of look at thefuture, what are some of your
predictions about, or theoriesabout, what's going to happen in
the near future, in 2020?
Speaker 2 (20:48):
Well, you know, part of our network, part of what we
do, is we have people that arein the lobby groups.
We have people inside thegovernment and I've had the
privilege of being able tocontact some of our members, are
building their own lobby groupsand working with Congress.
Some of our specialists havebeen part of lobby groups and
working with Congress.
Some of our specialists havebeen part of lobby groups for
(21:09):
various strategies, working withCongress, and so we want to
really know what the futureholds.
We don't know at this point,but here's the various scenarios
.
On one side, what Doge and Trumpand Musk are doing is just
exposing everything.
So they're exposing everything,and then the question is are
(21:30):
they actually going to be ableto do anything about it?
Are they actually going to beable to fire these people,
replace these people, cut thesecosts?
We don't know.
We don't know Now.
So the one scenario is they'reexposing all this, which is
going to create a naturalconflict in our country country,
because now the truth is out.
All of this waste, corruptionis out in the open.
(21:52):
What are we going to do aboutit?
If they don't do anything aboutit, that could create a lot of
conflict in the future and morefighting, and I have no idea how
this can get resolved.
The other scenario is they juststart firing all these people
and they replace all thesepeople in the government and
they actually cut these costs,which could lead to a little bit
(22:13):
of an economic downturn.
That's a lot of money that isno longer going into the economy
from the public sector and thatmeans there's going to be a
little transition, potentiallyjust a financial recession as a
function of that.
But the bottom line is the factthat the waste and the fraud
(22:35):
has been exposed is a huge thing.
Is it going to be positive ornegative?
I don't know.
It looks like it's positive forsome people.
For some people, it's very,very negative.
If you lost your income fromthis, that's very negative.
If you feel like our country isgoing to become more efficient
as a result of this, it's goingto be positive.
(22:55):
We don't know what the futureholds.
We just have to be prepared forall of the different
possibilities and we just hopeand pray that the country
becomes more efficient and putit in a better place and we can
rebuild our middle class and wecan start to produce things
again that were outsourced tobeing produced in all these
(23:17):
other countries.
Produce them in America, sothat our middle class can
actually have that life and beable to afford whatever they
need to afford without being atthe top, in the top 1%, which is
kind of where the economy hasbeen going for the last 20, 30
years.
Speaker 3 (23:35):
Yeah, I think pretty much to buy a you're in San
Diego.
I think to buy a decent placein San Diego, you probably, you
pretty much need to be in thetop 1% to be able to, and that's
that's the thing is.
Speaker 2 (23:47):
If you have manufacturing, if you have
manufacturing in our country,the managers, the senior
managers, all of the even peopleworking the manufacturing lines
should make enough money to beable to afford a home anywhere
in our country.
And that's the way it wasworking back in the 50s and
1950s, 1960s, when manufacturingwas done here in America.
(24:12):
So I think that's the idea,that's the dream.
When you outsourcemanufacturing, you're creating
leverage, where the owners arehere, the manufacturing's in
Mexico, china, somewhere else.
So you have all these workersout there, you have the owners
over here, there's an arbitrageand only the very, very few are
(24:34):
making money, and everyone elseand all the money's flowing in
these other countries and themiddle class is being created
somewhere else.
That makes no sense if you'rereally trying to grow an economy
that benefits America, where wewant that middle class to be
here, and that means themanufacturing has to be here.
Speaker 3 (24:54):
Yeah, what else so for the State of the Union?
What other topics are top ofmind for you at this point?
Speaker 2 (25:00):
Let's just talk about some success stories.
One of the strategies we haveis a really cool film deal.
It's a four to one filmstructure.
We were able to finance fivemovies last year.
Speaker 3 (25:11):
Okay.
Speaker 2 (25:11):
Which ones Alarum with Sylvester Stallone, light
Risk with Mel Gibson and MarkWahlberg, and you know that's
really cool.
So those of you you know thoseare some of the big names.
We did Rust with Alec Baldwinlast year.
(25:33):
Unfortunately there was amishap on set so that movie is
not out yet.
But what's cool is my familyand I watched Flight Risk with
Mark Wahlberg.
Turned out to be a pretty goodmovie and it's like, hey, our
community of CPAs funded thismovie, like we're all movie
producers.
Speaker 3 (25:50):
So was there any?
Speaker 2 (25:51):
cameo with you in it.
No, we're not in the movie.
But the cool thing, our CPAsblew out to the con film
festival.
Okay, A number of them areinvited to go out this May, and
so every May a number of ourCPAs fly out to the Cannes Film
Festival in France and go to theparties, go to the yacht
(26:12):
parties and actually participateand see in the bartering and
the buying and selling of themovies that are happening on the
back end in these globalmeetings.
And so, to make tax planningsexy, it's like our CPAs are now
getting in the film production.
Speaker 3 (26:30):
I was going to say that's a concrete example of
where you think tax funding notsexy, and then suddenly it's
like, oh, that's actually kindof cool.
Speaker 2 (26:39):
Right, and that's the thing is.
All of a sudden, someone who'sgot a huge tax bill is talking
about funding a movie with MarkWahlberg in it.
And now they own a movie withMark Wahlberg, right, you know,
instead of paying a half milliondollars of tax, they've saved
hundreds of thousands of dollarsand they own equity in a movie.
Yeah, that's awesome, right?
Or they could just write acheck to the government, lose
(27:01):
money, never see that moneyagain, have no equity in the
movie, still watch Flight Risk,enjoy it, not enjoy it, but not
have any ownership in it.
And that's less sexy, we wouldsay.
Speaker 3 (27:18):
Yeah, again trying not to be political, but after
you see all the things that ourgovernment's been spending money
on through what Doge isreporting, it's like those are
not the things that I want mytax dollars to guarantee.
I mean, I don't like payingtaxes, but if it's going to pay,
like building bridges and roads, okay, you know, I guess those
things are necessary.
Speaker 2 (27:34):
Right?
No, you know.
And the thing is, I don't wantto be political about any of
this either, because both sidescontributed, both sides Okay.
So this is not one side isdoing bad, one side is doing
good.
They're both bad.
Both sides, for the last 100years, have been treating this
(27:54):
country like their own littlepiggy bank, with zero oversight.
That is not okay.
If you and I did any of thisstuff and you would be in prison
in three seconds, no questionsasked, and all my assets would
be frozen, that's the bottomline.
Okay so, but the bottom line isour community.
(28:17):
We're not interested in risk,we're not interested in putting
ourselves in that position.
We're interested in staying.
We're a community ofaccountants.
These are risk averse people.
We are not here to break laws.
We're here to stay within theblack and white lines.
It's very, very important tothem.
It's very important to thebusiness owners that they serve,
(28:37):
very, very important to them.
It's very important to thebusiness owners that they serve.
And we're, like I said, we'rehere just to look at the tax
code and to find out what's inthere.
How do we make business ownersmore efficient?
Because another interestingpoint is we have a charity that
our CPAs and some of theirdonors have been supporting and
this charity is called theMitchell Thorpe Foundation, and
(29:04):
because of the work we've beendoing is we've donated over $300
million of total gifts to thischarity.
Those gifts are beingdistributed to the charity on a
yearly basis, where the charityreceives seven figures a year in
cash distributions and thatcash is funding over 200
families that have very, verysick children that are requiring
medical care that thosefamilies could not afford.
(29:25):
So prior to getting thesedistributions, the parents were
sitting home, couldn't afford togo to work.
The parents aren't doctors.
They're trying to take care oftheir sick children without any
ability to take care of theirsick children.
Now they're able to use medicalcare and basically apply to
Mitchell Thorpe.
Mitchell Thorpe says yes andjust pays their medical bills.
(29:46):
Because of our community of CPAscompleting due diligence on a
structure that is now deliveringseven figures of cash every
year to these 200 families,making a huge difference in
their lives.
We're very, very proud of that.
So you know we're doing a lotof different things across a lot
of different channels.
Some of it is sexy, likeproducing movies, and some of it
(30:07):
is meaningful, like making adifference in the life of a
16-year-old who has six monthsto live and we're going to make
that six months their best sixmonths ever and make that family
feel better.
We're trying to make adifference.
So there's a lot of benefitswhen we save money.
We don't know where alldifferent channels create
(30:29):
different opportunities, but weknow there's suffering in this
world.
We know money makes adifference and putting it in the
hands of various charitableorganizations, of business
owners, of people who are goingto make a difference with that,
at the end of the day, we trackall of that and we want to
create win-win-wins.
It's not just about helpingCPAs make more money or helping
(30:52):
the business owners save moremoney.
We're seeing, you know, on amulti-generational basis.
When that savings happens, itresults in other amazing things
in those communities and we'rejust sharing some of those
highlights.
Speaker 3 (31:07):
That's awesome.
Tell us about the upcoming DueDiligence Project Summit.
Speaker 2 (31:13):
Here's the thing We've every year we feel like
we've seen everything under thesun, because we're the due
diligence project, we're thecenter of the tax planning
universe.
We've seen every tax strategyand every year we see five new
strategies we've never heard of,and every year we're like, wow,
how the heck did they do that?
So last year, at the end of theyear, we found a new idea, a
(31:34):
new strategy that's soinnovative.
That is very similar to some ofthe things we've done before,
some of the things we reallylove in our program, but they've
taken those concepts and addeda couple different ideas to it
that basically completelychanged.
It's like an evolution.
It's a real evolution of taxplanning, financial planning.
(31:54):
And so what I like to say is ourcommunity is we're a bunch of
tax geeks where we're taking upthis hill and combining it with
finance bros and meeting at thevery, very tippy top of a
mountain where there's very theair is rare.
It's very high up there.
It's easier for us to take thetax geeks up there and teach
(32:16):
them the finance stuff.
If we try to take finance brosand teach them the tax stuff,
they get lost.
The learning curve of tax is sosteep.
It really takes.
It took me about seven, eight,nine years of being inside the
tax code before I was promoted.
From nothing you are totallyuseless to to you know very
(32:41):
little Like that's the learningcurve.
And then, from knowing verylittle, you become like
literally the top people in tax.
The people at the top of the taxmountain are so much smarter
than the average tax person.
They've gone up so high up thismountain.
No one wants to go up thismountain.
(33:01):
You can't breathe up there.
But I've interviewed thousandsof tax professionals and what I
can tell you is the true taxgeeks.
They're so curious, they keepclimbing.
They keep climbing when theoxygen runs out.
Their curiosity keeps going.
Everyone else stays down herebecause it's easy to breathe,
it's relaxing.
(33:22):
Oh, we already make a milliondollars a year.
Why do we have to learn moretax strategies?
Why do you need more taxstrategies?
Your firm's making a lot ofmoney.
Just pay your tax and be happy.
There's a lot of CPAs righthere.
Just pay your tax and be happy.
Who are these nut jobs thatkeep climbing the mountain?
Michael Jordan, kobe Bryant,larry Bird?
(33:46):
They're not satisfied being.
Oh, I'm already in the All-Stargame.
I'm already the best player inthe world.
No they're like there's a kidthat's going to watch me play
today.
That's never seen me play today.
That's never seen me play todayand I'm going to show what
Michael Jordan plays like.
So we're looking for theMichael Jordans, we're looking
for the Kobe Bryants who are notsatisfied, who don't see
(34:09):
themselves as being tax expert.
They see themselves being thebest in the world in what they
do and they're going to continueto push themselves from
curiosity, just from curiosity,because they don't want to see
like I don't want to see anotherfirm do due diligence better
than the due diligence project.
(34:29):
These cpas do not want to meetanother cpa that knows more than
them.
Yeah, that would be like kobebryant meeting another
basketball player that's gotskills.
He'd be like what?
No, no, no, no, no, no, noright, kobe had one guy that was
better than him, michael jordan, and he's like I'm gonna beat
(34:50):
this guy, I'm gonna beat thisguy, I'm gonna beat this guy and
he and he got so close.
He was the closest one everbecause he had one goal, one
site, and he was maniacal.
He was like I'm going to keepgoing until I get there and he
was the closest thing to it.
And those are the two guys thatare at the top of the food
chain.
Lebron fans, sorry, I don'tcare, but the point is that
(35:14):
analogy works and when you're anut job like Kobe, when you're a
nut job like Michael, whenyou're a nut job like Larry or
Magic, you just keep going.
You know LeBron can't getbetter, so he just uses the
media to try to tell us thathe's the best because he's
played the longest.
(35:34):
Whatever Great, everyone cansee that it's fine In the tax
planning world.
It's.
The results are going to showit.
It's all in the black andwhites, it's all in the bottom
line.
How much money did you saveyour business owners?
How much money did they make?
How much money did you save?
There's no.
We can clearly see who's doingthe best job.
(35:54):
Show me those tax returns.
When we look at tax returns ofthe Fortune 500 companies out
there, 18% are able to zero outtheir tax return.
82% of the Fortune 500companies with the top CPA firms
, law firm in the country haveno idea how to zero out their
tax return.
18% do it every single year.
(36:15):
So those 18% of tax planningfirms are running circles around
82% who really don't know whatthey're doing.
Who are the best CPA firms inthe world.
82% of the 500 most profitablecompanies in the world.
That's the difference betweenhaving Michael Jordan be your
(36:38):
two guard on your basketballteam versus some guy who shows
up at YMCA's on Saturday who'sreally good at playing
basketball.
That's your two guard.
Speaker 3 (36:50):
Thank you so much for your time today.
I am motivated, I am inspiredand I am looking forward to the
Due Diligence Project Summitcoming up in May.
We'll have the informationaround this and so can't wait to
see you there, alex.
I'll be presenting a course andI can't wait to see if we break
(37:10):
those numbers that we've had inthe past.
What was it?
847?
Speaker 2 (37:14):
Yeah, we're excited about the summit we need 848.
Speaker 3 (37:17):
848 or more.
Speaker 2 (37:19):
Yeah, the summit is super exciting.
You know, every year we dosomething different at the
summit.
The concept is the same.
We talk about, you know,world-class due diligence.
We talk about operating avirtual family office with
best-in-class resources at thehighest level, with
best-in-class resources at thehighest level, and then we
(37:42):
introduce a group of specialiststo talk about their tax
strategies.
We give you enough about thosetax strategies to wet your
whistle, get you excited and seeif you want to plug in and
learn more.
And it's been a reallywonderful event that we've been
doing for many, many years andwe're excited to do it.
May 7th, 2025, due DiligenceProject Summit.
I believe it starts at 9 amPacific time, 12 Eastern.
(38:04):
Don't miss it, we'll see youthere.
Thanks so much for doing this,paul.
I think this concludes the DueDiligence Project State of the
Union.
We got everyone up to speed andwe're getting ready for another
record-breaking year here in2025.
Speaker 1 (38:19):
Fantastic.
That's all for this episode ofthe Due Diligence Project
podcast.
Be sure to visit due diligenceproject dot com to access the
resources we have available forqualified CPAs and family office
leaders.
Our mission at the DueDiligence Project is to help you
deliver more significance andvalue to your very best clients,
while shifting your traditionalpractice into the firm of the
(38:42):
future.
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