Are back taxes, IRS notices, or messy filings standing between you and your financial future?
In this week’s episode, Corwyn sits down with tax resolution expert Fabian Cruz to uncover how everyday people — investors and non-investors alike — can protect their income, avoid liens, eliminate tax debt, and take their life back through smart tax strategies.
Fabian Cruz is the founder of CITO Tax Resolution, a firm dedicated to helping individuals and business owners resolve IRS and state tax issues. Inspired by helping his own parents overcome a devastating tax problem, Fabian has built a mission around one message: “You deserve your life back.
Tax talk doesn’t have to be intimidating — and Fabian proves it. He breaks down the real risks of unfiled taxes, explains how poor entity setup can trigger massive problems for real estate investors, and shares a powerful story of a client who owed $300,000 yet paid nothing after his team stepped in.
Whether you flip properties, hold rentals, run a business, or just want peace of mind for your family, this episode gives you the tools to structure smarter, plan ahead, and protect the legacy you’re building.
Key Takeaways:
- 04:20 — Why so many people get into tax trouble
From life events to poor guidance, Fabian explains the most common reasons people fall behind — and why it doesn’t mean you’re a bad taxpayer. - 05:00 — “I just want my life back” — the mission behind helping taxpayers
The emotional toll of tax stress and why Fabian’s team focuses on restoring confidence and peace. - 07:15 — How the IRS works: penalties, interest, liens & the real dangers
A breakdown of failure-to-file vs. failure-to-pay penalties, how fast debt grows, and when the IRS files liens that block refinancing or loans. - 10:40 — The farmer who owed $300,000… and ended up paying $0
A real example of how “Currently Not Collectible” status works — and who qualifies. - 15:00 — The importance of filing something — even if you can’t pay
Why filing on time can save you thousands, and the worst mistake taxpayers make. - 26:40 — When to fight an IRS notice vs. when to negotiate
Understanding your options: installment agreements, penalty abatement, offers in compromise, and hardship status. - 31:00 — CORWYN’S LEGACY MOMENT
Building your legacy means protecting what you’ve worked for. Resolving tax issues isn’t just fixing a problem — it’s securing your family’s future and keeping your wealth intact.
Legacy Moment: Fabian reminds listeners that legacy isn’t just about the assets you pass down — it’s about creating systems that protect your family long after you’re gone.
Connect with Fabian:
- Website: https://citotax.com/
- Instagram: https://www.instagram.com/fabianpcruz/?hl=en
Connect with Corwyn:
- Contact Number: 843-619-3005
- Linkedin: https://www.linkedin.com/in/cmelette/
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CORWYN:
We always talk on this show about strategies for long-term growth, for making money and all that stuff and creating and building wealth for our families for generations yet to come. That’s what this show is about. So we always talk about making money. What we don’t talk a lot about is tax strategies. And we do at times deal with, we do it sometimes bring in a little tip base, = but today is one of those shows where we have an expert, a guru. Now look here, he had to break that thing down to me. He had to tell me what C don’t mean. And he told me that means Swift. So, what I felt was the wind blow past me while he was swift to provide tax relief to people that need it. So if you make money, you got to pay some taxes. That’s what it is, right?
CORWYN:
Good morning. Good morning.
Great morning, guys. Welcome to another fabulous episode of Exit Strategies Radio Show. Hey, I am your host, Corwyn J. Melette, broker and owner of EXIT Realty Lowcountry Group in beautiful state of North Charleston, South Carolina. Hey, if this is your first time listening to this show, you sir, or ma’am are in for a treat. Coz, our mission here is very simple, it’s very simple guys, that is to empower our community through financial literacy and real estate education. Guys, we are legacy building. That’s what we do.
Guys want to give a shout out. So let’s shout out faithfully to Charleston Market, PD markets. Look, you guys rock from Hollywood.What you know, no good all the way through monkey’s corner. Y’all know my mama live out there. Y’all pastor Evans, Vanderbilt Senior, his beautiful wife, Elder Evans.Thank you all guys for tuning in also to the Q family and many others, countless others who tune in and listen to us guys. Thank you. When you bump into me and say, Hey, I heard you, you reach out. I really appreciate you. You guys are rocked and amazing. My folks in muddy Mullins, Marin County guys. Thank y’all so much for tuning in guys. And trustfully y’all continue to take these tidbits and this knowledge and take it to the next level. So today we have a show for you.
We always talk on this show about strategies for long-term growth, for making money and all that stuff. And creating, building wealth for our families for generations yet to come. That’s what this show is about. We’re trying to take people, you always remind people that the purpose of. exit strategies is that movement. Our word teaches and tells us about the exodus, moving people from one place to another. That’s early book in the Bible. Those who know where it is.
Second book, but it’s early short version is guys, we want people to move in a concerted manner. A better future. That’s what we want. So we always talk about making money. What we don’t talk a lot about is tax strategies. And we do at times deal with, we do it sometimes, bring in little tidbits.
But today is one of those shows where we have a expert, a guru, all right? So if you make money, you gotta pay some taxes. That’s what it is, right? So we have none other than Fabian Cruz. Now Fabian is the founder of Tax Relief. Now look here, he had to break that thing down to me. He had to tell me what, and he told me that means swift. So what I felt was the wind blow past me while he was swift to provide tax relief to people that needed. So I want you to give a warm welcome. I want you to put. spoon down. Let them percolate just a little bit more. Get a little bit thicker, add a little bit of cream to ’em. Let’s make some nighttime grits this morning, and I want you to give Fabian a warm welcome Fabian. How you doing today?
FABIAN:
Hey, I am doing great Corwyn, and really appreciate the opportunity. I’ve been watching your show all your guests and they bring a wealth of information. So I’m gonna do my best today and try to make a very boring subject, not boring, which is facts and IRS.
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CORWYN:
Well look here. I appreciate you doing so, and I know we’re gonna have a good time. ’cause what you’re gonna tell us today is how we can manage it better. That’s what you’re gonna tell us. So, Fabian, tell us how level, who you are, what you do, and let’s get into a conversation.
FABIAN:
Okay, well first and foremost, I’m a father, married my high school sweetheart, and have two little goofballs, seven and five years old. So before anything else I’m a father. And a number of years ago I started CDO Tax Resolution. We are a tax resolution firm and what we do is we help individuals. Who somehow have gotten in trouble with the IRS or their state tax authorities or state tax authority and we helped them get that mess cleared up so that way they can get their lives back and they can get back to business, get back to what they need to do in order to make money.
CORWYN:
So, what was the catalyst for you on this? What caused you to say, Hey, this is an arena realm that I wanna work in, or where I believe I can be of assistance to others?
FABIAN:
Well, sure. So I didn’t start out as an entrepreneur. I’d been praying about it for years, trying to come up with all kinds of ideas and this one’s kind of hit me close to home. I remember I got a call from my mom. And she was just really upset, and she went about telling me they just were notified by the IRS that she and my father had this very large tax debt and there was absolutely no way they were gonna be able to pay for this, they’re on a fixed income.
As we started to really dive in, we realized there. Tax preparer, they weren’t even an advisor. Gave them really bad advice and ended up having this huge tax bill. And so I started to work with my folks. We went out and we found a tax resolution company in order to help them out. And what I found Corwyn was it was just this painful working with that tax resolution company than it was working with IRS.
And here’s what I mean by that. Every time we would call in, we spoke to someone new. They had no call continuum, so they were telling us, Hey, all right we gotta research and get back to you. And then if we were lucky, we’d hear back in a day or two. Fortunately everything got worked out, my folks, we got it cleared up.
And as I was sitting there and, I’d been praying for, well over a decade that I wanted to do something, that I owned it dawned on me I could do this better. With all my experience, like gaining corporate America, I could take all those skills and I can start a tax resolution company and have my clients have a better experience.
And so that’s actually the genesis of our company. And real quick, I always like to point out, my mother would always say, I just feel like life is on the hold. I just want my life back. And that’s actually inspired our tagline is, you deserve your life back. And so that’s the genesis of the company.
CORWYN:
That is Wow, man. That’s awesome. And I can imagine how good it felt to be able to help mom, and help your parents in dealing with this and you deserve your life back. I like that tagline. So, some people, understand some people don’t, the impact of these types of situations.
So you know, real estate investing, people are buying and selling properties. Oftentimes they’re, seeking to make money. And depending upon how they structure a transaction. ’cause we talk about finding all types of things on this show, 1031 where you can defer taxes. But, someone operates outside of a 1031, every time they sell a property have income that’s, untaxed income.
So they’re gonna have to report that. And if you let it accumulate, then it could, interfere with other things, kind of what you’re talking about. So What are the potential risk perils, if you will, of, let’s say that you operate outside of a 1031 that you’re making money, flipping properties or what have you, accumulating properties, rentals, or whatever and that income hadn’t been fully reported or taxes hadn’t been filed on it. What is the potential risk there?
FABIAN:
The first thing is that, if you don’t file your taxes, you’re gonna have a penalty of failure to file. And I took some notes ’cause I just wanna make sure I get all, ’cause there’s so much information and the IRS publication so that fee alone for failure to failure is 5% per month, up to 25% of what’s owed.
So I always tell everybody, if you file because if you can’t, at least, if you can’t pay that penalty is only 0.5% up to 25%. So literally it’s 10 times less. So that’s actually the first thing I always tell people, and that’s our first strategy is if somebody has unfiled tax returns, we get in there and we get those filed.
So that way we can stop a lot of the collections process. And then as far as long-term implications, I mean, you could easily end up in a situation where you have a lien and that’s where the IRS, that they’re gonna secure their interest in your property. And so they’re telling all the other creditors we’re first in line. And that’s gonna open up a world of trouble. First thing is it’s gonna impact your ability to borrow. Second thing is if you’re able to borrow, you are gonna pay a lot more. And I’m not a real estate guy, but I know part of the real estate plan is you borrow that money as cheap as possible. And if you’re paying above, what the current rate is, that’s gonna mess up your formula for profit.
And then I know I’ve been listening to BiggerPockets, another podcast, and they always talk about the BURR method, and I had to write this down, and that’s buy, rehab, rent, refinance, and repeat. Well, here’s the thing. If you have a lien, you’re not gonna be able to refinance, period. And so that revenue source for you, if you wanna say it that way, it’s completely dried up. So you no longer have opportunity. And also too, something else that’s really big. I’m getting calls about this all the time, is people who are syndicating looking to raise money.
And I have some clients, that have come to me and they’re like, Hey, is this a good deal? I’m like, well, I’m not attached to resolution or I’m, excuse me, I’m not a real estate guy, but let give you my 2 cents. Do the numbers make sense? Yes. Okay. Who’s this that’s asking you for money? Have you asked them for three years as far as tax returns? Have you checked their credit? Yeah. Have you done a background check on them? And almost everyone I talked to always says no. And I’m like, well, okay. This guy just asked you for a chunk of money.
You’re only looking at one side of the coin. it’s gonna impact also too, for the sophisticated investors it’s gonna impact your credibility. It’s like, you can go on and on as far as how this would negatively impact you. And then also too, it becomes public notice. So your business is out there for everyone to see.
CORWYN:
So Fabian, you kind of touched on a few things that kind of gets over into those strategies that you can employ to mitigate or otherwise limit your risk, right? Because again, and for our listeners guys, this is a conversation whether you are, an investor, this is a everyday folks conversation as well. So, please don’t tune out because, it may seem that it applies one place and doesn’t apply another but Fabian, where and what can people employ as strategies? So let’s kind of continue on that vein to try to mitigate a potential risk.
FABIAN:
So whenever people come across my desk. And they have issues with taxes and they’re business owners. And if you own real estate, you’re a business owner. That’s just how it is. Nine outta 10 times the issue I see is the improper setup of legal entities. That’s the first thing I see. Someone they buy a home and they may set up an LLC which is great. They don’t separate their finances.
So that’s the first thing you know if you have a business, it needs to have its own business checking account. Because the corporate veil could be pierced very easily. But also with that if you have multiple properties set up a holding company, put all , and then all your properties set them up into a single member LLCs that roll up into that holding company. And what that’s gonna allow you to do is it’s gonna make things a whole lot easier for you. Corwyn, I can’t tell you how many times. People say, well, I have this LLC I did online. I’m like, okay, cool. Let’s dig into it. Well, you don’t even have the property listed on here or if you do, you’re writing checks outta your personal checking account back and forth with it.
Like, that’s you’re not treating it as a business, you’re treating it as a hobby. So, people, we gotta clean up your situation. One of the first things that we implement is let’s clean up that, well, let’s get your tax debt addressed and then let’s clean up the situation so that way moving forward you don’t have this red flag hanging over your head for the IRS, to zero in on.
CORWYN:
So, let’s kind of go on the other side of the coin. Okay. Okay. So let’s make an assumption that, we did not mitigate well, right. What does this look like? And if you could share some stories, insights, or otherwise experiences that you and your team have had as you’ve worked with people to try to help them, get their life back.
FABIAN:
I want to use an example of a recent farmer we helped because. You did everything, right?
And unfortunately lemme go and lay the groundwork. People who are dealing with back taxes, they’re not these criminals in the alley. They’re not these shady people. They’re everyday Americans, taxpayers, something happened outta their control and they just ended up where they could not pay this debt. I’m gonna use this example of this farmer we had came to us owing $300,000. What had happened in his situation? He sold part of his farm in order to help pay for his wife’s cancer treatment. Unfortunately, she passed away. And as an insult to injury, he was hit with that $300,000 capital gains tax.
Now here’s the thing, he owns three businesses. He’s got this farm, he has a trucking company with 18 wheelers, and then he owns a harvesting company entwined. Yes, sir. Exactly. And he was sitting on a huge chunk of cash in the bank. And so, so what we had to do is we had to tell the IRS, well, hey, Oh. And then not to mention that money in the bank was in his personal checking account. So what we had to do is we had to explain the IRS, listen, look, this is money that’s directly going to the operations of his three businesses. And not to mention some of that money is SBA money. So what we were able to do is we were able to go in there and put him in what’s called a cannot collect situation.
So the IRS said, they’re like, okay, we’re not gonna try to collect from him whatsoever. Even though he had the money to pay this off, we’re able to show it was already allocated to his businesses. And so here’s the cool thing. And so we were able to get him in that situation. But what he did really well was, he filed his taxes every year. So that immediately starts the clock as far as how long the IRS can collect. Mm-hmm. So a third of that is gonna be gone next year, and the second third of that’s gonna be gone the year after. And then in 2027, that last third is gonna be wiped off ’cause it’s reached the statute of limitations as far as what the IRS can collect on.
So he was able to get past that $300,000, with nothing. Without having to pay the IRS anything. And you wanna talk, $300,000 is a lot of money. Yeah. And here’s the cool thing. So what we did was we were like, all right, we got you cleaned up. Now we’re gonna help you stay out of the cross IRS of the virus. We’re gonna get your LLC set up on each of those companies. And he doesn’t have any employees, they’re all independent contractors. For the season, we’re suddenly him up in S-corp. He’s gonna take a modest salary and then he’s gonna take a K one and just that alone is reducing his tax liability every year.
And then, not to mention, we put all of this into a revocable living trust. So he is older, so when he passes away, it’s gonna bypass probate and it’s gonna go directly to his children without having to. Put it all in the courts and everything. So that’s I hope that was answering your question.
CORWYN:
Yeah. actually teed us up very, very well for the next question, which is Okay, as business owners and again, for a reminder, if you own rental property, you’re a business owner, okay? Absolutely. So, you said something in, that kind of tees up the next section of what I want to kind of talk about, which is that future planning.
So you said that you guys structure not a revocable living trust that allows him to pass this business onto his family without probate and the liabilities that come with that. Did I hear that correct?
FABIAN:
That’s correct. So what happens is his businesses and all his assets are no longer in his name.
They’re in the name of the trust. And so in that revocable living trust, he’s got his children named as beneficiaries also on the trust. So when he passes away they own the trust too. So , there’s no fighting in the court saying, Hey, this is what dad wanted, or anything like that.
And you can still have a will that explains exactly how you want things laid out. ‘Cause that’s a piece of paper saying exactly that this is what I want done. The revocable living trust, that’s the vehicle to get it done.
CORWYN:
I like that. So, yeah. What’s interesting and it’s been a little while, Fabian, but I’ve actually spoke and, did a workshop, if you will , in that particular arena about the living trust and how you can use that. ‘Cause oftentimes we get hung up on just the will and we ain’t gonna get into that ’cause this show isn’t about probate, it’s about the tax strategies you can employ in order to set your family up for. Better, greater, or, and obviously, less hassle. So again, this is that arena that you guys specialize in.
So our listeners, if you will, you just spoke of, you know how you brought someone back from the brink. But let’s say someone comes to you in the very beginning. Before there’s any issues any troubles how do you advise them and if you have a scenario like that, how did you advise them so you are able to help them alleviate potential problems in, future?
FABIAN:
So, my company we just focus on tax resolution. When I have a client who comes across. Like this farmer, for example, where it makes sense to take the service one step further, we do that. And just to let you know, for here, in about a year, we’re launching a sister company that focuses on tax mitigation, asset protection, and generational wealth.
Through utilizing the entities that are out there all the different legal structures, S Corps, solo 4 0 1 Ks, self-directed IRAs. But here’s what I tell people because I’ve done it myself. As far as, because I understand you’re asking like the estate plan aspect. Yes.
Okay. The first thing you wanna do is you want to get everything that you can out of your name. Because I’m not shared this with a lot with real estate agents, you’re one fender bender away from losing everything if you don’t have an estate set up correctly. So what we wanna do is like for our home or our rental properties, we want them in a revocable living trust now, or irrevocable. ‘Cause we still wanna maintain control of that trust. So that’s the first thing we do. And then if you look at your earned income versus like your passive income, if you think about it like, just two sides of the coin, all your businesses, you want to put those into an LLC.
I’m gonna use an example of a real estate agent because I’m actually writing a book for real estate agents. So what we wanna do is we, yeah, we wanna start an LLC and typically it’s a single member, LLC because most of these,they don’t have a team under them yet, or they’re not employing chief I should say.
So you wanna be an LLC, ’cause you want that limited liability that’s what an LLC is. It’s not tax savings it’s protection. And then from there, we want to go into an S Corp. Now the S Corp is what’s really important. Especially when you’re starting to make 50,000 or more a year, because that’s where the tax savings come in. And then from there, you’re able to really deploy like a self, like a solo 401 self-directed IRA. What’s great about this is I like to call this the country club effect, because back in the day. The reason you wanted to be in the country club is that you had the attorneys, had the doctors, had the physicians. All these people who knew the game, knew the rules of the game that the rest of us didn’t know. And so, you want it set up this way. And then also like a, you want a health savings account because you can put I think, like 7,000 a year into that. Because that’s one of the number one reasons for bankruptcy is Healthcare cost.
So that’s always my advice is, let’s set up a revocable living trust. That’s your filing cabinet, where you can put everything into, put your businesses into an LLC. Let’s have all those businesses run into an S Corp so that S Corp collects all the money. And then that S Corp writes you a check. But here’s what’s cool. So with that S Corp, you can start putting money into a solo 401k. And you can also match it as an employer. So instead of putting in I think like it’s like 23,000 this year, 24,000, you can put up almost $70,000 a year as an individual. And Corwyn, there’s some real estate agents out there who, they’re making a lot of money, they’re looking for ways to invest their money.
And this is a really cool way because once you put that money in that solo 401k, you can do what’s called a backdoor Roth and you can move it from a traditional IRA into a Roth IRA. Which is that’s like the gold and sweet spot. And here’s the cool thing about that you could invest in what you know best. You don’t have to invest in Wall Street. So like, if you know real estate and you got a buddy who’s doing some real estate development, you can write a check to that person and get a higher return than what you can in Wall Street.
And so there’s so many cool things , that can be done. That, at least for me, being Hispanic, my family never had any access to. And so, that’s my personal mission is to change the narrative, for our community. When I say our community, I just mean all people,
CORWYN:
So, Fabian, we’re quickly getting to to wrap up today’s show, but how can people get in contact with you guy? How can people reach you? Where can they find you?
FABIAN:
Sure. So you can call me at 1 8 7 7 CITO tax. That’s CITO. You can go to my website, which is cito, citotax.com. And you can also do the same on Facebook.
CORWYN:
All right? All right. so beautiful website by the way, guys. Look at you. This thing out, man. So, always ask if you’ve learned a lot, and always, this is a question I ask, most of my guests, right? What I realize and know is that if things didn’t happen as they did, you wouldn’t be where you are. But I’ll always ask or usually ask, if you knew what you’ve learned back then, what would you have done differently? So if I could ask that question of you, what would that answer be?
FABIAN:
Oh man. back then, when I would’ve done, I’d have bought four Plexus. I’d have bought one. You know, I’d lived in one, rented out the others, and after a year, you can go to another one. You can do that again. That’s what I would’ve done. Hands down. Yeah.
CORWYN:
I love it. So what I heard you say is immediately, I’d have been more involved and engaged in the real estate world.
FABIAN:
Absolute. Absolutely. Absolutely, bought a whole lot more property. Especially whether as cheap of money was back then.
CORWYN:
Exactly. Exactly. Well, Fabian, I wanna thank you my guy for being on today, for spending some time with us and taking time outta your busy schedule. Thank you for the work that you’re doing in the community, the impact. I wanna encourage you to continue along that vein.
FABIAN:
Yeah. well thank you for having me on and if you need anything, you just reach out.
CORWYN:
Will do. So for our listeners, guys, look, y’all got some good useful information. If you got questions, know somebody, whatever it is, I want you to reach out to Fabian and his team. Let’s get you connected to the resource so that you’re not left. Laying on the wayside, guys, let’s not do that.
We have amazing connections and awesome people who are committed to not only just serving, but to serve you well. So please make sure you all engage for our listeners one more time. Y’all know how I feel, you know what I say. Always put the two of those things together and I give it to you this way, which is to tell you that I love you.
I love you, and we’ll see you guys out there in —those streets.
