Heidi: 00:04

Welcome back to the Slash Tax Podcast, where we dive into the strategies, secrets, and success stories behind slashing your tax bill legally and ethically. With insights from top CPAs, investors, and tax pros who know how to turn the IRS code into a wealth building tool. Today's guest is well, it's not just anybody. He is my boss, my mentor, and my business partner. He is also one of the most influential voices in tax reform today, known to his millions of followers online as the tax reform expert.

Heidi: 00:38

I am thrilled to welcome Julio Gonzalez, the founder and CEO of Engineered Tax Services, the nation's largest specialty tax and incentives firm and the proud sponsor of the SlashTax Podcast. Julio founded ETS nearly twenty five years ago, blazing the trail for engineers and tax pros to work hand in hand helping businesses unlock powerful incentives like cost segregation, R and D tax credits, 179D deductions, just to name a few. Today, ETS supports CPA firms and business owners nationwide in legally reducing their tax liability so they can reinvest those dollars back into their businesses, communities, and their legacy. But that's just the professional side. Julio is also deeply involved in Washington, D.

Heidi: 01:23

C, shaping tax legislation and fighting to preserve incentives that benefit small businesses and job creators across America. Today, we're pulling back the curtain, talking about where it all started, why he built ETS, what drives him every day, and the impact that he's had on thousands of lives and businesses across the country. Julio, welcome to the show. I know your story, but I would love for our audience to hear the why behind what you're doing. So let's start with why did you start Engineered Tax Services?

Julio: 02:05

I've been doing taxes since the nineteen eighties, and I was doing it for the Fortune 500 companies, c level executives. And we were eliminating the taxes. We were using every word in that tax code, over 2,000,000 words. And, through those powerful words, we were finding powerful ways to eliminate tax and take advantage of all the programs. And I saw that there was a big inequity.

Julio: 02:31

Right? That I knew that small business owners, entrepreneurs weren't getting the same access to those tax credits, incentives, grants because accounting firms beyond the big eight at that time wouldn't have the resources, wouldn't have engineers, wouldn't have tax attorneys, and wouldn't have specialists. So I knew that there was a big opportunity to bring tax equality to, small business owners, entrepreneurs, individuals, and that that tax benefits that we did at the fortune five hundred level didn't have to reside there. They could be enjoyed by all people.

Heidi: 03:04

Yeah. I mean, it's huge because at the time, no there I mean, were there any, like, boutique specialty tax firms?

Julio: 03:11

No, there were none. There were just a few of us that kind of frontier pioneered this industry. And, we're all still around and, still working away. Obviously there's a lot more, competitors out there today, but it's been a great industry to, frontier pioneer and and ultimately, you know, bring these resources to, so many wonderful people in our country.

Heidi: 03:36

Yeah. Absolutely. Well, what what made you focus specifically on cost segregation? Why was that the thing that you led off with?

Julio: 03:44

I led with that one because I thought that would have the most impact. And there was zero information on cost segregation. Right? It's not part of the tax code. So that makes it even more difficult, right?

Julio: 03:57

Because the tax code is just about depreciation. And there was a court case, right at the same time, 02/2001, that basically identified how people could write off their properties. And so, then you have to get into the court cases and Hospital Corporation of America won this amazing, amazing, court case where they could depreciate their properties, their hospitals, but they had to do so under an engineering report. And so gosh, there was very little information, but I just felt the passion. I thought this could really, you know, because we we did that those kind of studies back in the eighties and nineties for, Fortune 500 companies and their properties, but there really wasn't any guidance.

Julio: 04:39

So even there was a little bit more of a frontier, but we got some guidance and, you know, we use that in the IRS court cases to, you know, launch an industry we thought could help all Americans.

Heidi: 04:51

Well, it's amazing because the way that you have pioneered the industry is so profound, really. Although we get frustrated at times because there are a lot of imitators out there, but I don't think Well, I think we have made a concerted effort to really still continue to share valuable content and information, knowing that that may be copied, that may be imitated, but it doesn't change the fact that you really were the pioneer in this space. What did the industry look like back in those early days?

Julio: 05:25

It was basically invisible, nonexistent. And we didn't have, like, search engines, the Internet was kind of in its infancy. You couldn't find anything on it. And, you know, like, you couldn't, like, just reach out to accounting firms because even that was more difficult. Right?

Julio: 05:42

So, know, it was like, I'd go to one state every week, every year, and, pick a state each week, and then just drive around, print out the, MapQuest, and go Yep. Meet every CPA firm I could, and just share with them how we could help their clients in real estate. And, it was so great that it you know, it was a lot of fun back then, a lot of traveling, and, meeting so many great accountants who still work with us today.

Heidi: 06:10

Yeah. I mean, it is amazing, and it was an interesting approach to work with the CPAs and help them understand something that's really, really technical, and then how that could benefit their clients. Was that difficult from an educational standpoint? Like to to help teach, how did you get that message across to have this industry embrace something that was probably foreign for small and mid sized firms at the time?

Julio: 06:35

It was extremely hard to educate, Heidi, because there was no Internet. Right? There was no way to validate, you know, what we were doing. So, you know, you had to show them the court cases. They had a read up on it.

Julio: 06:49

And, you know, you would meet the proactive accounting firms that said, Yeah, this makes sense. And, unfortunately, a few of them would give you a couple projects, and, and then it kind of multiplied from there. Because it was just me, right? So it was just me traveling, doing the reports, doing the studies, invoicing, doing all those things. But ultimately, yeah, there was no there was that the teaching was horrible.

Julio: 07:15

I mean, I would go to CPA conferences and try to share it and teach it. Again, there wasn't a lot of guidance though.

Heidi: 07:23

Yep. Yeah. I mean, true, truly pioneering. So when you look back over the last twenty five years, what are you the most proud of with building this company?

Julio: 07:35

You know, I'm most proud that, you know, we brought this kind of tax equality to the country. Think, you know, I don't know how the percentages, Heidi, if there were 0% of people, you know, that were not fortune 500 companies doing cost segregation in 02/2001. And who knows what that percentage is today? It's probably still a low percentage, but it's not 0%. Right?

Heidi: 07:59

Right.

Julio: 08:00

You know, we have a lot of, competitors out there and a lot of people doing cost segregation studies. So now we know that it's out there and it's front center. Think a lot of people are hearing about it. Even though, do you know today, we still hear a lot of CPA firms that don't know about it or, you know, real estate people. So, we're, know, we're continuing the literacy.

Julio: 08:21

But, what what a change from where it was zero on the Internet. If you Google it now, right, a million searches come up.

Heidi: 08:28

Right. Exactly. I know. It really is. And and the way that different providers are offering, you know, different types of studies, it's not necessarily all created equal.

Heidi: 08:38

In terms of what the industry looked like twenty five years ago, talk a little bit I think there's been a dramatic shift in what we call cost segregation in a couple of different areas. One, pricing. I mean, I even remember, I've been working for you for almost fifteen years and just in that span, the difference in the scale of projects that we can apply cost segregation to and the price point for projects of all sizes has shifted pretty dramatically. I think fifteen, twenty plus years ago, we were selling cost segs for what, 5 and six figures. So that's been a big shift.

Heidi: 09:15

Talk a little bit about how that's shifted. Maybe that's not the best thing for businesses if we look at it and say, Yeah, I'd love to be able to charge $25,000 for a cost segregation study. Now it's completely different. Talk a little bit about how it was then and where we are now and why, why you think that's occurred.

Julio: 09:35

Yeah. Well, back then it was more contingency based, right? So if we were saving someone a million dollars, which is common in a cost segregation, say, where we're charging, you know, 10% of the benefit. Right? So you're right.

Julio: 09:47

7 figures, 6 figure fees. Yeah. So that's all changed, it's become, you know, more widely accessed and more of a commodity. Right? Even though I think the standards are different, and you, like you talked about, there's a lot of differences in, you know, the kind of products that are out there today, Heidi.

Julio: 10:04

But ultimately, yeah, much different. Right now, it's, you know, strictly fee based and, you know, it's try it's driven on, you know, really more of the engineering time more than anything today. Right? So it's a big difference, but, you know, we make up with it from volume. Right?

Julio: 10:20

We do, you know, so many studies today and helping so many people that Yep. You know, it's it's allowed the volume, right? The prices come down, which has allowed more access to, to everyone. I think that's good.

Heidi: 10:33

Yeah, absolutely. Well, I mean, I think that that really is what you have achieved is your goal was to bring this opportunity to all taxpayers, to create that equality of tax strategy and opportunities financially for people of all ranges. You've built more than just a company. You've built a mission in terms of taking that out to taxpayers. Part of that, interestingly enough, I think is because you've invested so much in scaling your business and working hard to make it as cost effective as possible, We look at the fact we're doing, what, 600 site visits a month all over the country, all 50 states, and yet we've been able to do that in an economical way to where now it's not just applying to this giant skyscraper hotel, the Trump Hotel.

Heidi: 11:25

This is applying to short term rental properties and everything in between. I I love to focus on the mission of what you've been driving, what you've been building. So what drives you just to continue every day doing this work?

Julio: 11:44

Well, I just think for me, the passion that, Heidi, when we do a study, when you do a study for a client, right, you're saving them millions of dollars, right? And that helps them preserve their wealth, and build their businesses, and build industry, and build their local, GDPs. And I think that's so vital, right? If we're taking advantage of these tax codes, these tax benefits, then ultimately, we're all preserving wealth and building jobs, creating economic good for our country. I think all those things are awesome.

Julio: 12:15

And we just don't do cost segregation. Right? We do other things that help impact those things as well. So ultimately, it's great to see that, you know, the government gives us, tax code and tax policies that reward investors, reward you investing in yourself. And ultimately, those secrets, you know, we're kind of, letting them out, letting those secrets out, right, so that everyone can enjoy them.

Julio: 12:44

But, you know, that's good for our country. Right? Good tax policy that's enjoyed by everyone and has access to everyone. I think those are good things.

Heidi: 12:52

Yeah, absolutely. Well, and that actually segues segues into you truly. I mean, it's like you are a consummate entrepreneur and you always talk over the years working with you. You're always using the example of Blockbuster and companies who were at a time were so fundamental to our daily lives. And then almost overnight, we're just gone because of innovation and technology.

Heidi: 13:15

You have always had such a unique willingness to invest in your company, willingness to be open to evolving and growing and shifting as we see opportunities that exist for clients, for taxpayers. Also, we're always dealing with changing tax code regulations, which is pretty impactful for a business like this. Talk a little bit now about where ETS has gone. It started off as a cost seg firm, but you have continued to encourage and invest in growth, expansion, and evolving that brand to service people in all these different areas. You just mentioned that we do a lot more than cost segregation.

Heidi: 13:53

So will you talk a little bit more about that, about how we have expanded and why you've wanted to do that?

Julio: 14:00

Yeah. Yeah, it's just been so fun. I think back 02/2006, this tax code comes out, this new tax bill, and they made energy efficiency in buildings a tax benefit credit and incentive and deduction. And ultimately, when I read the tax code in 02/2006, it was had to be certified by a licensed engineer. It was so complicated.

Julio: 14:25

I mean, even for myself to figure it out was complicated. But I was like, well, let's let's see what we got here. Now, that for sure, when that came out, there was zero people on that business. Right? I read the tax code.

Julio: 14:39

I was like, maybe I can do something with this tax code. And, you know, ultimately, it takes a licensed engineering firm, which we are. Right? We're one of the few people that's licensed engineering firm. And, ultimately, what can I do with this tax code?

Julio: 14:53

And, you know, that's you know, I started with the accounting firms that we had built from 2001 to 2006 and said, hey. We got something else here for you that I think can really help your clients, and they can take advantage of these tax benefits. And that one was complicated. Now, you know, there is more information available at that time, but, you know, trying to like, the IRS puts out a code to incentivize building energy efficient buildings. Right?

Julio: 15:17

Because they wanted to take that pressure off the infrastructure of the country, right? And remove all this costs associated with building power. And so they thought the biggest way to do that is to incentivize building owners to be more energy efficient. So that was the cost and reward that the country was thinking of. But when, you know, people from Congress that have never, one, been an engineer, and two, never had a class in taxes, create energy tax policy.

Julio: 15:47

Well, now they're doing things that CPAs and engineers cross together. And I mean, it was a nightmare, right? Because they came up with all these different ways of certifying it. But ultimately, you know, we, we digested it and started promoting it. I started hiring engineers to help me, model it.

Julio: 16:06

I first of all, it was just it took me a year just to figure out how do we interpret this code. And then how do we model it? Because there was no software back then to do it. So then you had to go use a architecture software and then kind of reverse engineer it for what we were doing. So it was incredibly complicated.

Julio: 16:26

And, yeah, we definitely birthed that industry. Yep. We are. 01/7019. Yeah.

Julio: 16:32

So forty five l two. So, you know, that's that industry we started. And, so again, and then the CPAs said, well, what else can you help us with? And then we evolved to r and d tax credits. And, we thought that was a natural for our CPA firms because a lot of them didn't have the resources.

Julio: 16:53

And we used to outsource that originally. I remember that I would get a lot of requests for that, and we would outsource it. Then we brought it in house to, better control it and better, work with our accounting firms. And that's an amazing credit, right? It's a refund of labor and, for innovation.

Julio: 17:08

So it's an important tax credit, and we thought that would help really well with our accounting firms. And so, you know, that was our third kind of leg on the stool. And yeah. So it it's been great to, you know, kind of be the forefathers in those areas and bring those credits to mainstream America through our accounting partners. And that's been a lot of fun.

Heidi: 17:32

Yeah. And it's constantly evolving, constantly finding those opportunities. And it's, you know, it's fascinating. Our timing this is perfect. We're a month into the passing of the the one big beautiful bill, and there are always opportunities.

Heidi: 17:45

There are things that close and end and get sunsetted. There are new things that are brought on board. You have been very active in Washington, D. C, again honing in on your Instagram, your Tax Reform Expert page, and the work that you do in D. C.

Heidi: 18:02

When it comes to tax policy. Can you talk a little bit about your involvement with tax reform and why that's so important?

Julio: 18:09

Yeah. I was fortunate to be put on the tax policy group by the administration. And so me, Steve Moore, Art Loffler, Larry Kudlow, a few other people. And really just going back and forth with Congress, with Ways and Means Committee chairman Jason Smith and on senate fi finance, Crapo, because those two really were gonna create the, new tax bill that was definitely gonna advance. Right?

Julio: 18:37

But ultimately, you know, giving them some insight into when they make a change in the tax bill. You know, like, everything that gets changed in the tax bill, we've done before over the last hundred years. We've had a tax bill for you know, we've had taxes for a long time, right, since '19, '14. So when you know that you've had it for over a hundred years, you know that you would probably done everything over those hundred years. Yeah.

Julio: 19:02

You know, then administrations come in and change the tax code, and ultimately, things works, things don't work. So, you know, trying to give Congress that feedback and, you know, share with them what works. And a lot of times, they'll make a change on the tax code, but ultimately, it doesn't have any impact because of AMT or other limitations. So, then you kinda gotta walk them through those and, you know, let them know that, okay, like, the salt bill, at state and local taxes, you know, they they wanted it to be higher. But a lot of people that get salt deductions, it's phased out through AMT.

Julio: 19:34

So, really doesn't have the impact that you think it would. So kind of walking him through those things and determining, okay, what's working? What's working? You know, and we're fortunate enough to get feedback from so many thousands of accounting firms on what works and doesn't work in this tax bill and share that with them. And who else has a better, you know, finger on that than us?

Julio: 19:57

Right? Because we work with so many accounting firms. And, you know, the other people on the tax policy group come from economic backgrounds. And so I think we were talking for Main Street America and representing every individual and, you know, sharing what really works. And, fortunately, we got that tax bill done by July 4.

Julio: 20:17

I thought we would. You know, you never know because Elon Musk then starts not liking the bill and gets a few senators upset and congressmen. So, yeah, it's a roller coaster. Right? You never know if it's gonna get through, and it barely got through in 02/17 2017 when we had a tax bill that was gonna, you know, get done.

Julio: 20:34

But we did get it done. I think it's been tremendous. Tremendous. Because we see that. We've even seen the increase in our business.

Julio: 20:40

Right? Because people are now able to take advantage of this. Now we can go back with the r and d tax credits that they basically, and, you know, with the last tax bill made ineffective. Right? So Yep.

Julio: 20:50

It wasn't working. People were offshoring. People were taking their business offshore, and employment was going away. And we needed to fix that, right, and fix the r and d bill. And we made it so that you can go back three years and get refunds.

Julio: 21:03

So thank God we fixed that. And

Heidi: 21:07

and that it's you're you're rerolling right into my next question. Was gonna ask was what are what do you think are the biggest threats and opportunities that we see right now with tax incentives? And I think you're spot on with R and D credits, now the repeal of amortization, so it's full expensing plus credits to help really build innovation. Is there anything else you see as big threats or big opportunities as a result of this tax bill?

Julio: 21:32

Well, you know, the big threats in this bill were always gonna be the energy incentives. Right? Because I think this congress felt that it was, you know, not a return on investment, like some of the other tax benefits were in this country. So we knew that a lot of those energy green tax credits, things of that nature, we're gonna get phased out. And that was, you know, good.

Julio: 21:55

And even like one seventy nine d 45 l energy efficiency on buildings. I mean, a lot of that's gonna be phased out as well. But I think that ultimately those are good things, right? Because we're finding things that are working for the country, eliminating things that don't work as well. And, I think we got it right in this bill.

Julio: 22:13

And the biggest thing, Heidi, is we made it permanent. Right? So Yep. Business owners don't have to wake up every New Year's Day thinking, I have a new tax code. What do we do?

Julio: 22:24

CPA firms too. Right? It's always constantly changing. So at least with some permanency, I think that's grateful that, you know, small businesses now can say, all right, I got R and D tax credits, and it's permanent, and it's not gonna phase out. It's not gonna change.

Julio: 22:40

Bonus depreciation, permanent. It's not going to change. It's not going to phase out. It's not going to be 80%, then 60%, then 40%. Right?

Julio: 22:48

So those are amazing things, right? To have permanency. That's one thing that we didn't do in 2017. And unfortunately, you know, it costs a lot of Americans, just uncertainty in accounting firms. And, you know, accounting firms hiding probably take a year to catch up to new tax code.

Julio: 23:06

Right? So there's a lot of people, a lot of business owners that will probably miss out on the benefits in the current year because it's just digesting all that information. Right? They're just finishing up last year's tax returns.

Heidi: 23:19

Yep.

Julio: 23:20

Then got what, three months to do tax planning before midnight hits on New Year's Eve. Right? So, you know, think about it from their perspective. New tax code, they're wrapping up last year's extensions. And, so, you we're going to see a lot of Americans unfortunately probably miss these tax benefits, but maybe this education, these podcasts will help people be more aware and put more pressure on their accounting firms to take advantage of certain things.

Heidi: 23:46

Yeah, 100%. Because that really does tie into how we continue to expand and see those opportunities with now, because we've identified cost segregation or R and D credits or other things. Now we've got this acquisition of an amazing platform to identify incentives for business owners. It's not just cost seg and R and D. It's anything that can be applicable for that particular company, and then really helping with that higher level strategic plan.

Heidi: 24:15

Because I think in the big scheme of things, think their CPA is going to do both of those areas, really look strategically and planning with them as a business owner and how they can implement this stuff, and then also do compliance, which is the tax preparation. But what we're finding is that the industry is beginning to split, and we're seeing a separation between compliance and tax filing versus strategic planning and working with businesses on incorporating all of those things. What was your reasoning or thoughts behind acquiring a platform with this whole plethora of incentives?

Julio: 24:54

Well, just great fortune. You know, fortune, I think you introduced me to that company. And, so, you know, they were tech people that were amazing at building a platform to find all these incentives, but they didn't have a way to get it out to the masses, and they thought our distribution could do so. And I thought it was a natural fit. So that was the reason for the acquisition because, you know, more than the tax benefits that are missed by all Americans, entrepreneurs, minority business owners, women owned businesses, are those incentives, those grants, those programs that are available to everyone, and they're just missed.

Julio: 25:32

But we know that the biggest user of grants and incentives are Meta, Tesla. Right? They take billions of dollars on grants, but everyone has access to them. Creating that awareness, I just think, was so smart. And, you know, using our accounting firms to educate the, individuals and small business owners, I I just think what a great fortune.

Heidi: 25:51

Yeah, absolutely. Well, on that note, you have worked with some of the biggest names in business, some of the biggest family office groups. Really, you are in a sphere. You're based in West Palm Beach, so in the Palm Beach crowd, are enveloped in an amazing group of people that have such an impact in our country. But what is a case or client or story for you that stands out to you where you felt like you really made an impact on them because of the work that you do or this company does?

Julio: 26:27

That just keeps evolving every day. Right. Heidi, you're right. I'm lucky to be in Palm Beach. Right?

Julio: 26:34

So what great fortune. Who knew that the economic center of our country would come to Palm Beach? Like, yeah. No. No.

Julio: 26:42

No. No clue that that would ever happen. Right? We're just a small little island here in Florida, But it has happened, and it's brought the hedge funds and the CEOs of private equity here. And it's really become the headquarters of economic activity in our country.

Julio: 26:56

And so every day, I'm meeting these CEOs that are you know, in meeting them, they're overpaying their taxes by $1,020,000,000 dollars, and they're not getting the, tax plan you talked about. There's tax planning CPAs. There's reactive, accounting firms. Right? We're trying to work with the proactive ones and push them to do better with their clients and, keep their clients right through tax planning.

Julio: 27:21

But it's, you know, again, tough to catch up with new tax code every few years and, and and changing tax codes. So we get it. And that's why we're that resource to them. And, but I don't know. Every day, it's so what somewhat somewhat amazing.

Julio: 27:36

Steven Ross, right, that owns one of the biggest, you know, real estate companies owns the Miami Dolphins. You you work with some NFL football teams too, and some of those families. That's pretty cool.

Heidi: 27:47

Yeah. It does.

Julio: 27:49

You know, we've, you know, I've gotten the opportunity to meet with Elon Musk and, you know, and president Trump over the years and work with them. So, it's been a fun journey, but just kind of a lot of luck. But you're in a great place in Vegas too, so I imagine you get to meet a lot of amazing people as well.

Heidi: 28:08

It's pretty amazing. Our team is all, I think, located in logistically perfect places. So what advice do you have for entrepreneurs or taxpayers who feel overwhelmed by the tax system and they want to take control?

Julio: 28:24

Yeah. I think more than ever, Heidi. I I think the podcasts are really helping. It sounds like that education is working, that entrepreneurs are taking advantage of podcasts to get updates and information on how they can do better in their companies. And so creating that content that you're doing, I think is super helpful.

Julio: 28:45

I think just using AI, right, and saying, I have a business in manufacturing here in IDAU. Right? And what what's available to me? And being proactive with that information then and going to your accounting firm and saying, look. I think that I'm seeing these opportunities.

Julio: 29:03

You know, A's especially AI's never write about taxes. Right? Because the tax policy has changed a 100 times right over the last ten years. So every time I read the AI when I type in a question, it's like, well, that's from, like, ten years ago. Even today's it's not up to date.

Julio: 29:17

It's not up to date on bonus or anything. Right? But ultimately, you know, it can point you in a good direction. Right? And, but, you know, seeking out, I think the biggest thing, like with health, is being proactive.

Julio: 29:31

Right. And not being reactive. Right. And taking care of yourself and health and wealth. I think those are so vital.

Julio: 29:39

I can tell you this. In 02/2001, you know, when I owed taxes to the IRS, I realized that, hey, I could eliminate the taxes by investing in real estate and taking advantage of these tax codes that allow us to buy investment in real estate and offset our income. Right? So our taxable income. So, you know, so I took the same money that I owed the IRS, and I said, okay.

Julio: 30:07

Well, I'll just use the tax code by a property and do a cost segregation setting. And now I take a million dollars of tax liability and took and convert it to a $5,000,000 apartment that paid dividends and provided all these tax benefits for twenty years and appreciated over those twenty years. Right? So that $5,000,000 apartment in 02/2001, you know, became $80,000,000 apartment twenty years later. But it was just doing things like that every year, Heidi.

Julio: 30:37

Being more I was proactive with myself. Mhmm. And saying, okay. If I owe a million dollars, what things can I change? Can I increase my IRA?

Julio: 30:47

Can I put money into education? Can I invest in myself? Do I need to buy more equipment? Right? Is it real estate?

Julio: 30:54

You know, and this is where we've kind of evolved, right? We're not only helping people with these tax credits, incentives, grants, but we're also tax planning, helping the accounting firms help their clients, and giving them access and ideas to, to share with them. I think it's so amazing that, you know, like, if you take care of your health and, you know, are proactive, you can now do peptides and PRP and all these amazing things. Right? But you can do the same thing with taxes.

Julio: 31:19

Yeah. And it makes all the difference in world.

Heidi: 31:23

It is knowledge is power, and we have more access to it now, I think, than ever before in history. And it's overwhelming, but it is so powerful.

Julio: 31:31

But how great is it? Right? I mean, I don't know. Like, you know, I always hoped that one day everyone could have access to the tax code. I mean, look, we've made a big inroads.

Julio: 31:44

We probably, you know, worked with several thousand accounting firms, but how many more accounting firms don't know when how many individuals don't know? And, and Heidi, our, our, our mixes and clients has changed. Right? A lot of clients come. We've always gotten the client from the accounting firm, but a lot of people come to us directly because they're looking online.

Julio: 32:03

They're using these tools. And and then we're, you know, backing into their accounting firm and getting to know the accounting firms. Because ultimately, we, you know, we don't do tax returns. Right? We're just a resource for doing these, incentives and credits.

Julio: 32:15

So it's so cool as involved in and Heidi, I would say, like you say, we invest in the business who, who thought even five years ago that a service company, their highest payroll would be in technology. Know, it's just mind blowing to me that our biggest department in terms of expense now is, is technology. But without technology, we can't scale them without scaling. We can't help more people.

Heidi: 32:40

Absolutely. Well, think that is a major point. And before we wrap up, I was wrapping up with my last question, but I do have one more question on that point with technology because I think it's so important. We have always made a decision to say we are about white glove service. We are professional services firm.

Heidi: 32:57

We are here to serve our clients. We want to be subject matter experts and partners in their success. And so we have had to continually have this discussion about how do we redefine that and maintain that, which is what we have identified ourselves as, but use technology to create efficiencies and to make it as cost effective and as quick as possible for taxpayers, but still keeping that level of service in detail. Because we are moving into an era where now there are companies that are entirely technology, entirely software based. And I think that what we do is dramatically different.

Heidi: 33:38

So what is your take? What's your thoughts on all of these tech companies that are popping up? Maybe saying, Hey, we do cost seg studies. When you say we have a big tech department, I would love for you to explain to listeners a little bit about why we're doing that, but where that differentiation lies between a calculator type of a product versus what our company has been.

Julio: 34:00

Yeah. Heidi, even with technology, there are companies over the last decade that kinda did calculator approaches. Right? And you could say they're like sampling approaches. Right?

Julio: 34:13

So ultimately, you know, that kind of study that's now evolving with technology. Right? So you probably 50% of the companies out there are just technology based calculators. I would say that that's where the benefits missed. Right?

Julio: 34:30

Because, you know, you can use technology and we use technology to scale and continue to bring down prices and create more access. But ultimately, it's the details that matter with these studies. And ultimately you just can't get those details now. You know, like cost segregation is so specific. It's so intimate.

Julio: 34:50

You have to know every answer to that building. Right? And you have to know it so well. And you have to know the electrical panels, and you have to know the attachments to the roof, and you have to know the HVAC systems, and you have to know the codes off these things. So can technology, you know, cut that down and, and maybe, know, to some people, white glove services never happened to talk to someone.

Julio: 35:12

So I get it. But you also then miss out on a lot of the benefit and the cost is not that much difference. Right? So white glove is starting from, you know, educating the client. And you do a great job with that in person and videos, getting them really educated on what cost seg is about.

Julio: 35:28

And then how do we use that education in our experience to get the most benefit for them? And maybe they want a path of less touch, right, and less human contact. And and we can drive that way. Right? But then we're never gonna get that benefit.

Julio: 35:43

And cost segregation studies and other kind of studies, right, they're so intimate in the sense that you really want to get the most out of them. Right? You want to get the most benefit out of them. And so you have to still do service. Like, you know, CEOs from accounting firms call me and say, hey, we're gonna be zero, you know, human touch, and we're gonna be all technology in a few years.

Julio: 36:06

And, you know, in tax, that doesn't just translate a 100%. Yeah. In tax, it's still, you really have to know the client. You have to know the property. You have to know so much about it that, you know, technology is helping us though.

Julio: 36:19

It's helping us do things quicker and gathering information quicker. But still you have to have a little bit of personal touch, which I think really getting to know the client and getting to educate them is, really important.

Heidi: 36:34

Absolutely. Well, I think you absolutely nailed it. The benefit is in the details, and I think that is the ultimate difference. I think what our mission is now is really beginning to shift from just simple education of what cost segregation is. Now it's becoming much more common.

Heidi: 36:55

It's beginning to define the differences of different types of studies and ultimately what you get as a deliverable because they are not created equal. And I love what you have always built, being committed to excellence, committed to the details, committed to understanding clients, to the education. But to your point, understanding people, because cost segregation may not apply to every person. It is in the details of their tax situation as well. I think that is really what we've been able to bring to the table.

Heidi: 37:28

You have always been completely committed to that level of excellence and that detail.

Julio: 37:33

Yeah. I would say one thing about this, Heidi. I would say one thing about this. The IRS is a roller coaster, right? So you can take shortcuts, and people have taken shortcuts on cost segregation studies or R and D tax credits.

Julio: 37:46

And we've seen people in our industry that have taken those shortcuts. And what happens? The IRS changes. In three years, we have a new IRS. We have a new IRS commissioner.

Julio: 37:57

And they go after those people. Right? And so they throw them out, they put them in audit, and ultimately, we've seen a lot of our competitors that are no longer in business because of those shortcuts. Right? And unfortunately, it hurts the clients and the CPA firms that sign the tax returns.

Julio: 38:15

So we gotta meet those standards. Right? We can't the the IRS is no joke. Yep. And they'll come back ten years later.

Julio: 38:23

Right? So you know? And it's just you know? So let's just do it right. Like, we've always said, let's just do it right.

Julio: 38:28

Let's have that standard of excellence. And you said the other thing I think you said was important is that sometimes these people are using technology to get the study, and they can't even use it.

Heidi: 38:40

Mhmm.

Julio: 38:40

Right? So, you know, it's not only just here, we can get you a report, but how can you use technology to create a site visit of a property? You just you can't do it. I mean, there's extra steps you gotta take, and you have to be able to defend your report. Right?

Heidi: 38:56

Exactly.

Julio: 38:57

Because the IRS is when they're on you and they're looking at these reports, they're relentless, and they And, can you know, fortunately, we have the details that we can defend our and we, you know, we do get occasional audits, but I think we have a good reputation. And, typically we get through those things fairly easy and we don't cost our clients or their accounting firms any issues.

Heidi: 39:18

That's amazing. Absolutely.

Julio: 39:21

Well, I'll use this reference and I think this is really sincere. I wouldn't want to go to a doctor that isn't white glove service for an issue, a personal medical issue. Right? So I really think, like we say, health and wealth, I think they're so closely related. And I wouldn't take shortcuts with the doctor.

Julio: 39:45

I wouldn't take shortcuts with the IRS. And it doesn't cost that much more. And you get so much more benefit from it. Right? Spend a little more time.

Julio: 39:53

We spend a little more time. And listen, the fees tax deductible anyway. So, you know, it's not really that big of a difference.

Heidi: 39:59

Right. I mean, that's the exact conversation. I just had that conversation with a client like an hour ago, and he was asking about that. I said, look, the price difference is the price difference. We may not be the cheapest, but we're talking a thousand, a couple thousand dollars maybe.

Heidi: 40:13

The difference is exponentially more benefit. I mean, in some cases we're talking about hundreds of thousands, hundreds of thousands of dollars of difference in increased benefit for $1,000 or $2,000 difference is oftentimes what we see. It's so dramatic, but it's just a matter of not knowing. I think that's why these formats and this shift of people listening to podcasts and being on social media and looking for resources is tremendous. Yeah.

Heidi: 40:42

Because again, information is power. I think it's amazing, and you've done an amazing thing.

Julio: 40:47

Thanks. And Heidi, one thing. You know, when you have the details, then you can use the report to do updated annually for dispositions and things that are coming out of the property, right, or being exhausted or being worn out. And, you know, without the details and some of these automated reports, you can't do that. So you miss out on not only the current benefit, but future benefit and being able to manage recapture.

Heidi: 41:13

Yep. Yeah. Absolutely. Oh, that's a whole we could do a whole podcast on recapture and mitigating the tax on the back end. We'll keep that for round two.

Heidi: 41:22

Okay.

Julio: 41:23

Fair enough.

Heidi: 41:24

Julio, thank you so much for joining us today. I appreciate your time so much. You truly have become such an icon and a pioneer in this industry. It's been an absolute pleasure working with you.

Julio: 41:36

I appreciate it.

Heidi: 41:40

Julio, thank you so much, not just for being here today, but for your vision, your leadership, and the impact that you've made in this space. I've had the honor of working for you for almost fifteen years, and it has been inspiring to see how many people's lives have been changed through the work that ETS does. And to our listeners, if you've enjoyed the conversation and you want to learn more about how engineered tax services can help you slash your taxes legally and strategically, just check the show notes for a link to get your free tax savings estimate or to schedule a consult. Don't forget to subscribe, rate, and share this episode with someone who could use a tax break or just a little inspiration. I am Heidi Henderson, and this is the Slash Tax Podcast, where we turn your biggest expense into your greatest opportunity.