Filling your tax season appointment calendar

Tax season is right around the corner, which means that right now is the time to be doing two things to ensure you have a great tax season:

1. Get in touch with all your past clients to schedule their appointments for 2012.

2. Advertise to get new clients in.

Simple postcards or letters to your past clients should be going out now to remind them to schedule an appointment to get their 2011 tax return prepared.

For getting new clients, here are some suggestions for where to advertise:

1. Your local MoneyMailer or ValPak, which is a thick envelope of coupons delivered to houses in most cities.

2. Local special interest newspapers with an offer targeting that interest group. Examples from my local area include weekly Spanish language and senior citizen newspapers, a monthly outdoor/sports enthusiast magazine, a weekly business newspaper, and a weekly printed newsletter targeted to farmers and ranchers.

3. Send direct mail offers, either postcards or letters, to the residential postal delivery areas closest to your location.

4. Put up flyers with detachable coupons or phone number at supermarkets, flea markets, parks, malls, and anywhere else with free public flyer boards (I’ve seen entire tax practices built from this simplest of all marketing methods).

5. Put up small signs along roads and major intersections. Check with your local authorities to determine if this is legal and if you need a permit.

6. Deliver flyers or door hangars door-to-door in your target residential neighborhoods. Again, check local laws and permit requirements for this.

Any ones of the above 6 methods can fill up and entire tax season for a solo practitioner or small tax office. Used in combination, the results can be simply astonishing. On top of that, most of these methods are not all that expensive, and some are even free.

If you haven’t already, you should get your hands on time-tested tax firm marketing ads, flyers, and mailers to assist in your marketing efforts.

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IRS Tax Resolution Through An Installment Agreement

The IRS allows taxpayers to resolve their outstanding tax debt via a payment plan, which they call an “Installment Agreement”. Most of these plans have a set monthly payment, but they can also be adjusted based on your seasonal cash flow, and they also permit tiered agreements that call for occasional increases in the monthly payment amounts.

Some taxpayers may qualify for special installment agreements that require little or no financial documentation, similar to a no-doc or low-doc mortgage.

In rare circumstances, based entirely on your financial situation, you may even qualify for an Installment Agreement in which you never fully pay off the back tax liability, called a “Partial Pay Installment Agreement” (PPIA).

As part of negotiating your installment agreement, a comprehensive financial analysis of your business or personal finances will be required. The kind of information we will need to review, as mentioned above, is very similar to what would be required for a loan application. For businesses, this information includes all of the standard business accounting information, such as:

  • balance sheets
  • bank statements
  • profit and loss statements
  • accounts receivable aging reports
  • asset lists & depreciation schedules

At first, many clients are apprehensive about providing this detailed financial information to a tax consultant. However, this information is necessary to perform a proper financial analysis and properly negotiate your tax resolution.

If your financial situation is such that you can legitimately only pay a a minimal amount, the IRS will likely grant the Installment Agreement, even if the payments will not fully satisfy the tax debt. For example, if you owe the IRS $60,000, and a payment plan of $200 per month is negotiated, and you have 3 years remaining until the statute of limitations runs out on collection, you will have paid in only $7,200, and then the statute of limitations runs out and you’re off the hook for the remaining balance. This is called a Partial Pay Installment Agreement (PPIA), and is nearly identical to an Offer in Compromise being paid under the Periodic Payment option. It is important to weigh the merits of the PPIA option versus the Offer in Compromise option when considering your tax resolution options. Be sure to ask your tax professional about the pros and cons of each of these options.

There are two special types of Installment Agreements that you may be eligible for based on how much you owe. If you owe less than $50,000 … Continue reading

Cultivating Long Term, Highly Profitable Client Relationships

Let’s talk about a very important business concept: Lifetime Customer Value (LCV).

What exactly is LCV? Quite simply, it’s the amount of money you can expect a single customer to spend with you over the entire life of their business relationship with you.

Quick tax return example: A customer with a simple 1040 return comes to you every year, and you charge them $200. If they come back year and year, and you never raise your rates (which you should, by the way!), then this customer is worth $2,000 over the course of a decade….$6,000 over the course of 30 years in tax practice.

Instead of looking at a customer in terms of a single transaction, LCV as a concept forces you to look at each of your clients as a long-term business ally. On a balance sheet, your client list should literally exist as the single most valuable asset in your entire tax practice.

Most tax practitioners I speak with think largely in terms of either their seasonal tax customer base, or their monthly accounting clients. Most tax professionals do absolutely nothing to foster long-term relationships with their clients, and simply view them as a tax return that walks through the door once a year.

There are a number of problems with this thought process.

First of all, if you view each client as “just a tax return”, then you are obviously caring more about yourself than your client, and this is just a bad business mentality. Legendary sales trainer (never forget, you *ARE* a salesman, no matter what the initials after your name say) Zig Ziglar is quoted as saying, “You will get all you want in life if you help enough other people get what they want.” What Zig is saying here is that if you look out for your clients, they will reward you financially.

Second, if you only think about any particular client in terms of doing their tax return once a year, or doing their books once a month, or handling their payroll every two weeks, you are missing out on a MASSIVE opportunity to be of greater VALUE to your customers. You are in a position to offer money saving tax advice to your customers and prospects. If you aren’t doing this already, then why not? Do you do mid-year or quarterly reviews for your clients to discover new tax savings? Are your monthly accounting customers spending … Continue reading