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
023: Creating Exceptional Client Value and ROI - Eric Aragon
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.
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.
Speaker 2: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.
Speaker 3:Thanks, alex.
Speaker 2: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?
Speaker 3: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.
Speaker 2: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?
Speaker 3:It's sort of a funny story.
Speaker 3: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.
Speaker 2: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 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.
Speaker 3: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.
Speaker 2: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.
Speaker 3: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.
Speaker 2: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?
Speaker 3: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 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?
Speaker 2: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?
Speaker 3: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.
Speaker 2: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 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.
Speaker 2: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.
Speaker 3: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.
Speaker 3: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.
Speaker 2: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?
Speaker 2: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.
Speaker 2: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 and wide and not scared because it's okay to upset the specialist, it's okay to upset me.
Speaker 2: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.
Speaker 3: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.
Speaker 2: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.
Speaker 2: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.
Speaker 2: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?
Speaker 3: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.
Speaker 3: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.
Speaker 2: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.
Speaker 3: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.
Speaker 2: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 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?
Speaker 3: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.
Speaker 2: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.
Speaker 3: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.
Speaker 2: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.
Speaker 3: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.
Speaker 2: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 for our audience, and it could be something fun, or it could be something anything that you could think of.
Speaker 3: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.
Speaker 2: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.
Speaker 3:Thanks for having me Alex Take care. Thanks so much.
Speaker 1: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.