Category: Operate A More Efficient Tax Firm

What is the singular focus of your tax firm?

Last year, we were one of the first companies to provide comprehensive CPE on the PPP and EIDL processes so that you could assist your clients with such matters.

Because of that, I’ve been getting a ton of emails from people over the last three weeks asking when we’re going to teach PPP/EIDL update classes.

Here’s your moment of disappointment: This year, we are choosing NOT to present such classes, despite recent legislation.

Why not? For a number of reasons:

1). The PPP program hasn’t changed that much from last year. You should be able to fill in the gaps easily from journal articles and official guidance from SBA and Treasury.
2). The EIDL program has changed even less, so ditto to above.
3). It’s not our core competency, doesn’t fall into our central mission, and is therefore something we shouldn’t even focus on.

It’s this last thing that I really want to address.

Our website is

Tax. Resolution.

Hmmm… If something needs “resolution”, that must mean there is some sort of issue. A problem. A dispute.

About taxes.

See, the name itself provides a clue about where our boundaries are.

In my normal email signature, I include a quote from author and entrepreneur Oliver Emberton: “Monomaniacal focus on a single goal is perhaps the ultimate success stratagem.”

What’s he talking about? Focus on what you do best.

If you’ve been reading my emails for a while, you may be thinking that I’m about to go off on a rant about niching your business. Focusing on specific services and serving specific industries or professions.

Yes, yes, I am. But not here. If you want to read my past rants, start here or here.

My monomaniacal focus right now is on finishing development of the CTR™ program. There are still about 20 classes, of two hours each, still to prepare. There’s a case study practicum to create. An exam to write. In terms of new content creation, this is my focus right now, as it should be — not PPP and EIDL matters that are not directly related to our core focus.

You should be applying a filter, also. If 100% of your client base consists of W-2 wage earners, it’s an absolute waste of your time, money, and brain cycles to learn about PPP and EIDL stuff. Absolute waste. Shouldn’t even be a consideration. On the other hand, if your … Continue reading

Why You Should Become An Enrolled Agent

Note: If you’re already an EA, CPA, or attorney, then this post will be of zero interest to you. If you’re an unenrolled preparer, however, keep reading…

It’s becoming increasingly common for me to receive emails like this one from a return preparer in Sacramento, CA:

I would like to pursue this opportunity. I am currently not an EA. What ways have others moved ahead until they became an EA? Can I hire one? What do you suggest?

Here was my verbatim reply to this particular email:

By “this opportunity”, I presume you’re referring to collections representation services?

While hiring an EA, CPA, or attorney is definitely an option, I would still encourage you to obtain your Enrolled Agent license yourself. Honestly, the test isn’t that difficult for an experienced tax preparer that puts in a couple weeks of study. The Gleim test prep books are the ones I used, and they were pretty good.

The reason I would encourage you to get your license yourself, even if you hire a licensed person to do the work, is because by IRS regulation, you must be licensed in order to solicit representation services. In other words, it’s a violation for an unlicensed person, even an experienced preparer, to sell licensed representation services.

A couple weeks of study and a few hundred dollars for the tests is a tiny price to pay to be able to sell something as lucrative as tax resolution, in my biased opinion. 🙂

Since this comes up frequently, I figured it was finally worth it’s own blog post, so here we go.

Let’s start with the one thing that I feel I’ve become a broken record about over the past few years:

In order to sell tax resolution services, you MUST be licensed. This is non-negotiable.

I’m starting with this, instead of “why you should be licensed”, because I feel like it’s the most salient point for anybody reading this blog. Most folks end up here because of the information I provide on marketing and selling tax resolution services.

In case you’re not familiar with Revenue Procedure 81-38, this was the original Revenue Procedure covering limited practice without enrollment. Section 8 of this Revenue Procedure explicitly bars individuals that are NOT an EA, CPA, or attorney from soliciting representation services (which is what “tax resolution”) is.

Many folks erroneously believe that every provision of 81-38 was replaced by Revenue Procedure 2014-42Continue reading

Making money *after* tax season

It’s been a hard push the past few months.

There’s one day left to go in a jam packed tax season. You’ve made plenty of cash to last for a while. You’re exhausted, and you’re just ready for it to all be over.

Sure, you’ll have some extensions to work on. But it’ll be the life of leisure after this week, right?

For most tax professionals, that statement couldn’t be further from the truth.

Now, if you’ve configured your life in such a manner that you can live on your tax season revenue for the remainder of the year, then I applaud you.

For most tax pros, however, it couldn’t be farther from the truth. The stark reality for most of our colleagues is that tax season is the time when you have enough money to finally catch up on bills, pay your own taxes, pay off the Christmas credit cards, catch up on the mortgage they were two months behind on, pay the kid’s next tuition bill, and on, and on.

Even though we make good money during tax season, it’s not that hard for it to suddenly all vanish, and then we’re struggling again for the rest of the year.

Here’s how you break out of that boom and bust cycle: Have multiple revenue sources within your practice to even out the peaks and valleys of seasonal business. Specifically, I suggest having three solid revenue sources within any practice, and my favorite happens to be IRS collections representation.

There are a number of issues impacting all professional service providers, including CPAs, attorneys, and EAs alike. Consider the following info from the legal world, while bearing in mind that similar trends exist in the accounting space:

  1. Smaller Pie – As the New York Times recently pointed out, “Legal forms are now available online and require training well below a lawyer’s to fill them out.” In other words, the Internet is decreasing the public’s reliance on attorneys for simple matters. The same phenomenon has been see for CPAs and EAs with the rise of QuickBooks, consumer tax software, and IRS Free File.
  2. More Mouths to Feed – The number of attorneys continues to grow: We saw 6,694 new attorneys passing the bar last year in California alone. Worse, a lot of the larger firms are laying off, and when those layed off attorneys can’t find work, they start their own practices, creating more competition. Business
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