Want to make hundreds of dollars an hour more outside of tax season? The good news is you can by offering tax resolution services. Learn how!
1 min read
It’s a week after Tax Day, and if you’re like most tax professionals, you made the majority of your income for the year in the last few months. And you definitely put in the hours to earn it. But what if there was a way you could make hundreds of dollars per hour throughout the year, relieving some of your February to April stress? The good news is, there is. The opportunity lies in offering tax resolution services. Here’s a look at how tax resolution can make your practice more lucrative outside of busy season.
According to the 2015 IRS Data Book, there were more than 13 million open collections cases with the IRS, with a 23% growth in the tax resolution market since 2010. That’s a huge market opportunity that most tax professionals aren’t even taking part in. According to the NAEA, less than 2% of enrolled agents offer representation services. And according to the AICPA, only 10% of licensed public accountants do.
People who have IRS problems require services all year long, not just during tax season, and there is more demand for tax resolution work than there are professionals currently offering it. Why not offer the help these taxpayers need and set yourself apart from your competitors while you’re at it?
There is more demand for tax resolution work than there are professionals currently offering it.
As mentioned in the previous section, tax resolution clients require the help of a tax professional at all different times throughout the year. The IRS isn’t flexible with their deadlines once they’re set, but often you'll get to decide when to formalize a case with the IRS. Plus, your clients' cases will be in varying states of urgency. The nature of tax resolution gives you much more schedule flexibility and potential for planning your workload than tax preparation does. Because of this, you can spread out your workload effectively and make a more consistent income outside of tax season.
Tax resolution marketing expert Jassen Bowman said, “Offering IRS problem resolution is the best way I know of to make good money year-round, grow your tax prep and accounting business, and eliminate the seasonal nature of being a tax professional.”
Offering IRS problem resolution is the best way I know of to make good money year-round, grow your tax prep and accounting business, and eliminate the seasonal nature of being a tax professional. -Jassen Bowman
Tax preparation pays an average of $21.73 an hour. In comparison, tax resolution pays anywhere from $175-$500 an hour. That’s up to 23 times more! Client fees per case usually range between $3,000 and $5,000. Plus, a lot of the busywork can now be automated and streamlined, which means you can make more money in less time. At those rates, you wouldn’t have to take on very many cases per month to significantly increase your yearly income. In fact, at an average of $3,000 per case, you would only need to take on two to three cases every month, and you would more than double your monthly income.
Tax resolution pays up to 23 times more than tax prep.
The way you price your tax resolution services should be intentional. There are a few different pricing models that are commonly used within the industry—choose the one that works best for your practice. If you need a place to start for reference, you can check out this pricing report we’ve put together.
Keep in mind, one simple way to increase cash flow is to have clients pay you at least a portion of the amount owed upfront before you start working on their cases.
The way you price your tax resolution services should be intentional.
Interested in earning up to $500 an hour with tax resolution but don't know where to start? First, download this checklist for adding tax resolution to your practice. Then for more information, download our free ebook below!
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Canopy takes the headaches out of client management by offering a way to keep client info organized.
I love how easy it is to setup a new client in this software. Once set up, it's one click to get IRS transcripts downloaded for my review. This saves me at least an hour each week in comparison to the software I used to use.
This makes workflow for tax resolution manageable. This business is a bunch of hurry up and wait. This system helps to refresh my memory while transitioning to different clients.
The ability to securely share documents with clients as well as complete POAs from client contact data already in Canopy. The ability to route workflow between team members with color coded statuses allows us to work efficiently.
Cool features, outstanding customer service, constantly updating to make it better. I love that I can upload files easily to a secure client portal and we don't have to email files anymore. Absolutely can't imagine not having this software.
It's safe and secure. Clients are able to upload documents and the documents are saved their portal which as a result, keeps us better organized. The task feature keeps us organized and we know exactly the status of each client.
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