What advice do you have for someone just starting out in tax resolution?
Learn. Read the Internal Revenue Manual, especially the parts about representation, like part 5 which is all about collections. Take classes. If at all possible, spend a year or two working with an existing, reputable representation firm with people that have experience doing tax resolution correctly. If you're just starting out, avoid one of those massive shops that are handling things without any oversight or support. That's not the place to start - that's a sink or swim thing.
What are the best tax resolution classes?
There are three sources that I recommend:
1. My 2 classes, the Enrolled Agent (EA) Exam Review Course and the Tax Practice Series Course.
2. The classes offered by the NAEA and NTPI.
3. The classes hosted by ASTPS and Larry Lawler's
Those are the three best places to get an education on how to handle tax resolution.
What challenges can our audience expect once working in tax resolution?
Getting paid is the biggest challenge. You have a lot of people coming to you who are sincerely in trouble and don't always know how they got there. If they can't afford to pay the IRS, how are they going to pay you? Everyone will have a sob story. If you are going to accept their sob story without getting paid, you can't make a living. If you can't make a living, you can't help anybody.
You have to learn how to be firm and insist on getting paid upfront before the work is done. If you wait until after you do the work, the risk is greater
Another challenge is organization. The deadlines in tax resolution are very different than the deadlines for a typical CPA. Every client has their own deadlines. You need to use some kind of tool to stay organized and notify you of the deadlines - I personally do a
How much money can you actually make practicing tax resolution?
If you know what you are doing, you can make money pretty quickly. The first few cases will take longer because there is a learning curve. When you price a case, do not price it below $2,000-3,000. Each case can take between 20-40 hours depending on your experience level. Preparing the tax returns will be priced separately. A tax resolution specialist can take on 2-3 clients a month and do well.
A lot of people that do tax resolution cases are just individuals doing the tax resolution work from home. You can make between $5,000-$10,000 a month with low stress and no extra staff. The biggest danger is having too many clients and having too much work on your plate.
If you want to build a practice that makes over $200,000 a year, you will need a lot more staff to do that.
How do you find new clients?
There is enough work out there within your own community. I would suggest getting involved in your community - through your Chamber of Commerce and by offering education and classes. You want to be the go-to person in your community for tax resolution and representation. I have a friend who teaches classes in her local community and she has more business than she can handle.
What do you think of the current state of the IRS?
I think they've done a phenomenal job at compiling resources for the public. If you go to their website, you'll find incredible information and videos that will give you all the information you need. The stuff is out there, you don't need to talk to someone from the IRS on the phone to find it. You can find it all on their website.
Now that you're convinced you should add tax resolution to your practice, here's a guide to pricing your tax resolution services.
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