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

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Once you level up your income, please do yourself a guys a 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, the shame of it, especially business owners.

How could I get into this trouble?

I had this couple of clients that had a drop shipment for business.

Somebody told them they should have freaking employees, and then all of a sudden they got hit with a million dollars.

Hey guys, and welcome back to a Lavol 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,

they can literally bankrupt you if you don't do it correctly.

So 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.

And to give you guys a little bit of background, okay, 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 up.

Thank you.

Thank you for having me here.

No, no,

going to be a good time.

So, Claudia, as you guys know, as you know, Claudia, Level Up is about self-help.

It's about helping people that have limiting beliefs, right?

Yes.

And you know, 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.

You know, I've done a couple cool things.

I'm still your mother.

I'm still your mother, right?

So, um, 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.

So tell us a little bit about yourself and we'll take it from there.

Well, like you said, I was born in Panama.

I'm 100% Panamanian, Linda, you know, but I grew up here.

My mom came when I was around second and third grade to study in Texas.

And from there, we've been able to always be

kind of always been back and forth between Panama and the U.S.

I was telling you a little talking about our parents and the choice that we made.

Growing up, he was in my family either.

You have to pick one of the three things that you could be, a doctor, a lawyer, or an engineer.

Very traditional.

Yes.

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.

Yeah.

All eyes on you.

All right.

So,

and I end up doing law school because I guess since I was little, I was in, but

what I really love about being, you know, a lawyer is the opportunity to help, especially help my community, your community, our community, Latino community.

And

so.

And now I think more as myself is a business owner more than a lawyer that happens to own a law firm.

And I'm here.

And thank you for the opportunity to give the knowledge because I always said knowledge is power.

Yeah, that's how you get to where you want to go.

No, absolutely.

And you know, talking to you before the show, we talk about, you know, 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.

I didn't, and 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, you you know, once you level up your income, please do yourself a guy a favor and go ahead and get yourself a tax attorney.

Got Claudia right here, okay?

So, no, yes, definitely.

I mean, I think we're like 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.

Yeah.

I even have my own CPA, even though I can do a tax journey.

You always, because remember, that time that you're taking to, especially we're trained to be like DYIs, like like we can do everything, but your

time is a limited resource.

That's the one that'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, then just hand it over to somebody else.

Yes.

And then do what you do best, what you shine at.

No, absolutely.

And I 100% agree on that.

You know, I'm a visionary guy.

I'm a startup guy.

You give me the ideas.

We make it happen, right?

But other than that, I hire

everything else out.

You know, logistics, finances, taxes, right?

So, all right, Claudia.

So take us back to a time

when you didn't know what path you were going to take.

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No, actually I didn't.

You know, I always wanted, I just knew I didn't want to do criminal law.

Okay.

That's one thing.

Why is that?

I mean, you're talking to a former detective.

I mean, I'm just saying it wasn't that bad, you know?

No, no, I, or family law.

I just, too emotional.

Okay.

Okay.

I don't know.

People in family law, they're all emotional in criminal law.

I just, I felt bad.

I felt bad for all

the criminals.

Sorry to say that.

I felt bad for everybody.

Yeah.

I mean, you know, don't do the crime.

You know, won't do the time.

Yeah.

But the irony was that my first summer in law school, I clerked for a criminal judge.

And he knew that I didn't want,

that I, I didn't know what, 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 it 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?

Like how to marshal your assets.

I went back to law school.

I'm like, I'm going to be a probate lawyer.

They're 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 take.

Change your life.

I loved it.

It was the only class in law school that I actually understood it.

Like I could memorize.

So I did well because I can memorize one, two, three.

And was it because it intrigued you?

You actually really liked it?

You were passionate about it?

You know, most people think lawyers and especially tax lawyers are not creative, but it 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 the maternal side are accountants.

So

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 like 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 did my undergrad, which was English literature.

Wow.

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 like in South Beach writing points 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 like go hang out with their friends, go on the beach?

I know that was a very Miami thing to do.

No, I was a nerd.

I love books.

I love, you know, I was always a good kid.

So

I'm going to own that I was a nerd when I was a kid, for Ali.

No, I love that.

I love that.

And, you know, 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 that.

I'm following it.

It's okay.

So, yeah, so, and after I went straight to Australia, 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, you know, and that's why we work together.

So let me ask you this, okay?

Might sound a little cliche since that you told everybody now on the show, okay, that you wanted to be a lawyer since you were a kid.

Was that something that your mother, your father, your parents like ingrained in you, like out of the wound?

Like were they like, Claudia, you have to be a tax.

You have to be a lawyer.

Like

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 like an indirect message in my family.

Like 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 gonna 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 right so here I here in in the US going to law school is grad school but not it so I think that was interesting when I was finishing close to finishing law school like so what is your LLM I'm like I already went to grad school what are you talking about yeah so I guess end up getting that LLM was part of like well you need something else yeah but the interesting thing is that most of my family they are professionals they are like either doctor like I said but not a lot of them are business owners so that was an interesting change and talking about and even my dad he's he's um he's a doctor but he's tried a lot of businesses that have failed and now i notice like after we talked about taking a lot of like doing a lot of uh self um reflection yeah and just learning about like your your your mindset and in your levels I think just my dad had those levels because he grew up very poor my dad yeah and then I think he became a doctor and then he went he's always tried so many businesses that never worked you name it

I can tell you but I think that was interesting and I said it myself I said like 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.

Total environment.

Yes.

Right?

And 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.

And 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 gonna be a mommy.

I'm like, you know,

and my husband was like, oh, you can do this on your own and we'll be okay if you make not make money.

So it was not.

So you have the support of your husband.

Yes, but I think...

That's powerful.

Yes, I think that's very important, especially as a woman.

I mean, it is hard to find a man that, I mean, my husband's an attorney, so I still, he always like 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 a great.

And now with social media, you don't see that much.

You know, you got the men and 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.

The woman has to take care of it.

They can't make a decision.

You know, what happens to traditional values claudia you know and well you know it's i still think it's a 50 50 partnership but but it does is it's really nice especially i don't know as a woman that when you're always you have your business you have to take care of everything it's nice to come home yeah and have somebody take care of you maybe it's not the

the cool thing to say but it is and it's nice to have partner it's nice somebody to support you yeah

very important very important right so let's shift gears now okay

let's talk about small wins okay all right um 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, you know, 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.

right yeah so i don't i i don't reflect as much as much as i tell people to reflect on their small wins and their environment and and all that how important it is sometimes I forget myself, right?

I need to take my own advice.

But let's talk about your small wins, okay?

Because I think it's very important, right?

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 beliefs that it's going to work for them.

You know, it's interesting because

I actually

journal a lot.

Sometimes I go find my journals and things like that.

And it's interesting to see when my, when I 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 like looking at my books

yeah that that when things like that so yeah small wins or even just like getting and and like you said is we don't remember

actually something that a coach of mine a mentor told me to do was to like every night just kind of like keep a tap of everything like three wins that you have for the day yeah and whenever you're not feeling great you go back to that list because she'd be a running list and then you realize oh I did I mean it's just just because we talked about being in business is really, it's not hard starting a business.

The hard part is staying in.

And, you know, because it's ups and downs, it's not a linear thing.

Seasons.

Yeah, there's going to be a, and you're going to make mistakes.

And it's okay because you learn from them.

Mistakes are awesome.

You learn.

And, you know, that's hard for a lawyer to learn that because in law school, they teach you not to be wrong.

Wrong has big consequences.

So that was also something to unlearn.

But I think just even that's a win for me to learn how to run a business, to learn how to,

all those are, to me, are wins.

Well, I believe you humanized your profession by just saying that sentence.

You know, 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 going ahead and saying, it's okay to make a mistake.

It's okay that I don't know everything.

And that's why we click, 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 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, right?

After this podcast, you're going to tell people, obviously, where to find you.

And for everyone listening, we have a hundred thousand 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 into 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.

And they're persistent.

You know, I joke that the IRS is my marketing partner.

Yeah.

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 you know, if you read their mission statement, it is to get the, I'm paraphrasing this, the fat the most amount of money in the fastest amount of time yeah and they are persistent to you and i really and they are and i've been practicing for about 20 years and out of those 20 years only one time did i ask somebody that got in trouble because they actually made a mistake they didn't know they chose to like hide their money everybody else is a mistake yeah like this year the irs last year the irs opened

i want to say like

14 million new accounts for like 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.

Yeah.

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've made mistakes where

I made mistakes and tax mistakes that I had to get a friend of help to help me fix it.

And I do this for a living.

And my first year,

my first year, actually talking about mistakes, my first year,

I wouldn't have tax plan my own business.

So I set myself to be an S-Corp, but I couldn't give myself a salary every year, every month, because I just couldn't.

It was my first month.

And then I get a letter from the Department of Revenue from Florida.

You haven't paid unemployment.

Why you owe us all this penalties?

Like, oh my God.

I couldn't fix it.

I tried to explain to them.

I actually had a friend 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 know, you're the marketing department, your sales department, your accounting, your everything, especially the beginning.

It's just good to just get help.

No, absolutely.

Absolutely.

And what you don't know is what you don't know.

You 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 didn't 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 really exciting.

You know, I had clients where

their business

they they can't have any tax debt because they they take loans for their business and that is a hit if it's in your report so just negotiating that or when they the IRS took away their their money for payroll they froze their account and that was their money for the payroll or to pay a bender and getting that cleaned up or or actually

something that

that people get they can you know scam and I had this couple of clients that

they had a drop shipment business, but somebody told them they should have fake employees and for the some some ERC.

And then all of a sudden they got hit with a million dollar

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 build a highly successful company and then come to find out one day you're like, yo, a million dollars in taxes and you don't got it and liquid, right?

And then Claudia comes to save the day, right?

That's what Claudia does.

And because, you know, 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 that says, oh, you have 30 days to pay, but there's other options.

And people know about it.

And that's what, and thank you for this opportunity because that's what I love to be able to tell them.

No, you have options.

There's there's like at least at the top of my head 10 different things that you can do it's just about you know

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 gonna go away because you haven't opened the letter it won't it's not gonna go away no it's waiting i have a few clients that come in with a stack of an open letter because you have rights you actually have a bill of rights just like there's a bill of right in the constitution you have it like a bill of rights a taxpayer and you have they have to follow the procedure they have a manual most people don't know about it and that's where you can can find all the information and you can

you can just get things done yeah so yeah no yeah and you know the rules you know the rules you know how to play around with the rules and you can make it happen for people that are not educated in this so

because they don't have to it's my job you go do whatever you want to makes you shine yeah and and guys uh you know i'm not trying to pitch you know claudia's services but i mean your your pricing is very reasonable for what you do you know you're helping people save a ton of money you're helping educate people.

You've educated me a whole lot.

You

educated my CFO, my COO 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, you know, what is the hardest lesson you can say you learned?

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Getting out of my own way.

way.

I think I am my biggest limit.

And whenever I are, you know, in

whether it's in, 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, you know, you,

you know, stories that you're told when you're a kid.

and things that not necessarily story form but you know things here that just become like background noise in your, in, in your, uh, in your subconscious.

You know, that's 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 to when they're like adults having that tape running there.

We get a lot from our parents.

Then just

and then we get out from our environment.

Like I said, when I went to law school, I learned that making mistakes was just not acceptable.

You can be wrong, but that's bad as a business owner.

So I think that's just in,

it's a lot of it's subconscious.

And unless you're willing to like 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, 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 what 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.

You know, if you had parents that pushed you to be a lawyer and, you know, you had mentees that were successful lawyers and, you know, 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 hadn't involved people's life.

And I had to learn very quick.

You know, I remember the very first time I had to do a speech in front of 100 cups, right?

I had to do an ops plan, operations plan for a raid we were going to do.

And I was a very young detective, two years in, and I remember holding that piece of paper in my face so people don't see my face because I was red and I was very introverted and I was shy.

And I was like, all right, guys, so today we're going to go

raid this guy.

They call him El Chapo.

And then they're like, speak up.

Like, they 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.

And he sat me down.

He's like, dude, people are going to respect you based on perception of how you speak.

I like that.

Yeah.

People, when they first go ahead and they don't 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, say 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 mean, I was a cop for seven years, did a lot of cases, did a lot of good work.

Met so many great lawyers.

And I know, hey, based on the evidence I have in front of me, this is what I got, judge.

Yeah.

And the judge was like, okay, I deem that acceptable.

Let's do it.

Right.

So I love that, Claudia.

That's awesome.

So 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.

So what's the biggest tax mistake most small business owners make?

Having bad records, having barely any records, you know.

What do you mean by records?

At the end of the day, you always have for your tax returns.

You have to have, you know, where you spend, what money came in, what money came out, and where you spend it, right?

So you can get at your profit, right?

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.

But just because if you're going to have an audit, you know, like where are your receipts?

Where are you?

It's not like coming to your or do you are you keeping records?

Don't do it at the last minute, or people go in with a box or things.

It's fine that you did.

But now you need to, you know, level up, you know, the big boy thing.

And, you know, be serious.

Take your business seriously.

Be more organized.

Yes.

Be more organized.

Have a system.

Maybe

similar to like a CRM, customer relationship management system, guys, where you can file.

And there's, I mean, like people, like if you're if you're deducting mileage, there's an app for that.

And now there's an app, like you can take the receipt and everything because

you may have an audit, yeah but if you have all the paperwork is right um the other thing is the

a lot of um

um just not you don't necessarily need to have the right structure at the beginning you can i understand at the beginning when i start i may not want to spend like a few thousand on a lawyer but you know kind of know where you're going and at certain point you need to start like maybe doing the loc maybe doing that and and it's easier if you start in the right path than you're already making a lot of money and then people have to fix it for you It costs more money to fix it.

It does.

At the start, it does.

It costs more money.

But I think most people, they don't realize that in the very beginning.

Like me, 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 started 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 a majority of my life.

And then, you know, 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 w-2 to being a 1099 that is that's the other i guess that reminds the other big issues put money aside for the irs correct because you're not deducted no yeah so i always tell people like either you can send 15

every time you get a come especially when you're like at 1099 you're self-employed and you're growing and you're making your income yeah send 15

because technically every quarter you're supposed to send to the irs you know

your your estimated taxes kind of like what they were holding.

People don't do that.

I understand.

But if you're doing it properly, so either every paycheck, send them every pay that you get paid, or put a bank account and be very, very, very,

if it's hard for you, then just send it.

The IRS will take your money early.

They don't care.

I gotta have you.

I don't know if you brought business cards with you, but I mean, I probably got like seven employees in this building right now where they're all between the age of 19 and 25.

And I know for them, saving money,

they don't even know that word, right?

So I think talking to you, giving the business cards and having a closest issue 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 owe in taxes?

I was like, yeah, you should have saved, buddy.

Yeah.

And that's why I say this is the hack.

And 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 billing up because

you won't be able to take that money out of 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.

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?

Well, I mean, the difference between a tax attorney and CPA, and if you're thinking more of a not necessary tax preparer 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't say anything to it.

CPAs, if the IRS comes, they technically have to disclose stuff.

The IRS can't ask me anything because attorney.

Yeah.

No,

that's good.

And then when should someone hire you?

If you're okay, if you're, there's different stages for hiring an attorney, right?

You can hire an attorney just to set you up your company, to like

to have your operating, 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, just like you have prenup, you kind of have to, that's your operating agreement, that's your game plan.

Correct.

Right.

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.

Like we put content, I put 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.

That's good.

And that's moving the needle for a lot of people.

So majority of our audience, they're either entrepreneurs or 925ers.

Yeah.

And 925ers that want to transition into

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.

And 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 about your 10-9, you know, your W-2, 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.

Yeah.

You can rent your home to yourself.

Exactly.

Exactly.

So, Claudia,

what's one situation

with the IRS that can get really ugly?

And 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.

So the worst thing that you can do with the IRS is not open those letters and ignore them because you have rights.

And 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 the 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.

Huge.

I had a client in Israel that they revoke his passport.

He didn't even know about it, but he's trying to come back.

And

he needs a passport for his son, but he can't even get a pass for his son until he's fixed his problem.

Wow.

Yeah.

So, I mean, it can become definitely problematic.

Yeah.

It can make your life hard.

Yeah.

And and or if they freeze your payroll, I mean, freeze your bank account.

That's payroll.

That's paying your vendors.

Are you going to explain to your employees you have the money?

How are you going to pay your groceries?

I mean,

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 IRS without a game plan.

Don't just pick up and call them because

They're not your advocates.

They're advocating for collecting most it's a collection agency at the end of the day It's It's the biggest collection agency in the U.S.

So they're going to tell you this, this that, but they're not there to advocate for you.

So you really have to go find out what are your options.

What, you know, paying in 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.

Don't

So have a game plan when you go talk to the IRS.

Don't always open that letter.

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.

Yeah.

A lot of unnecessary stress.

So Claudia, in your personal opinion, okay, 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 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 that POA 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

knows that they do this every day.

That's their nine to five.

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.

It's just 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 I if for instance I can be you know I can have a cool calm conversation with them because it's not it is I care about my client but it's not I'm not the one

it's not my stress I care about my client but it's it's not it's when it's your personal thing you get more emotional like when we buy our own personal home we're emotional about it as opposed to when we go buy an investment

So I think that also gets you have somebody that's more, 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 the easy formula.

You have how much you made, your income, minus the allowable deductions, because not everything is allowable.

and then the profit if you owe money to the irs that profit that net goes everything to them yeah but you can play with how that net becomes because it's all about what's allowable deductions correct so that's that's why you want a professional with you i love that i love that it's um 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 for your clients and um

the other important thing is getting somebody the right attorney.

You know, it's like you wouldn't want your dermatologist to do your heart surgery, right?

You go to heart surgery.

So it's the same concept because I know that, yes,

a lot of people can do a lot of, you know, anybody can do it and maybe somebody and any other attorney or CP, but just get somebody that has that actual experience that actually does what they do.

Right.

Yeah.

Yeah.

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, but can 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 like the connections to go ahead and basically do like 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.

Yeah.

things you know you you know like like something that I always say guys on the show your network is your net worth so yeah that's good so you have the 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 infirm that you've built

You know, like I said, I'm hoping because I never had that growing up.

I never

saw

a business owner, owner, no?

And I think that gives you the most liberty, the most opportunity to scale.

Like 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 like 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, you know, I'm always trying to influence him and things like that.

So that, that is kind of cool to see that.

That's pretty badass.

Yeah, yeah.

That I, because I didn't have that, and i don't have family that owns businesses so it's a new you're influencing them yeah you're influencing them in a positive way because you know we talked about this before and my mother even up until the age i think of like 33 when i had one of my first companies go very well um 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 because of what does it take us running from what her mother told her her her grandmother her it's just generational thinking that we have, you know, and especially Latinos, they always like, you know, just work hard, put your head down, and then you'll be okay.

And then you'll retire and you'll be fine.

Just work hard, put your head down.

Be happy with what you have.

You know, there's so many other people that have it worse.

Yes, you're no absolutely right.

You know, that's one purpose.

But why can't you ask for more?

Exactly.

And you know what I and then I can help those people that have more when I have more.

You know, you know what I call that, Claudia?

I call that the force of average.

You know, my family

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 blunt life 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 parents, doesn't matter if they're your spouse,

nobody.

Oh,

that is so true.

It's so true.

No, you have to be so

guarded.

You have to be so guarded whose advice you take.

Because sometimes people will give you advice they're just well-meaning yeah but if you haven't walked that path you haven't done it you cannot tell me about that exactly with all the respect exactly and i and it's hard for us yes to like not and it's and because it's well-meaning they give us advice because they love us they care but but sometimes it's just that you

but they haven't had that experience how can you give me advice on that you gotta you gotta walk the walk yeah and talk the talk you know i just I don't I don't listen to people that just talk I want to see action, you know and in even people I see action people that have been through that journey, you know like oh How do you open a business?

How do you do it?

I mean like you know how to because it's different being an entrepreneur than being a

Working B being employee.

There's different things that happen once you own the business.

Are you

a big believer in mentorship?

Yes, I, you know, and learning.

I still the day I learned, I was telling you that that I actually, like 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 artist.

Then I feel I didn't do my job well.

Right.

So I believe in mentorships.

I still have mentors.

I, you know, I have coaches.

I mean, I wouldn't get to where I am.

And I do that on the reverse.

I love helping.

You know, my team, you know, we have meetings and it's just not about, you know, 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.

So, so yeah.

It's very rewarding.

It's very rewarding because at the end of the day, our why changes, right?

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 L1.

Boom, boom, boom.

Yes, what age?

So 18.

I did under a 3, so 6, and so 20, I had to be like 25, 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 get a big, you know, be a partner in a big firm.

That was my goal.

That was the goal.

That was the why.

Yeah, there's nothing wrong with that why.

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.

And then I became a parent.

I'm like, oh my God, I want to stay with this little person all the time.

Yeah.

You know?

So what's your why now?

You know, my why now,

I want to build something that I could help.

my community.

You know, I'm a proud Latina and I just, I am so tired of seeing

bad information or seeing business snap grow.

You know, I was telling you before, most Latino businesses are micro-business.

They don't make more than 100K.

Wow.

And there's no reason why.

Yeah.

We are hardworking means, so that's my why.

I want to build more business, more information.

Just, and like I always say, knowledge is power.

If you know the knowledge, then you can make a decision.

It's not, you're not guessing here.

Just make it, you know, 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 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.

They don't, or even just making a mistake in taxes.

You don't know, like, 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 gonna make a mistake and where people just drop the ball and it's not because they didn't mean to but it's because it's it's not what is important it's not sexy is in taxes and the legal part until a fire happens there I'm like oh my god I should have taken but those are the first things that people drop the ball yeah 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.

Yeah.

You know?

But you don't protect yourself.

You don't make sure that you have like your roof.

Your foundation.

You got to set the foundation, which comes down to, you know, corporation, LLC, even the bank account.

Yeah.

Certain bank account, right?

Yeah.

You know, and it'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.

Because

you're talking to millions of people that are going to be listening to this podcast here in the next couple months so what legacy are you trying to leave behind especially for women and latinas in law

uh

the legacy especially and and you know i think as women we are so strong yes and i think but we're also taught to be meek sometimes be quiet and

your biggest power is just being you.

And I would love that.

I mean, I learned that growing growing up even more i think you see it more now and it's just especially and especially um if you were not born here and you kind of came here and did business you're even limited by the fact that you feel like you have an accent or you maybe you're not fluent in the language that's bs if you were awesome over there you're gonna be awesome over here you're gonna crush it yeah so i think that's i think just owning our power as strong females um you're just gonna shine and it's so exciting to see that i think with the the type of mindset you have

you and 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 yeah so they have to stop start from start one you know 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 one 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, right?

So just an idea.

Okay.

I always like ideas.

He'll be good.

Okay.

So

this is the final, 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 it 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 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.

Okay.

Okay.

It's going to be cool.

If someone listening today is scared of taxes, scared of opening a business, or just feels stuck, what would you tell them?

Just do it, but make sure that you also think about

protecting yourself because yes You have 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 what's going to happen three months from now three years from now and that's why you want us 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 you know kind of help you kind of do it with hand-holding you down the road and then and now there's so much information out there that uh

in in many languages too so that you can just just have it in the back of your head i understand sales and marketing is important but so is the rest oh absolutely you need the foundation guys and then claudia where can people find you

at my social media handle is ask the tax attorney that's pretty easy so in youtube twitter we have it everywhere tick tock you know oh i guess it's x now uh tick 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?

Monker's Law Firm.

There you go, guys.

M-O-N-C-A-R-Z Monker's Law Firm.

And guys, if you guys have any questions, shoot our 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.

And if you have problems with the IRS also,

like we talk, there's 14 million people here that open.

Those are only the people that actually talk to the IRS.

So it is very common.

It's very easy.

And

it is the one thing that you can get rid of so you can get a very nice sleep.

Something less to worry about.

Because we have a lot to worry about as business owners.

There's a lot of,

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.

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And that is it, guys.

I will catch you on the next one.

Take care.