Case Study: How One Small Tax Firm Built Their Sales & Marketing Machine

This is the story of a small CPA firm (three partners) in New York City that hired me in January 2011 to help them grow their tax resolution business. I worked with them to create a written, systematic, and scheduled marketing process to drive sales of this service, which then fed sales of their other service offerings.

The firm employs no sales closers, and they rely exclusively on old tax lien filings (3 to 6 months old) as sales leads. They use old leads because, after a couple months, the vast majority of tax resolution firms have quit calling them, and they are therefore able to pick up clients with very little simultaneous telemarketing competition.

The firm’s telemarketers (“openers”) call these tax liens to verify that they’ve got the correct business, confirm that the tax lien is still an issue, and collect an email address and/or fax number and obtain permission to send “free information regarding how to get the IRS off their back” — there is absolutely no “selling” involved in a traditional sense. They then immediately receive a two-page introduction letter via fax and/or email, and they also receive a 12-page info packet (a 9 page sales letter, 2 page engagement letter, and a payment form) in the mail that comes in a specialized red “Rush Priority Express” envelope.

Every 5 days for 60 days, without fail, completely on automation, the prospect gets an email and/or fax with a short blurb (about two paragraphs) about a tax topic, and an offer — free consultation with a CPA (NOT a salesman), a free review of their latest IRS notice, X percent off representation, free end of year 940 prep, two 941’s prepared during the course of representation, etc. These “touches” are a highly effective follow up program from the very beginning, and their phone rings off the hook.

The key to this tactic was the creation of the series of emails (duplicated as faxes) that go out over the course of a couple months, every 5 days. Prospects are bombarded with the risks of being in collections, the problem with going at it themselves, and what the firm can do to fix the situation. This follow up program puts the CPA on the “right side of the desk”, as prospects then call in for help, rather than the CPA having to be the aggressor and chase the prospect down.

The licensed partners close all … Continue reading

Transferring Telephone Sales Calls To Closers

Some tax resolution organizations will choose to use a sales model in which a team of 3 or 4 telemarketers are making the initial contact with tax debtors, and then transferring the calls of people that are actually interested to a sales closer or the licensed person on staff. This is a highly efficient sales model that ensures that the closer or licensed person is only talking to interested people and doing actual consultations, making better use of their time. The telemarketers in this case can be minimum wage employees with some sort of bonus/commission structure for sales made, or even just straight hourly.

Transfers to the closer or licensed professional can be handled one of two ways. The first way is to transfer the call LIVE, which is often more effective. The other option is to have the telemarketer set telephone consultation appointments for the closer. The latter method is often preferential for very small firms and solo practitioners. In the case of a solo practitioner operating only in their local area, these appointments can be physical, in-office appointments to discuss the tax problem, and the telemarketer must screen the prospect using a set of questions developed for that purpose, to ensure that the licensed professional can actually help them and their time is being used most efficiently.

Live Transfers

The transfer from Opener to Closer needs to be done smoothly and professionally! Once you have the call you should have an intro. For yourself that goes something like this…

“Hi (prospect) , this is (your name), I’m one of [FIRM’s] [senior consultants, attorneys, CPA’s, Enrolled Agents], and the reason (opener) transferred you to me is to take the conversation farther to see if we can be of service for you on the (tax issue) problems. OK? Now, as (opener) explained, [FIRM] specializes in resolving government tax lien problems for companies all across the country. Actually, we have clients in every state in America. Also, as you probably know we get the tax lien info from public record sources. Anyway, (opener’s) notes state that you owe the (IRS / State) approximately ($ amount) in back taxes: does that sound right?”

[Remember, you always want to be asking questions that either get you YES answers, or that ENGAGE the prospect in CONVERSATION.]

After receiving a YES answer, or engaging in conversation about the correct tax debt amount, continue with the script:

“What I need to … Continue reading

Understanding the IRS Trust Fund Recovery Penalty

One of the most common points of confusion among business owners in regard to their tax debt has to do with the Trust Fund Recovery Penalty. I’d like to explain what “trust fund” taxes are, where they come from, how the IRS holds somebody personally responsible for them, and, most importantly, what you can do about them.

What Are “Trust Fund” Taxes?

“Trust fund” taxes are any tax that is collected by you, on behalf of somebody else. There are many different trust fund taxes, but the two most common are sales taxes and income withholding taxes.

Most states are very aggressive about collecting sales taxes (North Carolina will physically arrest you for not paying them). Technically speaking, sales taxes are owed by the person making the purchase. However, because they are collected at the point of sale, they are a trust fund tax. This is because the person paying them (e.g., your customer) is “trusting” you to hold that tax money and pay it on their behalf. When you receive sales tax money from your customers, you are supposed to hold it in a separate “trust” account, and then hand it over to the tax man when it is due (usually monthly, in most states/counties).

Income withholding taxes are also “entrusted” to you by your employees. Specifically, these are income taxes you withhold from paychecks, and the employee’s half of Social Security and Medicare that you take out of their paycheck.

Even though the employee never sees the money that’s taken out of their paycheck, they expect it to exist, somewhere. That somewhere is a trust account (generally your payroll account) where you save that money up and then pay it to the government every two weeks or monthly.

Payroll taxes are the one of the biggest enforcement concern to the IRS. Part of running a business and having employees is exercising ordinary business care and prudence. This is fancy lingo enshrined within the tax code that basically means the IRS expects you to exercise common sense in regards to running your business. Part of this common sense is to understand that your employees cost you more than just the paycheck you actually write them, and if your business doesn’t have the revenue to support those extra costs of having employees, then you shouldn’t have the employee.

So, to recap, trust fund taxes are taxes that are owed by other people, such as … Continue reading