Category: Build A Lifestyle Practice

Do I need to be a CPA, Enrolled Agent, or attorney in order to do tax resolution work?

This is a very common question that I get from unenrolled preparers, particularly those from states like Oregon , California, Maryland, and New York that have their own state-level tax preparer licensing in place.

Short answer: Unequivocally YES, you need to be an EA, CPA, or attorney in order to represent taxpayers in IRS Collections.

In order to sign a Form 2848 and represent somebody in front of IRS Collections and/or Appeals, an individual must be an EA, CPA, or attorney. Under current IRS regulations, this is non-negotiable. The IRS does not recognize any of the state-level preparer licensing programs for representation purposes.

Connecting with an EA, CPA, or attorney is a great way to be engaged in this work, but the unenrolled preparerer is limited to the tax prep and bookkeeping in support of the case. We have plenty of preparers that attend our classes in order to better understand the process that they’re supporting when working with an EA/CPA/JD on IRS Collections representation cases. In fact, many CPAs and attorneys send their admin staff to our classes in order to learn how to work cases.

But never forget that the tax prep and bookkeeping is the lower dollar value work, compared to the actual representation component. It’s the most labor intensive component of tax debt resolution, but it’s the lowest value work for the client case.

I personally encourage all unenrolled preparers to simply go take the Special Enrollment Exam (SEE) to become an Enrolled Agent. Most preparers can pass Parts 1 and 3 with limited or even zero study, and Part 2 is passable by most folks with a few weeks of intense study. Becoming an EA literally doubles your earning potential overnight, plus it’s also a hedge against the inevitable passage of a bill by Congress to give IRS authority to regulate preparers. Become an EA now, and you’ll bypass any impact of future legislation in this arena.… Continue reading

“Tax Day” is finally here!

If you specialize in something other than tax return preparation, then today is just another day for you.

But if a significant portion of your annual income is derived from return preparation, then today is obviously a momentous day.

You’ve endured the long days and even longer weekends. The cranky clients, the slow-payers, the procrastinators.

Today is when everything gets tidied and up with a pretty little bow on top and sent off to our Uncle Sam, for tomorrow we party!

Or, at least that’s the fantasy world that the general public believes we live in.

You and I know that’s not really the case.

You have a pile of extensions. You have bookkeeping to catch up on. And every month we have FTD deadlines and other various filing deadlines, through every month of the year.

Which brings me to my main point for you today: If you’re in private practice or at a small firm, and are looking to absolutely maximize annual revenue, then the best thing you can do is maintain the intensity and productivity of tax preparation season all year round.

If you’ve ever worked at a really large firm, or a specialized, niche type of firm, then you know this is how they operate. Tax prep season is nothing special — it’s a just a minor extra blip in the year.

I know you want to relax, soak up some sun, maybe throw back some margaritas. And a little bit of that is good. But now is not the time to rest on your laurels.

As you probably know already, I spent the past 8 years as a one-trick pony, doing mostly IRS Collections representation. No bookkeeping, very little tax preparation, no Examination representation. Even more, I specialized in a narrow arena of Collections representation: 2290 and 941 liabilities for mom and pop trucking companies in five western states.

I did this work year-round, including for over 3 years at reduced yet steady volume while traveling 100% of the time.

More important than the niche specialization was the fact that I had no seasonal mentality about my business.

There are “riches in niches”, but the year-round consistency was a far more important factor for me having my dream lifestyle and a great tax practice.

So even though “Tax Day” is here, I want to encourage you to keep on truckin’. Be that one person in your local market that keeps charging … Continue reading

Where do you really want your tax practice to be in ONE year?

Most tax professionals that I speak with aren’t really sure where they want there practice to be. They’re doing this thing that they do, week in and week out, but don’t really have a vision for where they want to take it.

Many motivational speakers will talk about having a 5-year plan for your life. They talk in terms of very long-term goals and planning. But I think on a much shorter scale, and there’s no reason not to. Amazing things can be accomplished in twelve months or less, particularly in a professional services business like tax or accounting. There’s absolutely no reason for us to look on a time horizon longer than a year, especially if you focus heavily on tax services, due to the natural annual cycle of most things in tax.

Have you given any thought to where you want to be a year from now? If not, this is the time to think about it. We’re in the lull between tax seasons, and it’s convention and seminar time, so practice management and planning are probably near the top of your mind right now. In fact, if you haven’t yet registered for one of my live workshops, I’d encourage you to do so. See the workshop schedule here.

It’s completely possible to take an accounting practice from one person and $60,000 per year in revenue to 10 people and $2 million in revenue in one year flat: It’s been done. If your ultimate goal for your practice is to grow to this level, then what are you waiting for?

If your goal is to never have employees and remain a solo practitioner, but want to double your revenue and live full time in a foreign country while serving your American clients, that’s been done, too. There’s nothing stopping you from doing it, and it’s very doable within just a few months.

Go for a walk and give serious consideration to what you want your practice to look like a year from now. If it’s growth, then there is a marketing solution. If it’s location independence, there’s a practice management solution. No matter what you want out of your practice, you can have it.

Remember, you created your business to serve you, not for it to be the master of your life.… Continue reading