The Due Diligence Project™ Podcast
The Due Diligence Project™ is a unique, global community of 500+ elite, independent CPA Firms and Family Offices that vet, rank, and rate hundreds of sophisticated tax strategies and resources to identify the highest ROI solutions net of cost and risk.
The Due Diligence Project™ Podcast
021: Elite Tax Planning: Creating Extraordinary Client Value - Josh Dixon
Episode Summary: In this interview, Due Diligence Project founder Alex Sonkin speaks with CPA Josh Dixon about his journey from traditional tax preparation to high-value tax planning. Josh shares how he transformed his practice to focus on strategies that deliver significant tax savings to clients while improving his own work-life balance and revenue.
Key Topics Covered:
- Career Evolution: Josh's path from aspiring stockbroker to owning a CPA firm and discovering his passion for proactive tax planning
- Practice Transformation: How Josh transitioned from compliance-focused work to advisory services that deliver substantial client value
- Client Success Stories: Examples of tax savings achieved, including reducing a client's tax bill from $300,000 to approximately $40,000
- ROI Comparison: Why tax planning can deliver returns that outperform traditional investment management
- Due Diligence Approach: The importance of thoroughly vetting tax strategies through a community of experienced professionals
- Work-Life Balance: How focusing on higher-value services has improved Josh's quality of life while increasing revenue
- Implementation Tips: Josh's advice that CPAs only need to master a few high-impact strategies to transform their practice
Featured Quotes: "I enjoy being more of a partner with them rather than just somebody who fills out their forms. I enjoy working with my clients throughout the year and being able to make more of an impact in their lives." - Josh Dixon
"You save him $260,000 a year. Four years, that's over a million bucks. That's a million bucks. Whether you're Bill Gates or whether you're Joe Smith, a million bucks is a million bucks." - Alex Sonkin
Resources
This episode provides insights into how tax professionals can shift from compliance work to advisory services that deliver significant value to clients while improving their own practice profitability and work-life balance.
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.
Speaker 2:All right, welcome to the Due Diligence Project podcast. Today, joining me is elite tax planner Josh Dixon. Welcome to the Due Diligence Project podcast, josh. Thank you, alex, glad to be here. I'm so happy to be here today. We are celebrating another amazing year. You had what I believe is a record-setting year. Have you been able to calculate how much total tax dollars you were able to save your clients over the last tax year, josh, or is that something that you do later on in the year in terms of internal audit?
Speaker 3:No, I need to do that, but it's been such a whirlwind lately experience that I've just been so busy I haven't really had a chance to look up and figure that part out yet. But we are starting to calculate returns for clients and we are starting to figure out what those numbers look like.
Speaker 2:Right, you brought a lot of value to clients, just didn't even have time to calculate the total number of tens of millions of total tax savings. But did you always know you wanted to be a CPA? Is that something that, and how early in life did you realize you wanted to be a CPA? And if not, what did you want to be early in life and why did you become a CPA? Let's start there.
Speaker 3:Yeah, no, it's kind of a. It's been a journey, for sure. So I actually started out thinking that I wanted to be a stockbroker and that. But that job more or less has kind of been automated. People don't really do that anymore. It's all kind of online now.
Speaker 3:So early on in my life I had a teacher that told me oh, you're going to be a CPA someday. I thought no, that's not going to happen, I'll never be a CPA. And sure enough I went to college and I went to school for finance and then I added on accounting and coming out of college I got an opportunity to work for a CPA firm in their tax department. I actually started to enjoy it. I found it pretty interesting. I decided to continue on with it, but I told myself I'd never have my own firm. And sure enough, I now have my own firm and I've had my own firm since 2009. So it's been quite a while now.
Speaker 3:I started out with just a few clients added on, added on, doing mostly traditional CPA work doing tax returns, accounting, payroll, all that kind of good stuff but always leaned more into tax as things moved along. I didn't really know where this journey was going to go, but I knew I didn't really want to just do tax returns. While I'm really good at that and I enjoy that piece I wanted to be able to do more for my clients. So I started getting into tax resolution but that wasn't really quite my niche. So then I got into doing tax planning and that's where I really found something I really enjoy doing.
Speaker 3:I enjoy interacting with the clients. I enjoy being able to help them save money on their taxes. I enjoy being more of a partner with them rather than just somebody who fills out their forms. I enjoy working with my clients throughout the year and being able to make more of an impact in their lives. So that's what kind of got me into tax planning and why I've kind of gone down that path. And then this past year is when I came across DVP and really liked a lot of the things that DDP had to offer. I've got some other colleagues and people that I've worked with that also had great things to say about DDP. So I decided to join back in July of last year. Didn't really know what that was going to entail or where that was going to go, but it's been great so far. I've really enjoyed being a part of the group.
Speaker 2:We're really excited to have you, josh. Before we jump into your tax planning and what makes you unique because you are an elite tax planner the Due Diligence Project is we're very proud to attract the top 1% of tax professionals, elite CPAs with at least 10, 50,000 hours of experience in audit and tax court, so we can have really a meaningful discussion and help CPAs process due diligence and obviously every new CPA that joins is going to do their own due diligence on all of our tax strategies. I want to talk to you more about that, but before we jump in there, where did you go? Where'd you grow up? Where did you go to college?
Speaker 3:Yeah, mostly in Colorado, from Lakewood outside of Denver, grew up there, went to school there, went to Metro State University in downtown Denver and then in 2009, after the financial crisis, ended up losing my job, like a lot of people, searched around for new opportunities, found one in Dallas Dallas hadn't been as impacted by the downturn in the economy and then took a job down here. It's supposed to be temporary. I keep having. My whole life has been. This is never going to happen. I'm not going to do this. I always said I'd never moved to Texas, I'd never lived here. But here I am and I met my wife and we've just been in Texas ever since you mentioned a lot of stuff.
Speaker 2:I want to like now drill into some of the things that you've shared before. You know you talk about tax planning versus tax preparation. You are bringing incredible tax mitigation strategies to your clients. There are millions of other CPAs out there that don't know 95, 99% of the tax strategy that you've learned that you've completed due diligence on what makes you different from these other CPAs. What is it? Is it they're allocating their time to activities that are not focused on tax planning? Can you give us maybe a sample of reasons of how you've been able to create time for yourself and focus on maybe what your clients really want, as opposed to what they're getting from other CPAs?
Speaker 3:I mean, it's been a. That's been a big time commitment and a big cost commitment as well that I think maybe a lot of other CPAs don't want to, don't want to put in the time and effort and don't not to their, you know, not for any fault of their own other than just they're busy and so it's difficult to try and work in those extra hours or try and work in that extra time to learn and study these different things. But that's what I've been doing the last five or six years is digging into different opportunities, different types of strategies, different ways we can help our clients, and I really look for the ones that are going to be most impactful. So there are things that we can do. There are different opportunities, strategies out there that you can do for clients that will help them or will not help them.
Speaker 3:I always give people the example of you can go out and buy a G wagon car but my car friends tell me that they're not very good vehicles to begin with. Why would you do that and why would that be a strategy for you? I guess those things exist, but I prefer to take more of an investment approach, or more of a financial approach, if you will, in that I look at what's the ROI and how impactful is this strategy going to be. We have a strategy that can save somebody $100,000 versus saving them $5,000. That's going to be a lot more impactful.
Speaker 2:And you're part of a number of other organizations and associations of CPAs and other tax professionals out there. And how has the due diligence project been able to differentiate itself and bring you value in terms of shortening your runway of completing due diligence and showing you new strategies? Or are there other services out there that are similar, that do the same thing? Give us your feedback.
Speaker 3:Not that I've seen the other groups that I've been a part of. It seems like a lot of people have the same half dozen or 10 different things that you can do. I feel like the DDP has a lot of unique opportunities that I haven't really come across before. So the other organizations have been valuable in terms of education and learning about different strategies and how to evaluate options, but I feel like DDP has more to offer than a lot of other organizations and so I've been glad to have found this opportunity to be able to find these different options to be able to give my clients.
Speaker 2:And now that you look back in your career, you mentioned a lot of words ROI. Can you imagine if you were a stockbroker? You work with people in that financial realm. We work with people in every part of the whole financial industry and everyone is trying to deliver ROI. Well, you and I know that our community of elite CPAs the 0.01 percenters we're designing programs for clients that have phenomenal ROI. Clients invest a dollar they get a $9 deduction. They invest a dollar, they get a $6 deduction. They get their dollar back with 50% interest. These are ROIs that are almost unheard of. Do you know of any stockbrokers that have opportunities, that have ROIs that can compete with what you're bringing to your clients in terms of ROI, net of cost, net of risk?
Speaker 3:Yeah, certainly not. It doesn't seem like there's tons of opportunities out there in that world.
Speaker 2:There's a lot of risk out there.
Speaker 2:You know, the people in dealing with real estate right? There's no guaranteed returns in real estate. There's no guaranteed returns in the stock market. Maybe some people think Bitcoin, if you hold it for four years, gives you this idea of a guaranteed return. Maybe that's the closest thing out there. I don't know.
Speaker 2:But the way we as a community of tax professionals minimize risk is by showing strategies to hundreds and hundreds of independent CPAs the largest independent peer review community and we're looking at the same tax code as the IRS, and our goal is to have more elite tax professionals than the IRS as a community looking at the same set of laws going. Is this defendable? Is this something we're willing to sign in a tax return or not? And if we show it to one or two or 10 CPAs, that's good, but if we show it to 600 CPAs who have 50,000 hours of experience in audit and tax court, that's better. That's gonna give us a higher level of confidence and then we can actually extrapolate a real ROI. Where this strategy costs this much, it has this much tax savings. This is real money in your bank account. It's very hard for a stockbroker to create that.
Speaker 3:I had a client one time that she did have a money manager or whatever they're called now they're not really stockbrokers anymore and I think that for the year her account basically ended up flat, but he still ended up charging her like $40,000 to manage her account and I thought that's ridiculous. They're not really getting any value out of it. If they're not really making any money in this deal, why would you pay someone for that service? And so I never understood that. I mean, there are, I'm sure there are people out there money managers, stockbrokers that do a great job for their clients, but no, I don't think they're achieving these kinds of ROIs.
Speaker 2:And that to me, like that's why our community, that's why we're really only trying to attract elite CPAs, because the answer you just gave us is something that our audience, really you know, our audience, the non-financial professional audience of end users that you know, the three people that watch the Due Diligence Project podcast who are not CPAs out there, you know can appreciate the fact that our community is really focused on delivering value. We're not here to babysit money and charge fees. We're here to deliver value and value. And ROI is really hard to scrape up and find and that's the key is CPAs are not in this for the money.
Speaker 2:A lot of CPAs come into the profession because they're risk averse. They know it's extremely valuable. Everyone needs this. They're not coming in to become multimillionaires and a lot of CPAs who are joining the Do Dozers Project and coming into this industry are becoming multi-millionaires because they're simply bringing tens of millions or hundreds of millions of dollars of value to their clients and they're just getting compensated a small fraction of that value, and that small fraction happens to be more money than they really were thinking about ever making as a CPA, but they're just in a very unique position to bring this value to clients.
Speaker 3:That was something that you know as a CPA, as a tax preparer, I was never able to do that Right. When I was just preparing somebody's tax return, I could never demonstrate enough value to really, you know, make it worthwhile for the clients other than just we're going to help you stay out of jail and part of it.
Speaker 2:I feel like the IRS has a goal of distracting CPAs with deadlines, changing minuscule parts of the tax code that are almost meaningless, but the CPAs have to pay attention to it. So now they give you deadlines every two months, constantly change the tax code, constantly forcing you just to focus on producing tax returns, financial statements, and stripping you of the time and availability to actually do the proactive tax planning that your clients want you to do. So let's talk about how you've been able to carve out time and confidence in order to find unique opportunities, complete your due diligence on those opportunities and then bring those opportunities to your clients, because your competition has the same 24 hours a day that you do, but they're not using that time to find opportunities and bring them to their clients, and you are. Let's talk about how the due diligence project is maybe shortening your runway for that.
Speaker 3:Yeah, you know, as I got into doing more tax planning, things like that, I started focusing more on you know what clients can I work with that are going to be able to provide the most value.
Speaker 3:And then we went through a process where we moved some clients along that maybe weren't a good fit for our firm in order to make room for the kind of clients that we do want to work with. And as we've gone through this process, we've essentially freed up our time without really having to sacrifice our income or things like that I think some people are afraid of. Well, if I start down this path, I'm going to lose clients and I'm not going to have enough income to take care of my bills and feed my family, which is all important. The reality is that as you get more into doing this kind of work, that income comes back in, and so, as you're working with more people providing more value, it's easier to charge more appropriate fees for the kind of work that we're doing. And then it doesn't require me to have, you know, a thousand clients.
Speaker 2:It doesn't require me to be working 80 hours a week, I can have, you know, kind of a more normal life. So so tell me, give us an example of some of these you know, without giving away the strategy or the exact numbers. Give us an example of some of your high net worth clients that came to you this last year with a tax bill of X and after the work you did, they came out with a much better result. Just big number, big picture, just so our audience can appreciate the actual work, the results of the work you're doing.
Speaker 3:Yeah, I have a client that you know, prior to talking, prior to working with me, he was at around probably about a million dollars a year in income and I think this year I don't know, I don't know, I don't know, I don't we're probably going to get them down to, I think, around 300,000.
Speaker 3:And I always tell people when I take on new clients, I always preface them with it sounds cool to say that we're going to get you down to zero and while we might be able to, while we there could be those possibilities or opportunities it may not happen every year or just depending on what opportunities the client also wants to participate in and so we found a couple of opportunities that he really liked, and actually I think it was about maybe three different opportunities that he really liked that he got involved with and so we were able to get his income down significantly. His taxable income is going to be probably more like $300,000 this year, maybe $250,000 after deductions for standard deduction or itemized deductions, and then the tax bill is going to be probably like $40,000 versus he's been paying, I think, $300,000.
Speaker 2:I'll tell you what. You start adding that up on a yearly basis, you're saving him $260,000 a year. Four years, that's over a million bucks. That's a million bucks. Whether you're Bill Gates or whether you're Joe Smith, a million bucks is a million bucks. Yeah for sure. A million bucks over a 20 year period. Put a million dollars in Bitcoin over 20 years and, my goodness, what does that mean to you?
Speaker 2:Or you put a million bucks in Bitcoin 10 years ago and we're talking we can buy half of Europe or something like that. Right, this is exciting stuff, and has this made a difference in your life and your family's life, outside of the additional revenue that you're generating from the planning?
Speaker 3:Yeah, no, absolutely. Like I mentioned, I have a better work-life balance right, so I have more time to be available to spend time with my wife or go do activities. I'm not necessarily chained to my desk all the time like I was before, when we were just cranking out tax returns. So it's definitely a better work-life balance. But then also one thing I tell my clients a lot is that not only am I recommending these opportunities to them, but I'm also participating in them, and so I often participate in a lot of the opportunities and tax strategies and things that I'm doing, that I'm suggesting to my clients. I'm also doing them myself, and that way I'm also reaping the benefits.
Speaker 2:To me that's the coolest thing. We get really excited. I get excited because I really love working with CPAs. We built a community of tax geeks. We're really proud of that.
Speaker 2:The world has been focused on computer geeks, with the Bill Gates of the world and the Zuckerbergs of the world and the Elon Musks of the world building these trillion dollar companies with all this leverage that we didn't even understand how much leverage there was in technology 20 years ago, 30 years ago, when the internet came out. Now these guys are just running the whole planet and what we're trying to do inside the due diligence project is look at a different group of elite professionals that are focused on the tax side, not on the technology side, not on the software side, but diving into the most complex document in the world, the tax code. No one knows if it's 75,000 pages, 750,000 pages, 7.5 million pages, how many pages is there? I'm not sure any CPA could round it to the nearest 100,000, to be honest with you, I would bet that they cannot. But it's constantly changing and what we're trying to do inside the Due Diligence Project is attract as many Josh Dixons, as many elite CPAs, as we can, to create as many data points so that Josh and every other CPA in our community can have the chance to complete their due diligence. We share our notes with each CPA on every strategy to shorten their runway so that they can complete their due diligence and tell us if we're right or wrong. Or maybe we missed something, because if one or two CPAs miss it, maybe it's them, but if 20 or 30% of our CPAs miss something, or maybe we missed something, because if one or two CPAs miss it, maybe it's them, but if 20 or 30% of our CPAs miss something, then maybe it's our community.
Speaker 2:And we're just like Amazon and Netflix. We want to have as many data points as possible so we can create our top 10 based on ROI, net of risk, net of cost, and it's just like the S&P 500. The S&P 500 was very different 20 years ago than it is today, but it's still the top 500. Same thing with the due diligence project. We have our top 20 strategies, top 10 strategies. They were different 10 years ago and 15 years ago. So what's changing? We're attracting new resources. We're attracting new CPAs. We show those strategies to our tax professionals. The tax code's changing, so the risk parameters on these strategies are constantly changing. The changes in the marketplace and continually have the hierarchy of the highest ROI strategy, net of cost, net of risk, based on what the IRS is giving us in terms of guidelines, and I think that's really what we've created.
Speaker 2:But it still takes people like you, josh, to make this work, because unless you complete your due diligence, unless you make those phone calls to your clients, nothing's going to happen. Diligence Unless you make those phone calls to your clients, nothing's going to happen. And I commend you for figuring out how to take your busy work. Move it away, focus on what your clients need and want, and it's not rocket science. They want ideas and they want you plugged into the largest independent peer review community of tax professionals in the world, which is where you're at and you've dedicated yourself, and because of that, your clients are benefiting. They're reducing their taxes, they're reducing their costs, they're putting money that was otherwise going to go to the state and federal government back into their community, creating more jobs, creating more benefit to the community. And so I want to just thank you for the work that you're doing for the Due Diligence Project and for your clients, but can you leave us with one great idea or something, one piece of advice that's really made a difference in your life.
Speaker 3:Yeah, no for sure. And thank you, alex. I really like the DDP, the Due Diligence Project, really like being part of the group and that they have a broad range of opportunities and options for us to be able to take to our clients. But the reality is that while we may have a dozen different opportunities or options, we really only need one or two or three and you'll be able to wow your clients easily. And once they get wowed, then they're hooked right. Then they want to stick with you for life. You're their best friend and I have a number of clients that and these aren't necessarily multimillion dollar clients either.
Speaker 3:I have clients that only make $300,000 a year but if we take their tax bill from $50,000 down to $5,000, they're ecstatic and they want to be a client for life. Feeling it's fun being a part of that energy when your clients come back to you with that excitement and you can show them what you've been able to do and how you've been able to help them. But it's not really well. I've done a lot of hours of study and research and things like that. You know, ddp does definitely help streamline that process to where we can. Like I said, we can just kind of grab onto like one or two kind of main opportunities, be able to present those to our clients, make a big impact on them, and then that'll in turn have a big impact in our own lives, personally and financially.
Speaker 2:Well, I want to thank you for being part of the Do Delicious Project. I want to thank you for sharing your wisdom with our community and I know your clients are very grateful to have you, and I know your future clients are going to be very grateful to have you as well. Josh, we're grateful to have you. Thank you for the work that you're doing and today we just got a chance to feature Josh Dixon and very humble guy. He doesn't like to talk too much about himself but meanwhile, very quietly, has delivered massive, significant, life-changing value to many clients. Maybe they're not worth billions of dollars, but a million bucks is a million bucks. Josh, thank you so much for today and looking forward to another great year working with you. Thank you, alex.
Speaker 1:That's all for this episode of the Due Diligence Project podcast. Be sure to visit due diligence projectcom 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.