April 14, 2025 • 24 mins
Episode Summary: In this revealing interview, Due Diligence Project founder Alex Sonkin speaks with elite CPA Eric Aragon about his journey from Deloitte to running his own successful tax planning practice. Eric shares insights on how he transitioned from compliance work to high-value tax planning, saving clients tens of millions of dollars while maintaining a focus on risk management and due diligence.
Key Topics Covered:
- Career Evolution: Eric's path from aspiring doctor to Deloitte professional to independent tax planning specialist
- Planning vs. Compliance: How shifting focus from tax preparation to proactive planning transformed Eric's practice and client relationships
- Client Value Creation: The exceptional ROI (10-20x) that strategic tax planning delivers compared to other financial services
- Risk Management: The importance of thorough due diligence in delivering tax savings without exposing clients to audit risk
- Community Approach: How the collective expertise of hundreds of tax professionals creates confidence in implementing sophisticated strategies
- Practice Growth: Using tax planning as a differentiator to attract and retain high-value clients
- Business Philosophy: Why focusing on client value first naturally leads to practice success
Featured Quotes: "We're in the tens of millions, maybe at least tens of millions of dollars. I can say that conservatively, without doing my audit, that we're in the tens of millions of dollars." - Eric Aragon
"Create value first. The money will come later. It just comes up automatically." - Alex Sonkin
Resources:
This episode provides insights into how tax professionals can transition from compliance-focused work to high-value planning services that deliver exceptional ROI to clients while managing risk through collective expertise.
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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.
Please welcome your host AlexSunkin.
Speaker 2 (00:44):
Welcome to the Due Diligence Project podcast.
Welcome, Eric Aragon.
Today we're going to go intosophisticated tax planning.
We're going to dive right intoit.
We're going to dive right intodue diligence.
And there's been a lot made ofthe biggest computer geeks in
the world over the last 20, 30years and now, with AI and
(01:05):
people featuring the Microsofts,the Facebooks, all of the
amazing computer companies ledby computer geeks.
Inside the Due DiligenceProject we support some most
elite tax advisors in the worldwho have mastered parts of the
tax code, and today we're goingto dive into that.
We're really blessed to welcomeEric Aragon.
He's an elite CPA, he's amember of the tax code and today
we're going to dive into that.
We're really blessed to welcomeEric Aragon.
(01:26):
He's an elite CPA, he's amember of the Due Diligence
Project.
Welcome to the Due DiligenceProject podcast, Eric.
Speaker 3 (01:33):
Thanks, alex.
Speaker 2 (01:34):
Thanks for inviting me and obviously just happy to
be here, you had an amazing yearand I'm not sure how much tax
dollars total tax dollars youwere able to save your clients.
Do you have any idea of that?
Do you calculate that?
Have you been able to audit?
Speaker 3 (01:49):
that yet you know we're still in the process of
auditing that and working onthat number, but we're in the
tens of millions, maybe at leasttens of millions of dollars.
I can say that conservatively,without doing my audit, that
we're in the tens of millions ofdollars.
Speaker 2 (02:05):
If you're a client out there, if you're a business
owner out there and your CPA isnot serving you.
Well, we have this amazingcommunity of most elite CPAs in
the country.
We had over 847 elite CPAsparticipate in one of our due
diligence project summits andEric is one of the most elite of
the elite and he's helping hisclients.
Now mention, say, tens ofmillions of dollars in taxes,
(02:27):
utilizing all sorts of uniquestrategies, but did you always
want to be a CPA?
When did you know you wanted tobe a CPA, eric?
Speaker 3 (02:35):
It's sort of a funny story.
When I entered college I thoughtI wanted to be a doctor and
status, good money, you know.
I thought I had a good head onmy shoulders and I got to
organic chemistry and I thoughtthere's no way that I'm going to
stay doing this.
And my dad suggested I takelike some accounting and tax
classes.
And I was sitting in this taxclass and they were going over
(02:58):
court cases and I just I was sofascinated by it, I took an
accounting class.
It was like the easiest stuffI'd ever done and I'm like I
actually have a brain for thisand so I'm one of those strange
ones where my brain just worksin those numbers and it made
sense to me and I thought I canbe good at this.
It's not the most in a lot ofpeople's minds, it's not the
(03:20):
fanciest career or the sexiest,so to speak, but when you get
into it and you get into whatwe're doing, I like to say we
bring in sexy back into into tax, taxes and accounting.
Speaker 2 (03:30):
Well, if you're saving your clients tens of
millions of dollars.
I mean, some of them mightthink you're extremely sexy,
because that is, that's prettysexy.
That's what I'm going for.
Where did you grow up and wheredid you go to college?
Yeah, so I grew up in.
Speaker 3 (03:43):
Southern California, in Corona, which is a little
town in between like San Diego,la, just outside of Orange
County, I attended.
I went to Brigham YoungUniversity for my undergrad and
then did my master's at SanDiego State, did a stint at
Deloitte, got my CPA licensethere and worked for a private
equity firm for a private equityowned company for almost a
(04:05):
decade before starting my firm.
Speaker 2 (04:07):
Wow.
So you spent some time atDeloitte, one of the big four
big name firms, and now youoperate your own shop.
Can you tell us the differencesbetween your experience running
your own shop and what thatmeans to you and your clients
versus handling some of the bigclients?
Or maybe you handle just assome of the big clients, or
maybe you handled just as big aclients working for yourself as
(04:27):
you did with Deloitte.
But give us a little color inthat.
Speaker 3 (04:30):
Yeah, I mean Deloitte .
Most of the clients you workfor they're public companies, so
they have millions and millions.
Maybe most of them havebillions of dollars.
I worked on Sempra Energy.
There's another company calledExcel Trust.
That was a big real estateconglomerate and those were
great.
I don't really see the customerwhen you're working for big
(05:07):
conglomerates, so to speak, likethat.
So it's much more hands-on.
I like the small business pieceand I, just after years of
doing it, I knew I could givevalue to clients in a unique way
, and so that's why I got in tobe a CPA, but really also why I
got into the planning piece,most of all.
Speaker 2 (05:28):
What do you think makes you so unique versus?
Because I've been working withCPAs for the last two decades.
We've been able to work withthousands and thousands of CPAs
and obviously attract what webelieve are the top one
percenters to the due diligenceproject.
But what do you think reallyseparates you from the average
CPA and even a CPA in the top10% of the profession?
Speaker 3 (05:50):
We're all just normal human beings.
I think the difference is justif you want to separate yourself
in this industry and you wantto work with really smart and
successful people, you have todo planning.
And that's hard sometimes inour industry because people you
get so bogged down with work,the compliance work, and I think
(06:14):
most just haven't seen thevision of really what you can do
with planning, how you can helpclients, how you can help them
keep more of their money, therelationships that you build and
even your own quality of life.
Because you know, for mepersonally, you know sitting in
a spreadsheet and preparing taxreturns like it's not my passion
.
My passion is helping right andplanning, and so I think it's
(06:37):
just more that desire andwanting to give value, more than
just a plug in a number numbercruncher, that really kind of
changed the direction of yourcompetition and your competition
is it that they're not able todo the planning because of lack
of time, lack of resources?
Speaker 2 (06:55):
what is it?
Because I I just see cpasreally busy and some cpas are
focused over here.
Some cpas are focused overthere.
Some are chasing their own tailaround the tax code is crazy
and they're answering emails andquestions of their clients and
it's like I could see it gettingvery distracting, and so maybe
(07:16):
it's like every other professionif you are able to focus.
But what is it for you thatallows you to focus on the
planning, which allows you tobring that real valuable tax
mitigation stuff to your bigclients?
Speaker 3 (07:29):
At this point in my career and with my company, I
have enough staff where I can dothat and I've really dedicate
my role to the clients withhelping them with planning,
understanding the strategies tovetting them, making sure I'm
(07:50):
comfortable, recommending themand then using great resources
like the due diligence projectthat really facilitates that.
Some of these strategies, likeI like to think I'm smart, but I
looked through something like Icould never have thought of
this.
This is genius.
Whoever thought of this wasawesome and that would have
taken me forever to develop, andso it's great to have like a
resource like that.
And I've just learned to atleast in my firm like we're like
(08:11):
the nucleus, like we're likethe hub where people come for
advice.
But you can't do it all right.
Speaker 2 (08:16):
You sort of have to pick and choose your roles and
what you want to do and figureout how you can best help people
, and that's what I figured outLike my best option is to help
people with planning you knowit's people like you, it's CPAs
like you that make our communitywork, because our community is
this elite membership communitywhere we know that no one person
(08:36):
can do it by themselves, buttogether as a community of what
we inherently call tax geeks.
Some are on the product side,some are on the product side,
some are on the client side, buteveryone has to have at least
10,000 or 50,000, hopefully ofexperience when audit and tax
court.
And we believe that we've builtthe largest team of tax geeks
(08:59):
in the world that are alllooking at the same laws that
the IRS is looking at, and ourjob is just to look at
strategies, look at the law andgo is this legal?
Is this crossing over any lines?
And if we utilize a communityof tax-focused CPAs who are
signing those tax returns, andthen firms like yours who
figured out hey, my clientsdon't want just tax returns,
(09:22):
they don't want the compliance,they actually want the ideas.
They want me to spend my timevetting these ideas and bring
them the very, very best ideas.
But that takes time, and solet's talk about how the due
diligence project has shortenedyour runway and taken.
You've got X hours in a year.
You've got Y clients, and whatthe due diligence project has
(09:44):
done for you to help you hoursin a year you've got Y clients
and what the due diligenceproject has done for you to help
you complete your due diligence, get confidence to the point
where, yeah, this is a greatidea.
I'm willing to sign this taxreturn and then bring these
ideas to my clients.
Speaker 3 (09:55):
Yeah.
So I think it's done in acouple different ways.
One is like I associate with alot of the members of the due
diligence committee and so if wehave questions or somebody
doesn't get something, a lot oftimes we're just sharing
information or questions witheach other Like, hey, what did
you think about this?
Have you asked about thisstrategy?
And so there is a personalsharing component to it.
(10:17):
That's really valuable and it'sgreat because there's lots,
because there's 70,000 pages ofcode in the IRS, you can't think
of everything.
But also with the due diligenceprojects and branding, it
brings other professionals thathave figured certain sections
out even more.
And when you get introduced tothese strategies, you're asking
them questions to getcomfortable with it.
They're giving you, they'reciting code from the IRS,
(10:40):
they're talking about taxopinion letters, different the
structures and the setups, andso you take that information,
you absorb it, even as a taxprofessional who knows tax and
does it on a day-to-day basis.
There's sometimes things likehe said something here, I got to
go, so I got to think about it.
I get access to them whenquestions come up.
They're great about respondingwhen I have questions, and so
(11:04):
all of that combined with themembers and you presenting the
strategy, working with themembers and then, you know,
working with these other vendorsthat are setting it up.
To me.
Speaker 2 (11:11):
It's just been, it's made it really easy, the idea
for this, the due diligenceproject, came from us putting on
these events with elitepresenters, elite tax attorneys,
elite specialists, with anaudience full of CPAs.
And as I watch, as we put on 20, 30 of these live events, we
realized that the conversationsin the hallways was where the
(11:32):
magic was happening.
Kind of like when the NBA putson an all-star game and all the
best players in the world, orthe NFL puts on the All-Pro Bowl
and all the best players in theworld all get together and they
start sharing what makes themthe best and they start sharing
these secrets.
And what it does is propels allthe most elite players even
(11:55):
higher to the top.
And so like what if we createda virtual community just like
this of tax geeks all just geekout on tax strategies and really
protecting their clients fromaudit risk and tax court risk?
And as we continue growing, werealized no one else was
actually doing anything likethis, because it's messy.
(12:16):
There's fighting behind thescenes, right?
It's like two parents, twoparents fighting it out.
What's the best way to raiseour child?
We don't want to do this infront of a child.
We need to figure this outbecause if we make a mistake, we
only have one shot at raisingthis child and we better have
conversations or else we don'tknow it's going to be random.
(12:39):
So the due diligence project ismessy because due diligence is
messy and stepping on eachother's toes, differing opinions
, everyone's their own,protecting their own community
of clients.
And that's what makes it reallyneat, because we're not all
Deloitte employees.
We're stepping on our seniorpartner's toes going I have a
(13:01):
question, I don't I have aproblem with this strategy.
People have no problem going.
Hey, question I have a problemwith this strategy.
People have no problem going.
Hey, alex, I have a problemwith this.
And we welcome that.
And I think that's one of thethings that allows us to go deep
and wide and not scared becauseit's okay to upset the
specialist, it's okay to upsetme.
(13:22):
We're very CPA focused.
We need to help the CPAcomplete their own due diligence
and part of that is maybe thatCPA is going to uncover a
problem that the other four or500 CPAs missed.
Yeah, and that's.
We're open to that possibilitybecause we have so many
strategies.
There are strategies we nevereven introduced to the community
(13:44):
because they haven't evenpassed the first two, three
levels of due diligence yet, orthey are very similar to other
strategies.
That is almost going to beconfusing.
We have too many strategies, sowe have this community with
hundreds of CPAs, where thereare too many ideas that are
potentially going to overwhelmthe CPAs and we try to constrain
(14:04):
the community of.
Here are the best five, six,seven ideas in this area five,
six, seven ideas in this area.
Here's different types ofdeductions.
In combination, you can utilizethese tools and obviously
there's a number of softwarecompanies that are embedding
these due diligence privatetools in their software, making
it easy for you to put togetherplans and so forth.
(14:25):
So, yeah, yeah.
Speaker 3 (14:28):
For sure, and I would just echo that because I'm 100%
owner of my business.
You've got to worry aboutemployees and clients when you
go to get these strategies andyou're worried about if I did I
missed something.
It is very comforting knowingthat there's a community and
that the system itself isfocused on due diligence, and I
tell my clients that too.
(14:49):
I they say, like, well, whereare you getting this from?
How can you, why can you dothis versus someone else?
And I'm like look, I belong toa community of professionals
that are focused on being thebest and giving the best
strategies to you, and it'scalled due diligence, meaning
we're putting in work, because alot of the clients don't
understand that either, right,they get scared, right, like I
(15:12):
can't do that, that's too goodto be true, or I don't want the
IRS.
And so when you approach it ina way that says, hey, there's a
community, these are high levelprofessionals and you educate
them on that, it makes adifference in their comfort
level too.
Speaker 2 (15:27):
In moving forward with when you say community,
we're talking hundreds of elitefirms, elite of the elite,
hundreds from tens of thousandsthat we've interviewed, that
we've met with and many of whomare not a good fit for the due
diligence project.
What's really interesting is,even when our CPAs share this
story with their elite clients,their millionaires,
(15:50):
multimillionaires,centimillionaires, billionaires
and we have famous actors,famous athletes, billionaires
utilizing our CPA community fortax planning they will
invariably try to reproduce thedue diligence project themselves
by okay, my CPA likes this, I'mgoing to show this to my
attorney, I'm going to show thisto my partner CPA.
(16:11):
They probably maybe didn't evenlisten to the fact that each of
these strategies already beenvetted by hundreds and hundreds
and hundreds of independent CPAsand attorneys, but they're
going to want to do itthemselves because they're not,
they don't even know somethinglike this exists.
And so, just like Amazon andNetflix, show you your favorite
movies and shows, our communitygets to see, you know what are
(16:32):
our community's favorite taxstrategies and then why.
And then, of course, each CPAdives into the information and
completes their own duediligence and gets to get their
own questions answered beforethey feel comfortable.
So I guess were there anysurprises about the due
diligence and I know you're partof other associations.
Does anyone else do anythinglike this out there?
(16:54):
Anything similar?
Speaker 3 (16:56):
You know I've signed up for a lot of different stuff
over the years and some havebeen effective on different
parts of my my business.
But having this is unique inthat the access to the
strategies and the the value ofthe strategies to the clients is
is just top notch, like there'snot in my.
I haven't found anything likethat and you know I'll tell you
(17:19):
it's sort of funny.
You're going to like.
You know it took me, I think.
I signed up almost a year and ahalf ago.
I didn't really get to do muchin the first year Because I was
just the same thing.
I was a little conservative ingoing into it.
But as I start, my clientelegrows and they make more money
and they're more net worth.
I was like I need solutions, soI'm looking for that.
So I'm looking at your stuffand I'm like, oh, I really like
(17:40):
this, I like that.
I had no idea that I was goingto get paid to refer stuff, like
I honestly had no clue.
You started telling me, oh,there's something that I'm like
I don't know, I just need to getthe solution to the client.
Speaker 2 (17:52):
And like, when I started counting it when I was
done, I was like holy crap, likewe have a lot of we have a lot
of members who join and theydon't even realize that there is
some fees associated with thisplanning that go back to the
CPAs.
They just want ideas.
They just want ideas that areclean.
They want a community of othertax professionals that are all
(18:14):
in it just to protect theirclients from risk and bring
their clients the best ideasthat are available.
That's really it and that's whywe love CPAs, because CPAs are
not doing this for the money,they're doing this for the thank
you, they're doing this tocreate value and, of course,
when you create value, youdeserve to get compensated.
And this is not based oncompensation, it's based on net
(18:40):
of cost, net of risk.
Let's avoid audit risk.
Let's avoid tax court risk.
Everything else is secondary,right.
Speaker 3 (18:47):
I agree, I agree a hundred percent.
And, um, I think that's one ofthe reasons why I've been
successful with the clients,because I just wanted to give
them value and it's like, ohokay, I get, I got paid to do
this Fantastic, but I also I getto keep this client for the
next.
They see me as a resource.
Speaker 2 (19:04):
They understand I'm giving, I'm helping them, giving
them value, and they stay let'stalk about value for a second,
because we're operating in thelargest industry in the world,
the money industry, right, andthere's a lot of professionals
in the money industry, peopleworking for investment banks,
goldman sachs, jp Morgan, morganStanley.
You know you've got aninvestment banking side on the
(19:25):
sell side, on the broker side.
Then you've got financialadvisors, insurance
professionals.
You've got specialists outthere.
Everyone's trying to createvalue, everyone's trying to
create ROI.
Yep, when you come in and youbring an idea to the table that
helps a client go from let'stalk about some of these success
(19:46):
stories Like client comes toyou they're going to pay tax on
$5 million of income, $3 millionof income you come in and you
do what you do.
At the end of the day they comeout of your office.
Where what's the ROI?
Speaker 3 (20:00):
mean it's it's 10 to 20, it's, it's so high.
I'm not even sure.
I've calculated it 10x, 20x incertain.
Speaker 2 (20:09):
So 10 to you know, sometimes 10 to 20x roi.
So they're investing a dollar,you're giving them 10 of value.
Can goldman sachs compete withthat kind of financially where?
Where do you go to get ROI likethis?
Can your real estateprofessional give you ROI?
You know, when I invest in areal estate project I hope it
(20:30):
works out.
But there's an element of risk,there's an element of you know,
sometimes they don't work out.
Sometimes it's just you'remoney in a project, guess what.
Sometimes it's just you'rerunning a project.
Guess what.
That project's not good.
Speaker 3 (20:40):
Yeah, I mean, look, we work with insurance agents,
we work with wealthprofessionals, we work with
attorneys.
They all are very important,have important parts of the
client experience and what theydo.
But there's some of thesethings you do for the client,
some of these strategies youimplement, that just really blow
their mind as far as the ROIand the benefit to them.
(21:02):
And you're right, it's hard forothers to touch that because
it's just so bad and really theway we eliminate risk.
Speaker 2 (21:11):
First of all, it's really hard to create ROI in an
investment place because thereare markets, there's buyers and
sellers and everyone's meetingin the middle and it's hard to
create arbitrage unless you havepeople trying to misprice on
different exchanges, findmispricings, things like that.
But with the tax code, whenyou're able to take a strategy
(21:32):
and have hundreds of independentprofessionals look at that
strategy, look at the tax codego, this is a clean strategy.
This does not violate anysection of the tax code and it
creates this kind of benefit tothe client, we can actually
create an ROI net of cost, netof risk.
And then if we put the strategythrough the eyeballs of
hundreds of independent CPAs whoreview it, and if we get 98,
(21:55):
99% of those CPAs go no, this isreally clean.
That's what gives us thatconfidence to say you know what?
Here's the projected ROI andthe strategy, Because our tax
professionals are the same oneswho are working at the IRS and
we're looking at this going,this is really, really a clean
structure.
Speaker 3 (22:12):
Yeah, no, 100%.
I mean ROI to a client meansnothing if it's just loaded with
risk and audits and penalties.
And so, yeah, it's when you canbring that risk down to really
almost nothing and deliver suchvalue, like the clients just
love it.
And again, that's one of thereasons why I I enjoy what I'm
doing and like I love why we'vepositioned the tax planning,
(22:36):
because you can do that forclients, it's, and that's what
it's all about eric, it's beensuch a pleasure to have you.
Speaker 2 (22:43):
It's a pleasure to have our community and our
audience, which is made up oftax professionals and
individuals and high net worthpeople, to really dive into a
little bit of the tax planningand how it's done inside.
But maybe leave us with onepiece of advice for our audience
, and it could be something fun,or it could be something
anything that you could think of.
Speaker 3 (23:04):
I mean, it just goes down to our profession.
The biggest advice I could giveyou is just give value to
clients.
If you give value to clientslike, the money will come either
through the services you offeror that's just what it's all
about.
You got to think about theclient and the value, and if you
can do that, you're going tohave a great career and can make
(23:25):
some great money and have a lotof fun doing it too.
Speaker 2 (23:28):
That's awesome, Eric.
I'm going to make sure my kidswatch this because this supports
.
The message I give them isalways just create value first.
Create value first.
You got to do.
The money will come later.
It just comes up automatically.
Eric, thank you so much forbringing us the Due Diligence
Project podcast.
(23:48):
Looking forward to anothergreat year and I'm sure your
clients are going to get anotheramazing benefit from working
with you this year.
Thanks so much.
Speaker 3 (23:53):
Thanks for having me Alex Take care.
Thanks so much.
Speaker 1 (23:56):
That's all for this episode of the Due Diligence
Project podcast.
Be sure to visit due diligenceproject 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
(24:19):
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.
Please welcome your host AlexSunkin.
Speaker 2 (00:44):
Welcome to the Due Diligence Project podcast.
Welcome, Eric Aragon.
Today we're going to go intosophisticated tax planning.
We're going to dive right intoit.
We're going to dive right intodue diligence.
And there's been a lot made ofthe biggest computer geeks in
the world over the last 20, 30years and now, with AI and
(01:05):
people featuring the Microsofts,the Facebooks, all of the
amazing computer companies ledby computer geeks.
Inside the Due DiligenceProject we support some most
elite tax advisors in the worldwho have mastered parts of the
tax code, and today we're goingto dive into that.
We're really blessed to welcomeEric Aragon.
He's an elite CPA, he's amember of the tax code and today
we're going to dive into that.
We're really blessed to welcomeEric Aragon.
(01:26):
He's an elite CPA, he's amember of the Due Diligence
Project.
Welcome to the Due DiligenceProject podcast, Eric.
Speaker 3 (01:33):
Thanks, alex.
Speaker 2 (01:34):
Thanks for inviting me and obviously just happy to
be here, you had an amazing yearand I'm not sure how much tax
dollars total tax dollars youwere able to save your clients.
Do you have any idea of that?
Do you calculate that?
Have you been able to audit?
Speaker 3 (01:49):
that yet you know we're still in the process of
auditing that and working onthat number, but we're in the
tens of millions, maybe at leasttens of millions of dollars.
I can say that conservatively,without doing my audit, that
we're in the tens of millions ofdollars.
Speaker 2 (02:05):
If you're a client out there, if you're a business
owner out there and your CPA isnot serving you.
Well, we have this amazingcommunity of most elite CPAs in
the country.
We had over 847 elite CPAsparticipate in one of our due
diligence project summits andEric is one of the most elite of
the elite and he's helping hisclients.
Now mention, say, tens ofmillions of dollars in taxes,
(02:27):
utilizing all sorts of uniquestrategies, but did you always
want to be a CPA?
When did you know you wanted tobe a CPA, eric?
Speaker 3 (02:35):
It's sort of a funny story.
When I entered college I thoughtI wanted to be a doctor and
status, good money, you know.
I thought I had a good head onmy shoulders and I got to
organic chemistry and I thoughtthere's no way that I'm going to
stay doing this.
And my dad suggested I takelike some accounting and tax
classes.
And I was sitting in this taxclass and they were going over
(02:58):
court cases and I just I was sofascinated by it, I took an
accounting class.
It was like the easiest stuffI'd ever done and I'm like I
actually have a brain for thisand so I'm one of those strange
ones where my brain just worksin those numbers and it made
sense to me and I thought I canbe good at this.
It's not the most in a lot ofpeople's minds, it's not the
(03:20):
fanciest career or the sexiest,so to speak, but when you get
into it and you get into whatwe're doing, I like to say we
bring in sexy back into into tax, taxes and accounting.
Speaker 2 (03:30):
Well, if you're saving your clients tens of
millions of dollars.
I mean, some of them mightthink you're extremely sexy,
because that is, that's prettysexy.
That's what I'm going for.
Where did you grow up and wheredid you go to college?
Yeah, so I grew up in.
Speaker 3 (03:43):
Southern California, in Corona, which is a little
town in between like San Diego,la, just outside of Orange
County, I attended.
I went to Brigham YoungUniversity for my undergrad and
then did my master's at SanDiego State, did a stint at
Deloitte, got my CPA licensethere and worked for a private
equity firm for a private equityowned company for almost a
(04:05):
decade before starting my firm.
Speaker 2 (04:07):
Wow.
So you spent some time atDeloitte, one of the big four
big name firms, and now youoperate your own shop.
Can you tell us the differencesbetween your experience running
your own shop and what thatmeans to you and your clients
versus handling some of the bigclients?
Or maybe you handle just assome of the big clients, or
maybe you handled just as big aclients working for yourself as
(04:27):
you did with Deloitte.
But give us a little color inthat.
Speaker 3 (04:30):
Yeah, I mean Deloitte .
Most of the clients you workfor they're public companies, so
they have millions and millions.
Maybe most of them havebillions of dollars.
I worked on Sempra Energy.
There's another company calledExcel Trust.
That was a big real estateconglomerate and those were
great.
I don't really see the customerwhen you're working for big
(05:07):
conglomerates, so to speak, likethat.
So it's much more hands-on.
I like the small business pieceand I, just after years of
doing it, I knew I could givevalue to clients in a unique way
, and so that's why I got in tobe a CPA, but really also why I
got into the planning piece,most of all.
Speaker 2 (05:28):
What do you think makes you so unique versus?
Because I've been working withCPAs for the last two decades.
We've been able to work withthousands and thousands of CPAs
and obviously attract what webelieve are the top one
percenters to the due diligenceproject.
But what do you think reallyseparates you from the average
CPA and even a CPA in the top10% of the profession?
Speaker 3 (05:50):
We're all just normal human beings.
I think the difference is justif you want to separate yourself
in this industry and you wantto work with really smart and
successful people, you have todo planning.
And that's hard sometimes inour industry because people you
get so bogged down with work,the compliance work, and I think
(06:14):
most just haven't seen thevision of really what you can do
with planning, how you can helpclients, how you can help them
keep more of their money, therelationships that you build and
even your own quality of life.
Because you know, for mepersonally, you know sitting in
a spreadsheet and preparing taxreturns like it's not my passion
.
My passion is helping right andplanning, and so I think it's
(06:37):
just more that desire andwanting to give value, more than
just a plug in a number numbercruncher, that really kind of
changed the direction of yourcompetition and your competition
is it that they're not able todo the planning because of lack
of time, lack of resources?
Speaker 2 (06:55):
what is it?
Because I I just see cpasreally busy and some cpas are
focused over here.
Some cpas are focused overthere.
Some are chasing their own tailaround the tax code is crazy
and they're answering emails andquestions of their clients and
it's like I could see it gettingvery distracting, and so maybe
(07:16):
it's like every other professionif you are able to focus.
But what is it for you thatallows you to focus on the
planning, which allows you tobring that real valuable tax
mitigation stuff to your bigclients?
Speaker 3 (07:29):
At this point in my career and with my company, I
have enough staff where I can dothat and I've really dedicate
my role to the clients withhelping them with planning,
understanding the strategies tovetting them, making sure I'm
(07:50):
comfortable, recommending themand then using great resources
like the due diligence projectthat really facilitates that.
Some of these strategies, likeI like to think I'm smart, but I
looked through something like Icould never have thought of
this.
This is genius.
Whoever thought of this wasawesome and that would have
taken me forever to develop, andso it's great to have like a
resource like that.
And I've just learned to atleast in my firm like we're like
(08:11):
the nucleus, like we're likethe hub where people come for
advice.
But you can't do it all right.
Speaker 2 (08:16):
You sort of have to pick and choose your roles and
what you want to do and figureout how you can best help people
, and that's what I figured outLike my best option is to help
people with planning you knowit's people like you, it's CPAs
like you that make our communitywork, because our community is
this elite membership communitywhere we know that no one person
(08:36):
can do it by themselves, buttogether as a community of what
we inherently call tax geeks.
Some are on the product side,some are on the product side,
some are on the client side, buteveryone has to have at least
10,000 or 50,000, hopefully ofexperience when audit and tax
court.
And we believe that we've builtthe largest team of tax geeks
(08:59):
in the world that are alllooking at the same laws that
the IRS is looking at, and ourjob is just to look at
strategies, look at the law andgo is this legal?
Is this crossing over any lines?
And if we utilize a communityof tax-focused CPAs who are
signing those tax returns, andthen firms like yours who
figured out hey, my clientsdon't want just tax returns,
(09:22):
they don't want the compliance,they actually want the ideas.
They want me to spend my timevetting these ideas and bring
them the very, very best ideas.
But that takes time, and solet's talk about how the due
diligence project has shortenedyour runway and taken.
You've got X hours in a year.
You've got Y clients, and whatthe due diligence project has
(09:44):
done for you to help you hoursin a year you've got Y clients
and what the due diligenceproject has done for you to help
you complete your due diligence, get confidence to the point
where, yeah, this is a greatidea.
I'm willing to sign this taxreturn and then bring these
ideas to my clients.
Speaker 3 (09:55):
Yeah.
So I think it's done in acouple different ways.
One is like I associate with alot of the members of the due
diligence committee and so if wehave questions or somebody
doesn't get something, a lot oftimes we're just sharing
information or questions witheach other Like, hey, what did
you think about this?
Have you asked about thisstrategy?
And so there is a personalsharing component to it.
(10:17):
That's really valuable and it'sgreat because there's lots,
because there's 70,000 pages ofcode in the IRS, you can't think
of everything.
But also with the due diligenceprojects and branding, it
brings other professionals thathave figured certain sections
out even more.
And when you get introduced tothese strategies, you're asking
them questions to getcomfortable with it.
They're giving you, they'reciting code from the IRS,
(10:40):
they're talking about taxopinion letters, different the
structures and the setups, andso you take that information,
you absorb it, even as a taxprofessional who knows tax and
does it on a day-to-day basis.
There's sometimes things likehe said something here, I got to
go, so I got to think about it.
I get access to them whenquestions come up.
They're great about respondingwhen I have questions, and so
(11:04):
all of that combined with themembers and you presenting the
strategy, working with themembers and then, you know,
working with these other vendorsthat are setting it up.
To me.
Speaker 2 (11:11):
It's just been, it's made it really easy, the idea
for this, the due diligenceproject, came from us putting on
these events with elitepresenters, elite tax attorneys,
elite specialists, with anaudience full of CPAs.
And as I watch, as we put on 20, 30 of these live events, we
realized that the conversationsin the hallways was where the
(11:32):
magic was happening.
Kind of like when the NBA putson an all-star game and all the
best players in the world, orthe NFL puts on the All-Pro Bowl
and all the best players in theworld all get together and they
start sharing what makes themthe best and they start sharing
these secrets.
And what it does is propels allthe most elite players even
(11:55):
higher to the top.
And so like what if we createda virtual community just like
this of tax geeks all just geekout on tax strategies and really
protecting their clients fromaudit risk and tax court risk?
And as we continue growing, werealized no one else was
actually doing anything likethis, because it's messy.
(12:16):
There's fighting behind thescenes, right?
It's like two parents, twoparents fighting it out.
What's the best way to raiseour child?
We don't want to do this infront of a child.
We need to figure this outbecause if we make a mistake, we
only have one shot at raisingthis child and we better have
conversations or else we don'tknow it's going to be random.
(12:39):
So the due diligence project ismessy because due diligence is
messy and stepping on eachother's toes, differing opinions
, everyone's their own,protecting their own community
of clients.
And that's what makes it reallyneat, because we're not all
Deloitte employees.
We're stepping on our seniorpartner's toes going I have a
(13:01):
question, I don't I have aproblem with this strategy.
People have no problem going.
Hey, question I have a problemwith this strategy.
People have no problem going.
Hey, alex, I have a problemwith this.
And we welcome that.
And I think that's one of thethings that allows us to go deep
and wide and not scared becauseit's okay to upset the
specialist, it's okay to upsetme.
(13:22):
We're very CPA focused.
We need to help the CPAcomplete their own due diligence
and part of that is maybe thatCPA is going to uncover a
problem that the other four or500 CPAs missed.
Yeah, and that's.
We're open to that possibilitybecause we have so many
strategies.
There are strategies we nevereven introduced to the community
(13:44):
because they haven't evenpassed the first two, three
levels of due diligence yet, orthey are very similar to other
strategies.
That is almost going to beconfusing.
We have too many strategies, sowe have this community with
hundreds of CPAs, where thereare too many ideas that are
potentially going to overwhelmthe CPAs and we try to constrain
(14:04):
the community of.
Here are the best five, six,seven ideas in this area five,
six, seven ideas in this area.
Here's different types ofdeductions.
In combination, you can utilizethese tools and obviously
there's a number of softwarecompanies that are embedding
these due diligence privatetools in their software, making
it easy for you to put togetherplans and so forth.
(14:25):
So, yeah, yeah.
Speaker 3 (14:28):
For sure, and I would just echo that because I'm 100%
owner of my business.
You've got to worry aboutemployees and clients when you
go to get these strategies andyou're worried about if I did I
missed something.
It is very comforting knowingthat there's a community and
that the system itself isfocused on due diligence, and I
tell my clients that too.
(14:49):
I they say, like, well, whereare you getting this from?
How can you, why can you dothis versus someone else?
And I'm like look, I belong toa community of professionals
that are focused on being thebest and giving the best
strategies to you, and it'scalled due diligence, meaning
we're putting in work, because alot of the clients don't
understand that either, right,they get scared, right, like I
(15:12):
can't do that, that's too goodto be true, or I don't want the
IRS.
And so when you approach it ina way that says, hey, there's a
community, these are high levelprofessionals and you educate
them on that, it makes adifference in their comfort
level too.
Speaker 2 (15:27):
In moving forward with when you say community,
we're talking hundreds of elitefirms, elite of the elite,
hundreds from tens of thousandsthat we've interviewed, that
we've met with and many of whomare not a good fit for the due
diligence project.
What's really interesting is,even when our CPAs share this
story with their elite clients,their millionaires,
(15:50):
multimillionaires,centimillionaires, billionaires
and we have famous actors,famous athletes, billionaires
utilizing our CPA community fortax planning they will
invariably try to reproduce thedue diligence project themselves
by okay, my CPA likes this, I'mgoing to show this to my
attorney, I'm going to show thisto my partner CPA.
(16:11):
They probably maybe didn't evenlisten to the fact that each of
these strategies already beenvetted by hundreds and hundreds
and hundreds of independent CPAsand attorneys, but they're
going to want to do itthemselves because they're not,
they don't even know somethinglike this exists.
And so, just like Amazon andNetflix, show you your favorite
movies and shows, our communitygets to see, you know what are
(16:32):
our community's favorite taxstrategies and then why.
And then, of course, each CPAdives into the information and
completes their own duediligence and gets to get their
own questions answered beforethey feel comfortable.
So I guess were there anysurprises about the due
diligence and I know you're partof other associations.
Does anyone else do anythinglike this out there?
(16:54):
Anything similar?
Speaker 3 (16:56):
You know I've signed up for a lot of different stuff
over the years and some havebeen effective on different
parts of my my business.
But having this is unique inthat the access to the
strategies and the the value ofthe strategies to the clients is
is just top notch, like there'snot in my.
I haven't found anything likethat and you know I'll tell you
(17:19):
it's sort of funny.
You're going to like.
You know it took me, I think.
I signed up almost a year and ahalf ago.
I didn't really get to do muchin the first year Because I was
just the same thing.
I was a little conservative ingoing into it.
But as I start, my clientelegrows and they make more money
and they're more net worth.
I was like I need solutions, soI'm looking for that.
So I'm looking at your stuffand I'm like, oh, I really like
(17:40):
this, I like that.
I had no idea that I was goingto get paid to refer stuff, like
I honestly had no clue.
You started telling me, oh,there's something that I'm like
I don't know, I just need to getthe solution to the client.
Speaker 2 (17:52):
And like, when I started counting it when I was
done, I was like holy crap, likewe have a lot of we have a lot
of members who join and theydon't even realize that there is
some fees associated with thisplanning that go back to the
CPAs.
They just want ideas.
They just want ideas that areclean.
They want a community of othertax professionals that are all
(18:14):
in it just to protect theirclients from risk and bring
their clients the best ideasthat are available.
That's really it and that's whywe love CPAs, because CPAs are
not doing this for the money,they're doing this for the thank
you, they're doing this tocreate value and, of course,
when you create value, youdeserve to get compensated.
And this is not based oncompensation, it's based on net
(18:40):
of cost, net of risk.
Let's avoid audit risk.
Let's avoid tax court risk.
Everything else is secondary,right.
Speaker 3 (18:47):
I agree, I agree a hundred percent.
And, um, I think that's one ofthe reasons why I've been
successful with the clients,because I just wanted to give
them value and it's like, ohokay, I get, I got paid to do
this Fantastic, but I also I getto keep this client for the
next.
They see me as a resource.
Speaker 2 (19:04):
They understand I'm giving, I'm helping them, giving
them value, and they stay let'stalk about value for a second,
because we're operating in thelargest industry in the world,
the money industry, right, andthere's a lot of professionals
in the money industry, peopleworking for investment banks,
goldman sachs, jp Morgan, morganStanley.
You know you've got aninvestment banking side on the
(19:25):
sell side, on the broker side.
Then you've got financialadvisors, insurance
professionals.
You've got specialists outthere.
Everyone's trying to createvalue, everyone's trying to
create ROI.
Yep, when you come in and youbring an idea to the table that
helps a client go from let'stalk about some of these success
(19:46):
stories Like client comes toyou they're going to pay tax on
$5 million of income, $3 millionof income you come in and you
do what you do.
At the end of the day they comeout of your office.
Where what's the ROI?
Speaker 3 (20:00):
mean it's it's 10 to 20, it's, it's so high.
I'm not even sure.
I've calculated it 10x, 20x incertain.
Speaker 2 (20:09):
So 10 to you know, sometimes 10 to 20x roi.
So they're investing a dollar,you're giving them 10 of value.
Can goldman sachs compete withthat kind of financially where?
Where do you go to get ROI likethis?
Can your real estateprofessional give you ROI?
You know, when I invest in areal estate project I hope it
(20:30):
works out.
But there's an element of risk,there's an element of you know,
sometimes they don't work out.
Sometimes it's just you'remoney in a project, guess what.
Sometimes it's just you'rerunning a project.
Guess what.
That project's not good.
Speaker 3 (20:40):
Yeah, I mean, look, we work with insurance agents,
we work with wealthprofessionals, we work with
attorneys.
They all are very important,have important parts of the
client experience and what theydo.
But there's some of thesethings you do for the client,
some of these strategies youimplement, that just really blow
their mind as far as the ROIand the benefit to them.
(21:02):
And you're right, it's hard forothers to touch that because
it's just so bad and really theway we eliminate risk.
Speaker 2 (21:11):
First of all, it's really hard to create ROI in an
investment place because thereare markets, there's buyers and
sellers and everyone's meetingin the middle and it's hard to
create arbitrage unless you havepeople trying to misprice on
different exchanges, findmispricings, things like that.
But with the tax code, whenyou're able to take a strategy
(21:32):
and have hundreds of independentprofessionals look at that
strategy, look at the tax codego, this is a clean strategy.
This does not violate anysection of the tax code and it
creates this kind of benefit tothe client, we can actually
create an ROI net of cost, netof risk.
And then if we put the strategythrough the eyeballs of
hundreds of independent CPAs whoreview it, and if we get 98,
(21:55):
99% of those CPAs go no, this isreally clean.
That's what gives us thatconfidence to say you know what?
Here's the projected ROI andthe strategy, Because our tax
professionals are the same oneswho are working at the IRS and
we're looking at this going,this is really, really a clean
structure.
Speaker 3 (22:12):
Yeah, no, 100%.
I mean ROI to a client meansnothing if it's just loaded with
risk and audits and penalties.
And so, yeah, it's when you canbring that risk down to really
almost nothing and deliver suchvalue, like the clients just
love it.
And again, that's one of thereasons why I I enjoy what I'm
doing and like I love why we'vepositioned the tax planning,
(22:36):
because you can do that forclients, it's, and that's what
it's all about eric, it's beensuch a pleasure to have you.
Speaker 2 (22:43):
It's a pleasure to have our community and our
audience, which is made up oftax professionals and
individuals and high net worthpeople, to really dive into a
little bit of the tax planningand how it's done inside.
But maybe leave us with onepiece of advice for our audience
, and it could be something fun,or it could be something
anything that you could think of.
Speaker 3 (23:04):
I mean, it just goes down to our profession.
The biggest advice I could giveyou is just give value to
clients.
If you give value to clientslike, the money will come either
through the services you offeror that's just what it's all
about.
You got to think about theclient and the value, and if you
can do that, you're going tohave a great career and can make
(23:25):
some great money and have a lotof fun doing it too.
Speaker 2 (23:28):
That's awesome, Eric.
I'm going to make sure my kidswatch this because this supports
.
The message I give them isalways just create value first.
Create value first.
You got to do.
The money will come later.
It just comes up automatically.
Eric, thank you so much forbringing us the Due Diligence
Project podcast.
(23:48):
Looking forward to anothergreat year and I'm sure your
clients are going to get anotheramazing benefit from working
with you this year.
Thanks so much.
Speaker 3 (23:53):
Thanks for having me Alex Take care.
Thanks so much.
Speaker 1 (23:56):
That's all for this episode of the Due Diligence
Project podcast.
Be sure to visit due diligenceproject 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
(24:19):
future.
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