Category: Featured Posts

IRS Releases 2015 Collections Data

Today brings one of my absolute favorite days of the year: The release of the annual IRS Data Book for the preceding fiscal year.

As always, I jump directly to the most precious tidbit in the entire data book: Table 16. If you’re not familiar, this is the table that summarizes IRS Collections enforcement activities for the year.

This year’s table illustrates two key things that are important for you to know from a tax resolution marketing standpoint.

First, the number of open Collections cases continues to increase. FY15 saw a net increase of 961,000 open Collections cases in inventory. As of the end of the fiscal year in September, there were 13.3 million active Collections cases. That means increased tax resolution opportunities for you.

Second, the number of new tax lien filings continues to decrease, a trend we’ve seen continuously for a number of years. In FY15, the IRS filed over 30,000 *fewer* new NTFLs than in FY14. This trend has progressively made tax lien marketing more difficult, in terms of the “low hanging fruit” and decreasing response rates. This means that, while tax lien marketing is getting progressively more difficult every year, you should be getting higher quality clients from the tax lien marketing you are doing. Be more selective, as the IRS obviously is when it comes to filing the liens. Also, you really should be shifting more of your marketing budget to digital marketing.

It should also be noted that levy activity dropped by about a quarter, despite the fact that monies collected actually went up by about $1.3 billion.

Another thing that’s obvious from this year’s report is that the IRS crackdown on unfiled returns is paying off. FY15 ended with almost half a million fewer open delinquent return investigations than in ’14, and the number of new investigations was also substantially lower. I think this tells us that the IRS is relying more on computerized data matching to help close out delinquent return investigations, and those systems are working.

The Offer in Compromise program never has been and never will be your primary tax resolution tool, but practitioners are inevitably curious about it, so I’ll make a brief mention about it here. The number of offers received and accepted didn’t really change (it hardly ever does year to year). However, the amount of revenue collected by the government through the OIC program went up about 14%.… Continue reading

Making a million bucks, by the numbers

One of the tasks I’ll be embarking on after settling down in Washington state next month is the updating, revision, expansion, and editing of all of my published books. Before the end of the year, I’ll have new editions of each book done.

The first of these to get the update treatment will be my book about building a million dollar taxpayer representation firm. A lot has changed in the 18 months or so since I last revised that particular work, and I need to update it to reflect the ever changing realities of doing tax resolution marketing.

One of those realities is that the cost of client acquisition has gone up a little bit. The primary reason for this has to do with the efficacy of small, cheap postcards. For years, these regular sized postcards were the workhorse of my direct mail lead generation efforts. Today, those same postcards just don’t yield the results they used to.

In general, we’re seeing about 1/4 of the response rate from SIMPLE direct mail compared to what we used to get. By “simple” direct mail, I’m referring to basic postcards and machine addressed letters with postage permits. What’s the reason?

Direct mail is still a great way to generate clients. In fact, since fewer companies use direct mail, there is less clutter in the mailbox to compete against. However, what I think is happening (and this is purely conjecture, by the way) is that mail recipients are more discerning when it comes to sorting there mail — in other words, they are more quick to discard anything that looks like “junk mail”.

My rationale behind this assumption is that dimensional mail and heavily personalized mail are working great. Most readers know by now that I heavily advocate sending 3-letter sequences in sync with the IRS notice cycle following a lien filing, and that these letters should be hand addressed and use real stamps.

Hand addressed? Real stamps? Geesh, that sounds like WORK! And yes…yes it is.

So with that said, what’s it going to take to hit the seven figure mark now?

One of the nice things is that, while marketing costs have increased, so have average fees. In fact, average tax resolution fees nationwide are up nearly $1,000 since I last wrote about this topic here on the blog over two years ago.

Assuming an average fee of $3,500 per client, we need 286 … Continue reading

How I get inbound tax resolution leads with no marketing

In a typical week, I get at least one, and sometimes as many as three or four, people contacting me completely out of the blue that are telling me that they think I’m the best person to help them with their tax problem and wanting to hire me.

These are folks that I’ve never talked to before, never marketed to before, never had any one on one contact with at all. But they’re reaching out to me, with their checkbook open.

How is this possible?

It’s actually quite simple: I took the time to establish myself as an expert.

Never forget that people do business with other people that they know, like, and trust. This is the single most important thing you can ever learn about running a service business. Period.

Establishing yourself as an expert, as the go-to person in your area or specialization, you automatically build credibility. Providing ways for people to get to know you, even if you never actually speak to them, builds on this. Over time, people that know you will get to like you and trust you (assuming you’re likable and trustworthy, of course).

People get to know you via the content that you produce. On my tax firm web sites, I provide a ton of free or extremely low-cost information for people, including how to negotiate their own Installment Agreements and how to draft their penalty abatement applications. I also provide pointers to appropriate IRS resources and other information that can help them.

This material costs me nothing but time in order to create. After the initial creation of a few backlinks to those sites via press releases, articles, or videos I post elsewhere ,I do no further active promotion of those sites, I just let Google and Bing find them on their own and determine whether they are worth including in search results or not. I don’t try to “game” the search engines, and I update the sites far less frequently than the so-called SEO “experts” say that I should.

It also helps that a little over a year ago, I took the time to write a short book and self-publish it on Amazon. That book is now one of the best selling books on Amazon on the subject of settling tax debts. The end of every chapter includes a call to action referring back to my primary practice web site, which offers additional resources. … Continue reading