Category: Tax Resolution Technical Training

Hey Tax Pro! You are Leaving Money on the Table by NOT Offering IRS Collections in Your Practice

Listen up, tax pros. You’re missing out on a goldmine sitting right under your nose. I’m talking about IRS Collections, also known as Tax Resolution. If you’re not offering this service to your clients, you’re practically handing money to your competitors. Let me hit you with some cold, hard facts about why you need to add this to your practice ASAP:

  1. Massive Market Opportunity
    In Fiscal Year 2023, the IRS collected over $104.1 billion in unpaid assessments. That’s BILLION with a B. There’s an ocean of taxpayers out there drowning in IRS debt, desperately seeking a lifeline. Why aren’t you throwing it to them?
  2. High-Value Cases
    According to the Tax Resolution Academy®, the average fee for a tax resolution case is $3,500. That’s not chump change, folks. One solid collections case could be worth 10 or more basic tax returns.
  3. Year-Round Revenue
    Tax season comes and goes, but IRS collections work is a 365-day money machine. No more feast-or-famine cycles in your practice. Keep that cash flowing all year long.
  4. Differentiate Your Practice
    The NAEA reports that not all tax preparation professionals handle IRS collections cases. By offering tax resolution services, you’ll stand out from the crowd of basic tax preparers and attract higher-quality clients.
  5. Leverage Your Existing Skills
    You already understand the tax code. IRS collections work is a natural extension of your expertise. Don’t let that knowledge go to waste! It is not uncommon for a prospect to come in with a balance due to the IRS, but have a need to file at least 1 or 2 old tax returns.
  6. Recession-Proof Service
    When the economy tanks, tax problems skyrocket. By offering collections work, you’re insulating your practice against economic downturns. So, when some people turn to be a DIY with their tax return, you can fill in the gaps with additional collections cases.
  7. Repeat Business and Referrals
    Solve a client’s IRS nightmare, and you’ve got a loyal customer for life. They’ll sing your praises to everyone they know who’s in tax trouble. Oh, and yes, occasionally you get a boomerang client that screwed up and needs your help again.
  8. Higher Perceived Value
    Tax resolution is a specialized skill. Clients will view you as an expert and be willing to pay premium rates for your services. Much more than they pay for the commodity tax return. It is not hard to get $250-750/hr on many of these cases.
  9. Personal
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Cost of Client Procrastination on your Tax Practice!

We are now in what I affectionately call the Second Tax Season. While it is not usually as base as the first one of the year, it can get pretty hairy. If you are like I used to be, you would pick up your hours as the extension deadlines approach. In some cases, working 60-70 hours a week (or possibly more). 

So, the question becomes, why do we do this? The simple answer is we love our clients. We love them so much, we take their abuse. Yes, I said abuse. Seems like a strong word, but follow this with me for a few minutes.

You work really hard from January to mid-April. You take a little bit of rest, but then it is back to work on the extended returns for the information you had most of their info. Then there is that final 10-20% of returns you have in your office to do, but you can’t. Why not? Because you are missing 50-80% of the information you need to prepare the return.

So, what do you do? You start sending emails to these clients to request that missing info. As time moves on, and their excuses keep piling in on why they cannot produce that info, you start having your staff calling them to get the info into your office.

Days turn into weeks, weeks into months, and now the deadline is upon us. This is when you send the final email about two weeks before the final deadline. You tell them that if it is not filed on time they will incur late filing penalties which can be very expensive.

Well, that lit the fire under their butts and they finally get the information to you with 10 days (or less) for you to get the return done. What do you do?

Well, if you are like most tax professionals, you just grin and bear it. You hunker down and get the return done. You get it done on time, bill them the same amount you did last year and we all move on.

BUT WHY?!! Why do we do that?

We take this abuse! You don’t have to, nor should you take this abuse from anyone! It doesn’t matter if they have been a client 15 years, or their your mother or brother. There is no excuse for them making their emergency your emergency.

Here is a list of 10 … Continue reading

2024 IRS Collection Financial Standards released today (4/22/24)

The IRS Collection Financial Standards outline the average living expenses for individuals and families across the nation, covering essential categories such as food, clothing, housing, healthcare and transportation. As tax professionals, it’s our duty to ensure that our clients are accurately represented when negotiating with the IRS. By using these standards, we can help our clients achieve a fair and manageable resolution to their tax troubles. In most cases.

Now, here’s an important update that you won’t want to miss. The IRS has just released new Collection Financial Standards today (April 22nd, 2024), reflecting the current economic conditions, inflation and cost of living. This means that it’s time to roll up our sleeves and update the financials of our current client cases with the new numbers. Failing to do so could result in inaccurate assessments and potentially unfavorable outcomes for our clients.

When applying the IRS Collection Financial Standards, it’s essential to thoroughly review your clients’ financial situations. Take into account their income, expenses, and any unique circumstances that may affect their ability to pay. By subtracting the standard living expenses from their income, you can determine the amount that the IRS expects them to allocate towards their tax debts. This information is crucial when negotiating installment agreements, offers in compromise, or other resolution options.

As licensed tax professionals, it’s our responsibility to stay up-to-date with the latest IRS regulations and guidelines. The release of the new Collection Financial Standards serves as a reminder of the ever-changing landscape of tax resolution. By incorporating these updated standards into our practice, we can provide our clients with the most accurate and effective representation possible.

So, let’s embrace the challenge and use our expertise to navigate the complex world of IRS collections. With the new Collection Financial Standards in hand, we can help our clients find a path towards resolving their tax issues while ensuring that their basic living expenses are met. Together, we can make a difference in the lives of those we serve and demonstrate the value of having a knowledgeable and dedicated tax professional in their corner.

We will be updating our CFS Quick Reference Guide shortly. Check your email for how to access it.

Warmly,

Dan

Want to get some great education! Then click here to find out more about the Tax Rep Defender Odyssey 2024

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Dan Henn, CPA, CTR™
Managing Member
Tax Pro Academy, LLC

P.S. Want to learn more about the Tax … Continue reading