Just in case you don’t keep up with IRS regulatory changes on a day to day basis, yesterday was a momentous day. After 15 years, the IRS finally fixed the single greatest problem with the Offer in Compromise program, and reduced the remaining income multiplier from 48 or 60 down to 12 or 24 when calculating the Reasonable Collection Potential (RCP).
In addition, the IRS is now allowing Federal student loan payments and delinquent state and local taxes as an allowable expense, and has expanded the national standards under the miscellaneous category to allow room for minimum credit card payments.
What does this mean for you? It creates an incredible marketing opportunity, as the minimum acceptable Offer amount for prospective clients just dropped by as much as 80%. This will drastically increase the number of people that can (and will) file processable Offers.
In particular, I see this as an opportunity to tackle two distinct target markets:
1. High dollar Trust Fund Recovery Penalty (IRC 6672) cases, particularly those with lien amounts between about $100,000 and $250,000.
2. Mid-range 1040 debtors (those that owe approximately $15,000 to $50,000) that have traditionally been blocked from the Offer program because of the remaining income multiplier.
This kind of marketing opportunity has been handed to us on a silver platter by the IRS approximately once per year for the past three years now. If you missed this opportunity in 2010 and 2011, then be sure to take advantage of it now.
Here are my suggestions for exactly HOW to take advantage of this policy change:
1. Utilize the 80% reduction in the minimum Offer amount statistic in your direct mail pieces, email newsletters, blog posts, and telemarketing scripts.
2. If you traditionally only market to businesses, start marketing to individuals using the criteria I suggested above.
3. Create a limited-time flat fee Offer in Compromise service, and market it heavily.
4. Go through your list of prospects from the past 6 to 9 months that did not hire you, and call, email, and mail them in regards to the new OIC criteria.
I guarantee you that some astute practitioner out there that doesn’t subscribe to this newsletter is thinking along the same lines as this, and is going to take action. The relaxation of the OIC criteria is going to create a slew of potential new clients in the marketplace, and you can choose to either take advantage of this or let it pass you by, it really is your choice.
If tax resolution is not your primary practice area, and you do not feel comfortable doing Offers in Compromise, I’d be more than happy to conduct a webinar within the next week or two to teach you this valuable skill. If enough people are interested and contact me by replying to this article, I’ll put that together. Keep in mind that it might be worth CPE/CLE depending on what state your are licensed in.
I purposefully limit myself to six active cases at a time that I’m willing to work on, but given the level of opportunity presented by this policy change, I’m going to temporarily break my own rule and do some extra marketing within my own tax practice. This is just too good to pass up — don’t miss out for yourself.