Transcript of The #1 Tax Mistake That Bankrupts Entrepreneurs—Claudia Moncarz Explains How to Avoid It

Once you level up your income, please do yourself a guy's favor and go ahead and get yourself a tax attorney.

I joke that the IRS is my marketing partner. If you don't hire me the first time, you're just going to keep getting letters. Last year, the IRS opened 14 million new accounts. That's 11 million to 14 million people that have that problem every year. It is so common. It's just people don't talk about it. They're ashamed of it. Especially business owners, how could I get into this trouble? I had this couple of clients that had a drop shipment business. Somebody told them they should have fake employees, and then all of a sudden, they got hit with a million dollars.

Hey, guys, and welcome back to the LiveWild podcast. This is Paul Alex, and we have another exciting guest speaker here. She's actually my tax attorney. You guys are going to love this. Why? Because it is very importante, guys. Number one, you guys protect yourself against the IRS. When you start making a little bit of money, guys, Guys, they can literally bankrupt you if you don't do it correctly. She is one of the most important people. She's an asset to my business, and it's going to soon be an asset to your business, especially when you guys are trying to level up in 2025 and beyond. I want to welcome Claudia to the show. To give you guys a little bit of background, she's a powerhouse attorney who has helped thousands of entrepreneurs, including myself, get clarity, confidence, and protection from the IRS. Claudia, a Latina attorney based out of Florida, guys, who turned her love for language and law into a career built on helping small business owners, just like myself, guys, take control of our finances. Her journey from Panama to Miami Courtrooms to building one of the most respected tax law firms is nothing short of inspiring.

So let's get into it. Claudia, welcome to the Level Thank you.

Thank you for having me here.

No, this is going to be a good time. So Claudia, as you guys know, as you know, Claudia, LevelUp is about self-help. It's about helping people that have limiting beliefs, right? Yes. And you In the Latin community, there's a lot of limiting beliefs out there. There's a lot, right? We have parents that are like, Yo, you can't tell me anything, right? And I'm like, Mom, I already built a couple of successful businesses. I've done a couple of quick things in life. I'm still your mother. I'm still your mother, At the end of the day, we're here to shift in the framework of how people perceive what they are capable of doing in life.

And a lot of their money stories. I think that stops. A lot of us Our money stories.

Exactly. And we're going to talk about that. Tell us a little bit about yourself, and we'll take it from there.

Well, like you said, I was born in Panama, 100% Panamanian, but I grew up here. My mom came when I was around second, third grade to study in Texas. And from there, we've been able to always be back and forth between Panama and the US. I was a little bit talking about our parents and the choice that we made. Growing up, he was in my family, that you have to pick one of the three things that you could be, a doctor, a lawyer, an engineer.

Very traditional.

Yes. You pick something else in my family, then, oh, my God, you're going to be a failure.

Yeah, they'll crucify you. Yes. And were you the only child?

I'm an only child.

Okay, so it was even worse for you. All eyes on you. All right.

And I ended up doing law school because I guess since I was little, I was in. But what I really love about being a lawyer is the opportunity to help, especially help our community, our community, Latino community. And now I think more as myself as a business owner more than a lawyer that happens to win a law firm. I'm hearing, thank you for the opportunity to give the knowledge because I always said, knowledge is power. That's how you get to where you want to go.

No, absolutely. And talking to you before the show, we talk about self-education, being around the right people, the community. I mean, what you don't know is what you don't know, right? And that's how I met you. Guys, I'm telling you, back in 2021, back in California, when I made a little bit of money, and it was the first year trying to pay Uncle Sam. Man, Claudia was a lifesaver, guys. So I'm telling you, once you level up your income, please do yourself a guy's favor and go ahead and get yourself a tax attorney.

Got Claudia right here, okay? Yes, definitely. I think one of my first expenses was getting myself a bookkeeper. I know how to do it, but I wasn't as efficient. I'm not as fast. I even have my own CPA, even though I can do a tax return. Because remember, that time that you're taking to Especially we are trained to be like, FYIs, we can do everything, but your time is a limited resource. That's the one thing. It's valuable. Yeah, that's the most... I care more about my time than anything else. Yes. And if you can get somebody that's probably as efficient and can do it better than you than just hand it over to somebody else. Delegate it. Yes. Delegate. Do what you do best, what you're trying at.

No, absolutely. I 100% agree on that. I'm a visionary guy. I'm a startup guy. You give me the ideas, we make it happen. But other than that, I hire everything else out. Logistics, finances, taxes, right? All right, Claudia. So take us back to a time when you didn't know what path you were going to take. Now, I know your entire life you wanted to be an attorney, but did you know what type of attorney you wanted to be?

No, actually, I didn't. I just knew I didn't want to do criminal law. Okay. That's the one thing.

Why is that? I mean, you're talking to a former executive. I'm just saying it wasn't that bad.

No, no. Our family law. I was too emotional. Okay. People in family law, they're emotional. In criminal law, I felt bad for all the criminals. Sorry to say that. I felt bad for everybody. Yeah.

I mean, Don't do the crime. We won't do the time.

But the irony was that my first summer in law school, I clerk for a criminal judge, and he knew that I didn't want... I went to law school. I just didn't know what type of lawyer I was going to be. So he sent me to different divisions and was in probate. And I loved it. I'm like, Oh, my God, that's what I'm going to do. I'm going to be a probate lawyer. And that's when people pass away, right? How to marshal your assets. And I went back to law school. I'm like, I'm going to be a probate lawyer. They're I was like, Oh, but you really didn't know about tax. I'm like, Okay, I'll take a tax class. If that's what you say I have to do.

Change your life.

I loved it. It was the only class in law school that I actually understood it. I could memorize. I did well because I can memorize one, two, three. I'll split it out.

And it wasn't because it intrigued you? You actually really liked it? You were passionate about it?

Most people think lawyers, and especially tax lawyers, are not creative, but actually, you get to be creative. You get to like, Okay, your client tells you this is where I want to get, and you figure out a path to get him there in a legal way and in the best way. So that's why I really loved it. And the irony is that my grandparents from maternal side are accountants. Oh, you said right in. It was meant to be, even though I hated math.

It was meant to be. I mean, I like that. And the fact that they gave you the opportunity to go ahead and actually experience that when you went to law school, right? At what age did you go to law school?

I went straight after graduating from high school. I got I did my undergrad, which was English literature. So that was one where my mom called me. I was supposed to be a policy major, and I switched to English literature because I like books. She called me for a week because she thought I was going to end up in South Beach writing poems, and she was going to have to support me for the rest of my life.

I love that. Were you one of those kids that were like, go to the beach after school or you'll go hang out with your friends, go on the beach? I know that was a very Miami thing to do.

No, I was a nerd. I love books. I I was always a good kid. That's good. I'm going to own that I was a nerd when I was a kid, probably.

No, I love that. I love that. And my wife would say the same thing. She's like, Babe, I'm a nerd. I was just like, No, you're not. And then I got to know her. I was like, Yeah, you're a nerd. But I love you.

I'm following it. It's okay. And after I went straight to law school, and then I stayed an extra year to get a master's in tax law. So I really like tax law.

I love that. I love that. And you're the best of the best. That's why we work together. So let me ask you this, okay? It might sound a little cliché since that you told everybody now on the show that you wanted to be a lawyer since you were a kid. Was that something that your mother, your father, your parents ingrained in you out of the wound? Were But they're like, Gloria, you have to be a tax. You have to be a lawyer. What was it? It was just those three. I know they were very traditional, right?

Yeah. Well, I think it's more like it was an indirect message in my family. Either you have to be one of those three or if I think I had an uncle that he studied music and everybody thought he was going to end up doing nothing. So it was just one of those. But the irony is that in Panama, because you go, like in most Latin American countries, you go straight. You don't do it undergrad. You go straight to law school, and then you go get your LLM because that's like grad school, right? So here in the US, going to law school is grad school, but not... So I think that was interesting when I was finishing law school. So what is your I'm like, I already went to grad school. What are you talking about? So I guess end up getting that LLM was part of like, well, you need something else. But the interesting thing is that most of my family, they are professionals. They are either a doctor, like you said, but not a lot of them are business owners. So that was an interesting change. And even my dad, he's a doctor, but he's tried a lot of businesses that have failed.

And now I notice, after we talked about taking a lot of doing it out of self-reflection. Yeah, and just learning about your mindset and your levels. I think just my dad had those levels because he grew up very poor, my dad. And then I think he became a doctor, and then he's always tried so many businesses that never worked. You name it. I can tell you. But I think that was interesting. I said it myself. I said, When I decided to become a business owner, then it was just I realized I had some limited beliefs because I didn't have that around me. I don't have business owners around me. They're all professionals.

It's all your environment. Yes. I'm pretty sure, did you tell any friends or did you have any naysayers or haters around you during the time where you were like, Hey, I want to be a business owner?

I probably didn't have as much because I started when I had my first child. I think a lot of people like, Oh, she's slowing down because she wants to be a mommy. So they were doubting you? Yeah. So they just thought I was just slowing down because I was going to be a mommy. And my husband was like, Oh, you can do this on your own, and we'll be okay if you not make money. So it was not-So you had the support of your husband? Yes.

And that's powerful.

Yes. I think that's very important, especially as a woman. It is hard to find a man that... My husband's an attorney, but still, he always supports everything, all the crazy schemes I come up with. And what's his name? Philippe.

Philippe. Shout out to Philippe if you're watching, all right, my man? You're a good dude. And just a comment, okay? I like the fact that you guys have a traditional marriage where the husband supports the wife, and he was just like, Hey, you know what? I'm going to let you go ahead and chase your dreams. I think that's powerful.

Yeah, he's always been great.

And now with social media, you don't see that much. You got the men, the women that are trying to find their significant other now. They're like, No, you got to go 50 %. Oh, no, no. The man has to take care of it. The woman has to take care of it. They can't make a decision. What happens with traditional values, Claudia?

I still think it's a 50/50 partnership, but it does. It's really nice, especially as a woman, that when you always have your business, you have to take care of everything. It's nice to come home and have somebody take care of you. Maybe it's not the cool thing to say, but it is. And it's nice to have a partner. It's nice to have somebody to support you. Yes, it's very important.

Very important, right? So let's shift gears now, okay? Let's talk about small wins, all right? I'm a big believer in small wins. I've done a couple of portfolio companies. We've been able to go ahead and become the number one podcast within a short amount of time. Thanks to Emilio, behind the scenes, doing his thing. Nice hoodie, bro. Nice hoodie. But the main thing is a lot of people are like, Dude, how did you scale this so fast? I was like, What do you mean? I just put in the work. So I don't reflect as much. As much as I tell people to reflect on their small wins in their environment and all I'm important is, sometimes I forget myself. I need to take my own advice. But let's talk about your small wins, because I think it's very important. And a lot of people that are watching, they're trying to get that very first win so then they could come out of their living and believe that it's going to work for them.

It's interesting because I journal a lot. Sometimes I go find my journals and things like that. It's interesting to see when I It was just like, if I could just make 100,000, that would be awesome.

If I could just, right?

Yeah. And now when you're like, Oh, I was just finishing looking at my books. I did quite well. Yeah, that went, things like that. So yeah, small wins or even just getting And like you said, we don't remember. Actually, something that a coach of mine, a mentor told me to do was to every night just keep a tab of everything, three wins that you have for the day. And whenever you're not feeling great, you go back to that list because it should be a running list. And then you realize, Oh, I did. Because we talked about being in business is really... It's not hard starting a business. The hard part is staying in because it's just opting down. It's not a linear thing. Seasons. Yeah. There's going to be... And you're going to make mistakes. And it's okay because you learn from them. Mistakes are awesome.

You learn.

That's hard for a lawyer to learn that because in law school, they teach you not to be wrong. Wrong has There's big consequences. That was all something to unlearnt. But I think just even that's a win for me to learn how to run a business, to learn how to... All those, to me, are wins.

Well, I believe you humanized your profession by just saying that sentence. In law school, they taught you to not make a mistake, that you're set to a higher standard, right? Yes. Very similar to first responder, right? Yes. They're like, Hey, you are set to a higher standard. You have to appear a certain way. You have to dress a certain way. You have to talk a certain way. You cannot do X, Y, and Z, which is why I wasn't on social media for eight years, right? Because I didn't want a chance of something ruining my career. So you humanized it by I went ahead and saying, It's okay to make a mistake. It's okay that I don't know everything. And that's why we clicked, because when I was talking to you before the podcast, I said, I'm not the smartest person in the world. I'm a visionary. I'm a startup guy. But if I I don't know something about Texas, I'm going to find the right person.

But you don't want to be the smartest person in the room. You don't. I want to be in the room where I'm not the smartest person.

Exactly. And that's how you level up fast. Yes. That is actually the cheat code to success. And a lot of people now have access with social media. After this podcast, you're going to tell people, obviously, where to find you. And for everyone listening, we have 100,000 downloads a day. We have millions of people that listen to this podcast, guys. And because of you, we're number one in business. But what I would recommend for every single one of you guys is to actually reach out to Claudia if you do have a business or you're thinking about going in business, because you don't want to be in debt to the IRS, guys. This is not fun. I've learned a big, big mistake when it comes to taxes, IRS, and all that jazz.

And yeah, it's a lesson learned. I joke that the IRS is my marketing partner, because if you don't hire me the first time, you're just going to keep getting letters, and eventually you're going to have to... I joke that. But if you read their mission statement, it is to get—I'm paraphrasing this, the most amount of money in the fast amount of time. And there are persistent to you. They are. I've been practicing for about 20 years, and out of those 20 years, only one time did I have somebody that got in trouble because they actually made a mistake. No, they chose to hide their money. Everybody else is a mistake. Last year, the IRS opened, I want to say, 14 million new accounts for past collections accounts. Wow. And that's up from usually 11 million. So that's 11 million to 14 million people that have that problem every year. It is so common. It's just people don't talk about it. They're ashamed of it. They feel bad, especially business owners. How could I get into this trouble? How did I not plan for this? But it happens to everybody. I made mistakes, I made mistakes and tax mistakes I had to get a friend of help to help me fix it.

I do this for a living. And my first year, actually, I'm not going to say it's my first year, I went to have to plan my own business. I set myself to be an escort, but I couldn't get myself a salary every year, every month, because I just couldn't. It was my first month. Then I got a letter from the Department of Revenue from Florida. You haven't paid unemployment. Why? All this penalty is like, Oh, my God. I couldn't fix. I tried to explain to them. I actually had a A brand that helped me fix it. And I do this for a living. So if I can make a mistake, anybody else, especially when you're in business, you have so many hats. You're the marketing department, you're sales department, you're accounting, you're everything, especially beginning. It's just good to just get help.

No, absolutely. And what you don't know is what you don't know. I'm a big believer in self-education. I'm a big believer in investing to get to my goals faster.

Yes, we talked about it. I pay for speed.

Yeah, me too. Success loves speed, guys, if you I know already. All right, Claudia. So let's go ahead and talk about your clients. Let's talk about their wins. I'm a big believer in sharing transformations. Do you have a story of a specific client? You don't have to drop no names, but a specific client where you helped them and you're like, Wow, I'll never forget the situation.

Yeah. I mean, it's just really exciting. I had clients where their business, they can't have any tax debt because they take loans for their business, and that is a hit if it's in your report, so just negotiating that. Or when the IRS took away their money for payroll, they froze their account, and that was their money for their payroll or to pay a vendor and getting that cleaned up or actually, something that people get taken over Scam. And I had this couple of clients that they had a drop shipment business, but somebody told them they should have fake employees for some ERC. And then all of a sudden, they got hit with a million A million dollar a tax liability. But it wasn't really real money. It was just their tax accountant. Their accountant had made up some things there. So to be able to fix it, get all that wiped out, that was pretty cool.

Yeah. No, that is pretty cool. Guys, how many of you guys would want to a highly successful company? And then come to find out, one day you're like, You all have a million dollars in taxes, and you don't got it in liquid, right? And then Claudia comes to save the day, right? That's what Claudia does.

And because what people And what people don't know is that, yes, the IRS is scary, but they have rules. They have rules that they have to abide by. And it's not you only get this letter says, Oh, you have 30 days to pay, but there's other options, and people don't know about it. And thank you for this opportunity because that's what I love to be able to tell them, No, you have options. At least at the top of my head, 10 different things that you can do. It's just about actually opening the letter, because a lot of people don't even open the letter. So step one is open your letter.

You think it's going to go away because you haven't opened the letter? It won't. It's not going to go away. No.

It's waiting. I have a few clients that come in with a stack of an opinion because you have rights. You actually have a bill of rights. It's like there's a bill of right in the Constitution. You have a bill of rights as a taxpayer, and they have to follow the procedure. They You have a man, most people don't know about it. And that's where you can find all the information, and you can just get things done. Yeah.

And you know the rules. You know the rules. You know how to play around with the rules, and you can make it What's going to happen for people that are not educated in this?

Because they don't have to. It's my job. It's your job. You go do whatever you want to make you shine.

Yeah. And guys, I'm not trying to pitch Claudia's services, but your pricing is very reasonable for what you do. You're helping people save a ton of money. You're helping educate people. You've educated me a whole lot. You've educated my CFO, my CIO for my companies. I mean, it's just been amazing. So let me ask you this. Let's talk about roadblocks, okay? Because there's seasons in life, as we know, right? What's been the hardest lesson you've learned as not only a business owner and not just a lawyer, in combination of everything that you've been doing, helping entrepreneurs, being a mom? What is the hardest lesson you can say you learned?

Getting out of my own way. I think I am my biggest limit. Even in parenting, I think just when I get out of my own way, then I can get where I want to go.

So let's talk about that. Why do you get in your own way?

I think it's a combination of stories that you're told when you're a kid and things that not necessarily story form, but things here that just become like background noise in your conscience. We were talking about being parents. That's why it's so important. I always think twice about what I say with my kids. I don't want it when they're like adults having that tape running there. We get a lot from our parents. And then we get out from our environment. Like I said, when I went to law school, I learned that making mistakes, which is just not acceptable. You can be wrong, but that's bad as a business owner. So I think that's a lot of it's subconscious. And unless you're willing to go in, dig there, and see the nasty things that we're not willing, a lot of people prefer to be told what to do than to take ownership and do what they know they make a decision. Because when you make a decision, you're responsible, and people don't want to be responsible. It's easier not to take responsibility. It is really hard to say, I own this decision.

Well, people don't want to take ownership. Yes. It comes down to extreme ownership. It's just like, hey, whether I'm right or wrong, I'm going to make a decision.

But you're always going to be right because you're going to be making a decision based on the facts that you have at that moment. We don't have crystal balls. We don't have a time machine. So you, for the most part, are going to make a decision based on why you have that. So it was the right decision for that moment. Correct. And that's what you have to remember.

Intention.

Yes. At that moment, it was.

I love that.

And most people are not willing to do that. It's scary. But once you start doing it, it's just not scary.

Well, experience, environment. If you have parents that pushed you to be a lawyer and you had mentees that were successful lawyers and your circle, you're going to be more confident to make those type of decisions, right? It's just like when I told you, I didn't build myself as a leader or even a decision maker until I was a police, right? Because then I put the big boy pants on and I had to make decisions that had to involve people's life. I had to learn very quick. I remember the very first time I had to do a speech in front of 100 Cups. I had to do a ops plan, operations plan for a raid we were going to do. I was a very young detective, two years in. I remember holding that piece of paper in my face so people don't see my face because I was red. I was very introverted. I was shy. I was like, All right, guys, so today we're going to go raid And this guy, they call him El Chupo. And then they're like, Speak up. They were just making it worse. And they knew I was new. They knew that.

And I remember my sergeant, Sergeant Mora. Shout out to Gus. Love you, dude. He was one of my really, really, really best mentors I had in law enforcement, but he was very nurturing. He was such a nurturing supervisor. He sat me down. He's like, Dude, people are going to respect you based on perception of how you speak.

The person- Oh, I like that.

Yeah. People, when they first go ahead and they don't know you, and let's say you're doing a speech in front of anybody, you got to go in there and own it. You got to have the level of confidence. Even if you don't know the answer, see something, and guess what? You can always go back and fix it. It's about the intention of what you have in front of you. So I love that I'm talking to a lawyer because it takes me back when I go to court, right? Whenever I go to court, guys, I I was a cop for seven years, did a lot of cases, did a lot of good work, met so many great lawyers. I know, hey, based on the evidence I have in front of me, this is what I got, Judge. And the judge is like, okay, I deem that acceptable. Let's do it. I love that, Claudia. That's awesome. Let's talk about your expertise. Let's break down what you know. You've been in a tax attorney now for the past 20 years. You are what we consider an expert. What's the biggest tax mistake most small How does owners make?

Having bad records. Having barely any records.

What do you mean by records?

At the end of the day, for your tax returns, you have to where you What money came in, what money came out, and where you spend it. So you can get at your profit. It's an easy formula. So the numbers. Yeah, income. But it's just not knowing your numbers. Yes, you need to know your numbers so you have your runway and to make decisions. Because if you're going to have an audit, where Where are your receipts? It's not like coming to your... Or are you keeping records? Don't do it at the last minute or people go in with a box or things like that. It's fine that you did. But now you need to level up the big boy thing and Be serious. Take your business seriously.

Be more organized. Yes. Be more organized. Have a system, maybe similar to a CRM, customer relationship management system, guys, where you can file.

I mean, people, if you're deducting mileage, there's an app for that. Now, there's app, you can take the receipt and everything because you may have an audit, but if you have all the paperwork is right. The other thing is a lot of... You don't necessarily need to have the right structure at the beginning. I understand. At the beginning, when I start, I may not want to spend a few thousand on a lawyer, but know where you're going. At a certain point, you need to start maybe doing the LOC, maybe doing that. It's easier If you start in the right path, then you already make a lot of money, and then people have to fix it for you. It costs more money to fix it. It does. That's the start. It does. It costs more money.

But I think most people, they don't realize that in the very beginning. I'll be honest, guys. I'll be transparent with you. I didn't know what I was doing with my taxes and all that jazz. Once you start making a little bit of money, right? I've always made a range, and I'm not going to disclose that range, but I always made a range for the majority of my life. And then the last seven years, guys, I've made quite a bit more money now. And the first couple of years, I was just like, well.

But you know what was the issue, probably? Because you went from being a W2 to being a 1099. That is true. I guess that remind the other big issues. Put money aside for the IRS. Correct.

Because it's not deducted.

No. So I always tell people either you can send 15 % every time you get a... Especially when you're like a 1099, you're self-employed.

You're growing, you're making your income.

Send 15%, because technically every quarter you're supposed to send to the IRS your estimated taxes, like what they were holding. People don't do that. I understand. But if you're doing it properly, either every paycheck, send them every pay that you get paid or put a bank account and be very, very, very disciplined not to touch it. It's hard for people. So if it's hard for you, then just send it. The IRS will take your money early. They don't care.

I got to have you... I don't know if you brought business cards with you, but I probably got seven employees in this building right now where they're all between the age of 19, 25. I know for them, saving money, they don't even know that word. I think talking to you, giving the business cards and then having a close session with you, they need that. They need that because I know a lot of them, they come to me, they're like, Dude, you know how much I own taxes? I was like, Yeah, you should have saved, buddy.

Yeah, and that's why I say this is the hack. Maybe it's not the cleanest way. It's probably not what your CPA will tell you to do. But just when you get a check, just send 10, 15% to the IRS, and eventually you're building up because you won't be able to take that money out of that bank account, but you're putting it in for your taxes for next year, and that's the best way.

Well, that's something, and it's better than nothing.

Yes.

It's something, right? And it'll at least reduce your tax, what you owe, and you'll be in a better place. Okay? And you'll think, Claudia. Okay? So, Claudia, what's the difference between a tax attorney and a CPA? Okay? And when should someone hire you?

The difference between a tax attorney and CPA, and if you're thinking more of a not necessarily a tax prepare, like a tax planner, is that, yes, both of them can give you advice on tax advice. Your attorney can draft legal documents, but more importantly, your attorney has attorney-client privilege. They can't tell anything. I'm your rabbi, your priest, your pastor, your journal, your secret diary, all rolling with the one. You can tell me everything. I can say anything to it. But CPAs, if the IRS comes, they technically have to disclose stuff. The IRS can't ask me anything because an attorney.

Yeah. No, that's good. Then when should someone hire you?

There's different stages for hiring an attorney. You can hire an attorney just to set you up your company, to have your operating agreement when you're having a partner because that's like a business marriage. So you have a business plan just like you like prenup. It's like you have prenup. You have to... That's your operating agreement. That's your game plan. Correct. Then also, if you want to structure, that's when you want to go your attorney. And nowadays, there's a lot of content out there. We put content, my team and I put content out to just explain what's going on. So At least you have knowledge of what's going on. And just don't be in the dark, I guess. Yeah, that's the main thing.

No, that's good. And that's moving the needle for a lot of people. So majority of our audience, they're either entrepreneurs or nine to fivers. And nine to 5 is that want to transition into a side hustle or they want to transition into being business owners, right? So there's a lot of good information that they're going to get from this podcast.

Yeah, and especially if you have a side hustle, because you're definitely going to get hit with a problem because you're just thinking You're not thinking about your 10, your W2, you're getting your thing, and you're not thinking about putting some money away for the IRS and just planning and deductions that you can take that you don't even know about. So many. Yeah. You can rent your home to yourself. Exactly.

Exactly. Claudia, what's one situation with the IRS that can get really ugly? We already talked about this. We sprinkled it a little bit. But what's one IRS situation that could get real ugly if someone ignores it?

Yes. The worst thing that you can do with the IRS is not open those letters and ignore them because you have rights. The thing is that they have a roadmap. They're just going to escalate it until they get you to... Because their whole goal is to get you to a table to talk to you. And they can freeze your bank account. They can call your employer or your vendors and then freeze, get their money from there. They can revoke your passport, especially here in South Florida. And I actually had a client. It's huge. I had a client in Israel that they revoked his passport. He didn't even know about it, but he's trying to come back. He needs a passport for his son, but he can't even get a passport for his son until he's fixed his problem. Wow. Yeah. It can become problematic.

It can make your life hard.

Or if they freeze your payroll. I mean, freeze your bank account. That's payroll. That's paying your vendors. How are you going to explain to your employees you have the money? How are you going to pay your groceries. They can really make it very difficult if you don't come talk to them. But on the same token, never go talk to the areas without a game plan. Don't just pick up and call them because they're not your advocates. They're advocating for collecting. It's a collection agency at the end of the day. It's the biggest collection agency in the US. So they're going to tell you this is that, but they're not there to advocate for you. So you really have to go find out what are your options Painting 30 days a lump sum is one option, but it's not the only option. So find out what you can do so you can then go advocate for yourself. So have a game plan when you go talk to the IRS. No.

They always open No, absolutely. So open the letter, guys. Don't ignore those warnings that you get from the IRS because it could accumulate, it could go ahead and snowball, and then you have a bigger problem now. You're facing a lot of stress, a lot of unnecessary stress. So Claudia, In your personal opinion, in your professional opinion as well, do you think it appears better when you do hire a tax attorney to go speak on your behalf?

Yes. The reason why it's better is because then Then your tax attorney becomes the buffer. It's the buffer between you and the IRS. Because once you hire an attorney and once they file a power of attorney to speak on your behalf, the IRS, the revenue, especially if you have a revenue agent assigned to it, they can't talk to the client. They can't talk to you without your attorney. That's it. So that's it. You're not going to get any more. And plus, you're going to have somebody that... They do this every day. That's their 9: 00 to 5: 00. They know what they're doing. They know all the things. They know that maybe we do it this way or that way. It's better. Because at the end of the day, also the other person on the other side, the IRS, they're just people. They're people that are overloaded with cases. And if, for instance, I can be... I can have a cool, calm conversation with them because I care about my client, but I'm not the one. It's not your money. It's not my stress. I care about my client, but when it's your personal thing, you get more emotional When we buy our own personal home, we're emotional about it as opposed to when we go buy an investment, right?

Correct. So I think that also, you have somebody that can be less emotional about it, more logical about it, more pragmatic, and also it's your buffer. And also they have all the experience. They've seen things that, okay, maybe you can't take it out of here, but take it out of there. And if we put it, then we reduce. Because at the end of the day, the formula also for the IRS is also a easy formula. You have how much you made, your income, minus the allowable deductions, because not everything's allowable. And then the profit. If you owe money to the IRS, that profit, that net goes everything to them. But you can play with how that net becomes because it's all about what's allowable deductions. Correct. That's why you want a professional with you.

I love that. It's getting the best person to go into the game for you and execute, right? And you're going in there with clarity. You're not going in there with emotions. And you're able to make the best decisions for your customers or your clients.

The other important thing is getting somebody the right attorney. It's like you wouldn't want your dermatologist If you do your heart surgery. You go to heart surgeon. So it's the same concept because I know that, yes, a lot of people can do a lot. Anybody can do it, and maybe somebody, any other attorney or CP, but just get somebody that has that actual experience that actually does That's what they do. Right.

And then also, and this is just a question I know a lot of my guys here in the office, especially after the podcast, they're going to ask. They're going to be like, Well, Claudia is a tax attorney because she also connect me with a CPA? Can she also connect me with someone that can take care of my books and all that jazz? So do you have the connections to go ahead and basically do an all-in-one type of service thing?

Yeah, because actually, we don't do returns in our firm. So I have a lot of CPAs that I give. And that's also because that's a lot of my referral network. So I do work with a lot of CPAs, different things.

Something that I always say, guys, on the show, your network is your networth. So, yeah, that's good. So you have the all in one. So we're able to hook people up with that. Okay, so let's get into family. Big, big, big believer in family, core values, traditional values, guys. What does your family think about the life in a firm that you've built?

Like I said, I'm hoping Because I never had that growing up. I never saw a business owner, no? I think that gives you the most liberty, the most opportunity to scale. If you own your own business, then I think sky's the limit in a way. And I'm happy to see it. My son is more of always trying to figure out how he can make money, what business is going to start. He always comes up with, mommy, I have this idea, and I'm always trying to influence him and things like that. So that is It's really cool to see that.

That's pretty badass.

Because I didn't have that, and I don't have family that owns businesses. So it's a new- You're influencing him.

You're influencing him in a positive way because we talked about this before, and My mother, even up until the age, I think of 33, when I had one of my first companies, go very well. She still had doubt. She still had doubt. And she was like, Well, what if the company goes bankrupt one day?

What happens if this and That's the tape that's running from what her mother told her, her grandmother. It's just generational thinking that we have. Especially Latinos, they always like, just work hard, put your head down, and then you'll be okay. And then you'll retire, and you'll be fine. Work hard, put your head down.

Be happy with what you have. There's so many other people that have it worse. Yes, you're absolutely right. That's one- But why can you ask for more?

Exactly. And you know what I- And then I can help those people when I have more.

You know what I call that, Claudia? I call the force of average. My family, they ingrained the force of average. And not to talk bad about my family. I love my family. I take care of them. I'm a blood light breaker just like you are, too. But what I always tell is the people around you, if they're not doing better than you, if they're not in a place in life where you want to be at eventually, why would you take advice from somebody? It doesn't matter if they're your parents, it doesn't matter if they're your spouse, and nobody.

That is so true. It's so true. No, you have to be so... You have to be so guarded who's advice you take, because sometimes people will give you advice. There's just well meaning. But if you haven't walked that path, you haven't done it, you cannot tell me about that. Exactly. We of all due respect. Exactly. It's hard for us to not... Because it's well meaning. They give us advice because they love us. They care. But sometimes it's just that you... But they haven't had that experience. How can you give Let me advice on that?

You got to walk the walk and talk the talk. I don't listen to people that just talk. I want to see action.

Even people that see action, people that have been through that journey. How do you open a business? How do you do it? Because it's different being an entrepreneur than being a working bee, being an employee. There's different things that happen. When do you in the business?

Are you a big believer in It's a mentorship.

Yes. I'm learning. I still did that. I learned. I was telling you that actually less than a year ago, I got certified in being a money coach just because I wanted to learn more about the money mindset and things, what stops in my clients so I can help them better because I don't like having recurring clients that have problems with the others. Then I feel like they didn't do my job well. Right. I believe in mentorships. I still have mentors. I have coaches. I wouldn't get to where I I do that on the reverse. I love helping my team. We have meetings, and it's just not about... I hope they stay with me forever, but if they don't, how can I make you better with tools you need? I get excited when they grow professionally.

It's very rewarding. It is. It's very rewarding because at the end of the day, our why changes. I'm pretty sure the why when you were first a lawyer, when did you officially become an official tax attorney? At What age?

I'm telling you, I did it all at high school, law school, and then the outline, boom, boom, boom.

What age?

So 18. I did under a three, so six, seven. Twenty, I had to be like 24, 25.

Okay, so at 24, 25, do you still remember what your why was back then?

You know what? At that point, I just wanted to be a partner in a big firm. That was my goal.

That was the goal. That was your why. There's nothing wrong with that why. There's There's nothing wrong with that why. I always ask people because the why changes. I'm pretty sure now, you as a mom, being successful, being in the game for 20 years, your why is completely different now.

Yes. Then I became a parent. I'm like, Oh, my God, I want to stay with this little person all the time. What's your why now? My why now? I want to build something that I could help my community. I'm a proud Latina, and I am so tired seeing bad information or seeing business not grow. I was telling you before, most Latino business are micro business. They don't make more than 100K. There's no reason why. We are hardworking. So that's my why. I want to build more business, more information. Like I always say, knowledge is power. If you know the knowledge, then you can make a decision. You're not guessing here. Just make the best decision for you at that moment with the information you have. So make sure you have the best information. That's all we can do.

And do you think it's because lack of knowledge? Why business owners make less than $100,000 in business?

Yes, it's the lack of knowledge. They don't have the information available. It's not a lack of drive. It's not like a grid. I mean, it's just lack of knowledge. They don't know where they can get funding. They don't know. Even just making a mistake in taxes. You don't know, okay, you're so busy trying to make it happen. And it's a lot because you can't be an expert in marketing. You cannot be an expert in sales. You cannot be an expert in finance. That's a lot. So I mean, obviously, you're going to make a mistake and where people just dropped the ball. And it's not because they didn't mean to, but it's because it's not what is in point. It's not sexy, it's in taxes and the legal part until a fire happens there. I'm like, Oh, my God, I should take it. But those are the first things that people drop the ball because you need to make sales. So It's marketing and sales. Cash flow. Yeah. People worry about cash flow. And how you get cash? Marketing and sales.

You got to stay in business.

But you don't protect yourself. You don't make sure that you have your roof.

You're foundation. You got to sit the foundation, which comes down to Corporation, LLC, even the bank account. Certain bank account, right? Yeah. That's good. So with that being said, this is going to be the final question, but it's going to be a good one. Okay. Ready. You're talking to millions of people that are going to be listening to this podcast here in the next couple of months. So what legacy are you trying to leave behind, especially for women and Latinas in law?

The legacy, especially. I think as women, we are so strong. Yes, you are. But we're also thought to be meek sometimes, be quiet, and your biggest power is just being you. And I love that. I mean, I learned that growing up even more. I think you see it more now an issue, especially if you were not born here and you came here in the business, you even limited by the fact that you feel like you have an accent or maybe you're not fluent in the language, that's BS. If you were awesome over there, you're going to be awesome over here. You're going to crush it. Yeah. So I think that's... I think just owning our power as strong females, you're just going to shine. It's so exciting to see that.

I think with the type of mindset you have, I know you're a money coach, but you also need to be an empowerment coach. Because a lot of people, like you said, they just want to follow directions. So they have to start from start one, the first win. That's why I always talk about wins. For a lot of people, even making a decision to get a mentor is their first win. So if they get the first win, you could be their first mentor. And then you show them how to lead. You show them how to use their special technique or what they know to empower them. So just an idea.

Okay. I always like ideas.

It'll be good. Okay. This is the final question. Okay, so this is the level up. We're here to level up, okay, guys? We put our pride to the side to go ahead and level up because what you don't know is what you don't know. Take care from me, guys. I've had to pay the IRS millions of dollars myself, and I could have saved a whole lot if I would have structured it properly, okay? So don't make the same mistake that I did. It was a lesson learned, but it was an expensive lesson, okay? So before you guys launch your dream venture, your dream life, Life by Design, we're going to ask Claudia this one question. So here's your audience. It's going to be cool. If someone listening today is scared of taxes, scared of opening a business, or just feel stuck, what would you tell them?

Just do it, but make sure that you also think about protecting yourself because, yes, you have to have the long vision. Yes, we are here to open, make sure you got your first client, your first business, but you have to have the long visions of what's going to happen three months from now, three years from now. And that's why you want to look at your structure, think about it. And now there's so many services out there that can help you that you don't necessarily need to go full-blown to get an attorney. There's services that can help you do it with handholding you down the road. And now there's so much information out there in many languages, too, so that you can just have it in the back of your head. I understand sales and marketing is important, but so is the rest.

No, absolutely. You need the foundation, guys. And then Claudia, where can people find you?

My social media handle is Ask the Tax Attorney. I love that. It's crazy. So in YouTube, Twitter, we have it everywhere. Tiktok. Oh, I guess it's X now. Tiktok and Instagram.

Guys, so you guys can find Claudia at Ask the Tax Attorney on all social media platforms. And then what is the name of your law firm?

Móncarz Law firm. There you go, guys. M-o-n-c-a-r-z, Móncarz Law Firm. There you go, guys. M-o-n-c-a-r-z. Móncarz Law Firm.

And guys, if you guys have any questions, shoot her DM. She's pretty cool. She's done some cool stuff, and she can help you save a lot of money when it comes to the IRS. Okay, so set it up right. Do it once, and then you'll be set for life.

If you have problems with the IRS, also, we thought there's 14 million people last year that opened. Those are only the people that actually talk to the IRS. It is very common, it's very easy. It's the It's one thing that you can get rid of, so you can get a very nice sleep and something less to worry about because we have a lot to worry about as business owners. Absolutely. I'm sure your to-do list is never-ending. Mine is never-ending. Everybody is.

Oh, every day.

Especially if you're scaling a business.

That's it. Got to scale, right? We have to level up.

Yep.

I love it, Claudia. Guys, that is it. If you guys love this episode, drop a five-star review on Spotify and anywhere else where we're broadcasting this podcast. Guys, we are currently ranked number one in business on Apple podcast and ranked top 15 in all categories. Get us up to top five, guys. We love you guys. We wouldn't be here if it wasn't for you guys. Emilio says, What's up? And that is it, guys. I will catch you on the next one. Take care.