¶ Introduction to Elite Tax Planning
Want to know how elite tax advisors win the due diligence game to satisfy ultra high net worth clients who expect the very best . Welcome to the Due Diligence Project podcast , where you get a chance to learn from the elite CPAs , virtual family office professionals and tax specialists who are doing just that .
We'll uncover their insider secrets on how they are dominating their competition , vetting new ideas and supercharging their due diligence process to deliver extraordinary results . Bringing his 25 plus years of experience with top tax professionals across the country , please welcome your host , alex Sunkin . Please welcome your host Alex Sunkin .
Welcome to the Due Diligence Project podcast . Welcome , Eric Aragon . Today we're going to go into sophisticated tax planning . We're going to dive right into it . We're going to dive right into due diligence .
And there's been a lot made of the biggest computer geeks in the world over the last 20 , 30 years and now , with AI and people featuring the Microsofts , the Facebooks , all of the amazing computer companies led by computer geeks .
Inside the Due Diligence Project we support some most elite tax advisors in the world who have mastered parts of the tax code , and today we're going to dive into that . We're really blessed to welcome Eric Aragon . He's an elite CPA , he's a member of the tax code and today we're going to dive into that . We're really blessed to welcome Eric Aragon .
He's an elite CPA , he's a member of the Due Diligence Project . Welcome to the Due Diligence Project podcast , Eric .
Thanks , alex .
Thanks for inviting me and obviously just happy to be here , you had an amazing year and I'm not sure how much tax dollars total tax dollars you were able to save your clients . Do you have any idea of that ? Do you calculate that ? Have you been able to audit ?
that yet you know we're still in the process of auditing that and working on that number , but 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 .
If you're a client out there , if you're a business owner out there and your CPA is not serving you . Well , we have this amazing community of most elite CPAs in the country . We had over 847 elite CPAs participate in one of our due diligence project summits and Eric is one of the most elite of the elite and he's helping his clients .
Now mention , say , tens of millions of dollars in taxes , utilizing all sorts of unique strategies , but did you always want to be a CPA ? When did you know you wanted to be a CPA , eric ?
It's sort of a funny story . When I entered college I thought I wanted to be a doctor and status , good money , you know . I thought I had a good head on my shoulders and I got to organic chemistry and I thought there's no way that I'm going to stay doing this . And my dad suggested I take like some accounting and tax classes .
And I was sitting in this tax class and they were going over court cases and I just I was so fascinated by it , I took an accounting class .
It was like the easiest stuff I'd ever done and I'm like I actually have a brain for this and so I'm one of those strange ones where my brain just works in those numbers and it made sense to me and I thought I can be good at this .
It's not the most in a lot of people's minds , it's not the fanciest career or the sexiest , so to speak , but when you get into it and you get into what we're doing , I like to say we bring in sexy back into into tax , taxes and accounting .
Well , if you're saving your clients tens of millions of dollars . I mean , some of them might think you're extremely sexy , because that
¶ Eric's Journey to Becoming an Elite CPA
is , that's pretty sexy . That's what I'm going for . Where did you grow up and where did you go to college ? Yeah , so I grew up in .
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 Young University for my undergrad and then did my master's at San Diego State , did a stint at Deloitte , got my CPA license there and worked for a private equity firm for a private equity owned company for almost a decade before starting my firm .
Wow . So you spent some time at Deloitte , one of the big four big name firms , and now you operate your own shop . Can you tell us the differences between your experience running your own shop and what that means to you and your clients versus handling some of the big clients ?
Or maybe you handle just as some of the big clients , or maybe you handled just as big a clients working for yourself as you did with Deloitte . But give us a little color in that .
Yeah , I mean Deloitte . Most of the clients you work for they're public companies , so they have millions and millions . Maybe most of them have billions of dollars . I worked on Sempra Energy . There's another company called Excel Trust . That was a big real estate conglomerate and those were great .
I don't really see the customer when you're working for big conglomerates , so to speak , like that . So it's much more hands-on .
I like the small business piece and I , just after years of doing it , I knew I could give value to clients in a unique way , and so that's why I got in to be a CPA , but really also why I got into the planning piece , most of all .
What do you think makes you so unique versus ? Because I've been working with CPAs for the last two decades . We've been able to work with thousands and thousands of CPAs and obviously attract what we believe are the top one percenters to the due diligence project .
But what do you think really separates you from the average CPA and even a CPA in the top 10% of the profession ?
We're all just normal human beings . I think the difference is just if you want to separate yourself in this industry and you want to work with really smart and successful people , you have to do planning . And that's hard sometimes in our industry because people you get so bogged down with work , the compliance
¶ Differences Between Big Firms and Private Practice
work , and I think most just haven't seen the vision of really what you can do with planning , how you can help clients , how you can help them keep more of their money , the relationships that you build and even your own quality of life . Because you know , for me personally , you know sitting in a spreadsheet and preparing tax returns like it's not my passion .
My passion is helping right and planning , and so I think it's just more that desire and wanting to give value , more than just a plug in a number number cruncher , that really kind of changed the direction of your competition and your competition is it that they're not able to do the planning because of lack of time , lack of resources ?
what is it ? Because I I just see cpas really busy and some cpas are focused over here . Some cpas are focused over there .
Some are chasing their own tail around the tax code is crazy and they're answering emails and questions of their clients and it's like I could see it getting very distracting , and so maybe it's like every other profession if you are able to focus .
But what is it for you that allows you to focus on the planning , which allows you to bring that real valuable tax mitigation stuff to your big clients ?
At this point in my career and with my company , I have enough staff where I can do that and I've really dedicate my role to the clients with helping them with planning , understanding the strategies to vetting them , making sure I'm comfortable , recommending them and then using great resources like the due diligence project that really facilitates that .
Some of these strategies , like I like to think I'm smart , but I looked through something like I could never have thought of this . This is genius . Whoever thought of this was awesome and that would have taken me forever to develop , and so it's great to have like a resource like that .
And I've just learned to at least in my firm like we're like the nucleus , like we're like the hub where people come for advice . But you can't do it all right .
You sort of have to pick and choose your roles and what you want to do and figure out how you can best help people , and that's what I figured out Like my best
¶ What Separates Elite Tax Advisors
option is to help people with planning you know it's people like you , it's CPAs like you that make our community work , because our community is this elite membership community where we know that no one person can do it by themselves , but together 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 , but everyone has to have at least 10,000 or 50,000 , hopefully of experience when audit and tax court .
And we believe that we've built the largest team of tax geeks in the world that are all looking at the same laws that the IRS is looking at , and our job is just to look at strategies , look at the law and go is this legal ? Is this crossing over any lines ?
And if we utilize a community of tax-focused CPAs who are signing those tax returns , and then firms like yours who figured out hey , my clients don't want just tax returns , they don't want the compliance , they actually want the ideas . They want me to spend my time vetting these ideas and bring them the very , very best ideas .
But that takes time , and so let's talk about how the due diligence project has shortened your runway and taken . You've got X hours in a year .
You've got Y clients , and what the due diligence project has done for you to help you hours in a year you've got Y clients and what the due diligence project has done for you to help you complete your due diligence , get confidence to the point where , yeah , this is a great idea .
I'm willing to sign this tax return and then bring these ideas to my clients .
Yeah . So I think it's done in a couple different ways . One is like I associate with a lot of the members of the due diligence committee and so if we have questions or somebody doesn't get something , a lot of times we're just sharing information or questions with each other Like , hey , what did you think about this ? Have you asked about this strategy ?
And so there is a personal sharing component to it . That's really valuable and it's great because there's lots , because there's 70,000 pages of code in the IRS , you can't think of everything . But also with the due diligence projects and branding , it brings other professionals that have figured certain sections out even more .
And when you get introduced to these strategies , you're asking them questions to get comfortable with it .
They're giving you , they're citing code from the IRS , they're talking about tax opinion letters , different the structures and the setups , and so you take that information , you absorb it , even as a tax professional who knows tax and does it on a day-to-day basis . There's sometimes things like he said something here , I got to go , so I got to think about it .
I get access to them when questions come up . They're great about responding when I have questions , and so all of that combined with the members and you presenting the strategy , working with the members and then , you know , working with these other vendors that are setting it up . To me .
It's just been , it's made it really easy , the idea for this , the due diligence project , came from us putting on these events with elite presenters , elite tax attorneys , elite specialists , with an audience full of CPAs .
And as I watch , as we put on 20 , 30 of these live events , we realized that the conversations in the hallways was where the magic was happening .
Kind of like when the NBA puts on an all-star game and all the best players in the world , or the NFL puts on the All-Pro Bowl and all the best players in the world all get together and they start sharing what makes them the best and they start sharing these secrets . And what it does is propels all the most elite players even higher to the top .
And so like what if we created a virtual community just like this of tax geeks all just geek out on tax strategies and really protecting their clients from audit risk and tax court risk ? And as we continue growing , we realized no one else was actually doing anything like this , because it's messy . There's fighting behind the scenes , right ?
It's like two parents , two parents fighting it out . What's the best way to raise our child ? We don't want to do this in front of a child . We need to figure this out because if we make a mistake , we only have one shot at raising this child and we better have conversations or else we don't know it's going to be random .
So the due diligence project is messy because due diligence is messy and stepping on each other's toes , differing opinions , everyone's their own , protecting their own community of clients . And that's what makes it really neat , because we're not all Deloitte employees .
We're stepping on our senior partner's toes going I have a question , I don't I have a problem with this strategy . People have no problem going . Hey , question I have a problem with this strategy . People have no problem going . Hey , alex , I have a problem with this . And we welcome that . And I think that's one of the things that allows us to go deep
¶ The Due Diligence Project Community Value
and wide and not scared because it's okay to upset the specialist , it's okay to upset me . We're very CPA focused . We need to help the CPA complete their own due diligence and part of that is maybe that CPA is going to uncover a problem that the other four or 500 CPAs missed . Yeah , and that's .
We're open to that possibility because we have so many strategies . There are strategies we never even introduced to the community because they haven't even passed the first two , three levels of due diligence yet , or they are very similar to other strategies . That is almost going to be confusing .
We have too many strategies , so we have this community with hundreds of CPAs , where there are too many ideas that are potentially going to overwhelm the CPAs and we try to constrain 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 of deductions .
In combination , you can utilize these tools and obviously there's a number of software companies that are embedding these due diligence private tools in their software , making it easy for you to put together plans and so forth . So , yeah , yeah .
For sure , and I would just echo that because I'm 100% owner of my business . You've got to worry about employees and clients when you go to get these strategies and you're worried about if I did I missed something . It is very comforting knowing that there's a community and that the system itself is focused on due diligence , and I tell my clients that too .
I they say , like , well , where are you getting this from ? How can you , why can you do this versus someone else ?
And I'm like look , I belong to a community of professionals that are focused on being the best and giving the best strategies to you , and it's called due diligence , meaning we're putting in work , because a lot of the clients don't understand that either , right , they get scared , right , like I can't do that , that's too good to be true , or I don't want the
IRS . And so when you approach it in a way that says , hey , there's a community , these are high level professionals and you educate them on that , it makes a difference in their comfort level too .
In moving forward with when you say community , we're talking hundreds of elite firms , elite of the elite , hundreds from tens of thousands that we've interviewed , that we've met with and many of whom are 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 , multimillionaires , centimillionaires , billionaires and we have famous actors , famous athletes , billionaires utilizing our CPA community for tax planning they will invariably try to reproduce the due diligence project themselves by okay , my CPA likes this , I'm going to
show this to my attorney , I'm going to show this to my partner CPA . They probably maybe didn't even listen to the fact that each of these strategies already been vetted by hundreds and hundreds and hundreds of independent CPAs and attorneys , but they're going to want to do it themselves because they're not , they don't even know something like this exists .
And so , just like Amazon and Netflix , show you your favorite movies and shows , our community gets to see , you know what are our community's favorite tax strategies and then why . And then , of course , each CPA dives into the information and completes their own due diligence and gets to get their own questions answered before they feel comfortable .
So I guess were there any surprises about the due diligence and I know you're part of other associations . Does anyone else do anything like this out there ? Anything similar ?
You know I've signed up for a lot of different stuff over the years and some have been effective on different parts of my my business . But having this is unique in that the access to the strategies and the the value of the strategies to the clients is is just top notch , like there's not in my .
I haven't found anything like that and you know I'll tell you it's sort of funny . You're going to like . You know it took me , I think . I signed up almost a year and a half ago . I didn't really get to do much in the first year Because I was just the same thing . I was a little conservative in going into it .
But as I start , my clientele grows and they make more money and they're more net worth . I was like I need solutions , so I'm looking for that . So I'm looking at your stuff and I'm like , oh , I really like this , I like that . I had no idea that I was going to 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 get the solution to the client .
And like , when I started counting it when I was done , I was like holy crap , like we have a lot of we have a lot of members who join and they don't even realize that there is some fees associated with this planning that go back to the CPAs . They just want ideas . They just want ideas that are clean .
They want a community of other tax professionals that are all in it just to protect their clients from risk and bring their clients the best ideas that are available .
That's really it and that's why we love CPAs , because CPAs are not doing this for the money , they're doing this for the thank you , they're doing this to create value and , of course , when you create value , you deserve to get compensated . And this is not based on compensation , it's based on net of cost , net of risk . Let's avoid audit risk .
Let's avoid tax court risk . Everything else is secondary , right .
I agree , I agree a hundred percent . And , um , I think that's one of the reasons why I've been successful with the clients , because I just wanted to give them value and it's like , oh okay , I get , I got paid to do this Fantastic , but I also I get to keep this client for the next . They see me as a resource .
They understand I'm giving , I'm helping them , giving them value , and they stay let's talk about value for a second , because we're operating in the largest industry in the world , the money industry , right , and there's a lot of professionals in the money industry , people working for investment banks , goldman sachs , jp Morgan , morgan Stanley . You know you've got
¶ Creating Extraordinary Client ROI
an investment banking side on the sell side , on the broker side . Then you've got financial advisors , insurance professionals . You've got specialists out there . Everyone's trying to create value , everyone's trying to create ROI .
Yep , when you come in and you bring an idea to the table that helps a client go from let's talk about some of these success stories Like client comes to you they're going to pay tax on $5 million of income , $3 million of income you come in and you do what you do . At the end of the day they come out of your office . Where what's the ROI ?
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 in certain .
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 with that kind of financially where ? Where do you go to get ROI like this ? Can your real estate professional give you ROI ? You know , when I invest in a real estate project I hope it 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're money in a project , guess what . Sometimes it's just you're running a project . Guess what . That project's not good .
Yeah , I mean , look , we work with insurance agents , we work with wealth professionals , we work with attorneys . They all are very important , have important parts of the client experience and what they do .
But there's some of these things you do for the client , some of these strategies you implement , that just really blow their mind as far as the ROI and the benefit to them . And you're right , it's hard for others to touch that because it's just so bad and really the way we eliminate risk .
First of all , it's really hard to create ROI in an investment place because there are markets , there's buyers and sellers and everyone's meeting in the middle and it's hard to create arbitrage unless you have people trying to misprice on different exchanges , find mispricings , things like that .
But with the tax code , when you're able to take a strategy and have hundreds of independent professionals look at that strategy , look at the tax code go , this is a clean strategy . This does not violate any section of the tax code and it creates this kind of benefit to the client , we can actually create an ROI net of cost , net of risk .
And then if we put the strategy through the eyeballs of hundreds of independent CPAs who review it , and if we get 98 , 99% of those CPAs go no , this is really clean . That's what gives us that confidence to say you know what ?
Here's the projected ROI and the strategy , Because our tax professionals are the same ones who are working at the IRS and we're looking at this going , this is really , really a clean structure .
Yeah , no , 100% . I mean ROI to a client means nothing if it's just loaded with risk and audits and penalties . And so , yeah , it's when you can bring that risk down to really almost nothing and deliver such value , like the clients just love it .
And again , that's one of the reasons why I I enjoy what I'm doing and like I love why we've positioned the tax planning , because you can do that for clients , it's , and that's what it's all about eric , it's been such a pleasure to have you .
It's a pleasure to have our community and our audience , which is made up of tax professionals and individuals and high net worth people , to really dive into a little bit of the tax planning and how it's done inside . But maybe leave us with one piece of advice
¶ Final Advice for Tax Professionals
for our audience , and it could be something fun , or it could be something anything that you could think of .
I mean , it just goes down to our profession . The biggest advice I could give you is just give value to clients . If you give value to clients like , the money will come either through the services you offer or that's just what it's all about .
You got to think about the client and the value , and if you can do that , you're going to have a great career and can make some great money and have a lot of fun doing it too .
That's awesome , Eric . I'm going to make sure my kids watch this because this supports . The message I give them is always 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 for bringing us the Due Diligence Project podcast .
Looking forward to another great year and I'm sure your clients are going to get another amazing benefit from working with you this year . Thanks so much .
Thanks for having me Alex Take care . Thanks so much .
That's all for this episode of the Due Diligence Project podcast . Be sure to visit due diligence project com to access the resources we have available for qualified CPAs and family office leaders .
Our mission at the Due Diligence Project is to help you deliver more significance and value to your very best clients , while shifting your traditional practice into the firm of the future .