The average fee for preparing a 1040 income tax return is $273 nationwide. You may be charging slightly more than this right now. However, the average fee that a tax resolution client pays you is $5,000 and up. Resolving tax problems earns double to triple your current hourly rates because you can easily employ value, fixed fee pricing for this work. But, that’s only part of the good news. During tax season, one client usually means one tax return, one fee. The season is short and then you’re back hustling for business. When you are a tax problem resolution practitioner, you’ll have profits and cash flow year round.
Unless you like making those dreaded monthly collection calls and wasting time chasing after receivables, versus working on earning new business, you may decide that tax problem resolution work is just what the doctor ordered. NO MORE SENDING INVOICES. NO MORE ACCOUNTS RECEIVABLE!
IRS Problem Resolution clients expect to pay in advance. You will enjoy having money in the bank for services yet to be performed. You’ll have deferred income on your books not to mention the time saved by eliminating making those monthly dreaded collection calls.
Generally, in this area of practice, deadlines are flexible or more generous than those in typical compliance work. I have had many occasions where I had to reschedule IRS Appeals and other dates for family events, and vacations.
Business experts regularly advise working in a niche as the way to achieve real financial independence. Tax resolution is the only way to do that, building on the skills and credentials you already have. With having a step-by-step blueprint, you can launch a new specialty that may do the same thing for you that it did for me and my students.
A significant portion of this work can be handled by non-licensed staff. This frees your time to work “on” your business instead of “in” it. You can further leverage your time through case management tax resolution software.
Marketing to a niche market eliminates competition. In fact, former competitors become referral sources. Additionally, being in the powerful position of being able to offer IRS Problem Clients much needed relief will be known throughout your community. Being recognized as the practitioner specializing in tax problem resolution will bring referrals from people and other professionals you’ve never met before. You’ll be known as the “go-to” person for help.
BONUS TIP: The IRS Is Actually Your Marketing Partner!
The IRS is not only filing liens and levys the old fashion way (by Revenue Officers and by ACS telephone collectors), but now they are being filed automatically by technology – do you think troubled taxpayers will need help more than ever?
Taxpayer’s with IRS problems will typically make one of four choices when dealing with the IRS:
1. Pay the IRS 100% of what the IRS says they think they owe NOW.
2. Ignore the IRS until they decide they have waited long enough for the taxpayer to deal with the problem and will now inflict serious harm by taking the taxpayer’s income and/or assets, leaving them very little to live on.
3. Set up a never ending monthly payment plan because the IRS keeps piling on penalties, interest, and interest on top of penalties. The accrual of all these extra charges often results in the balance due growing every month despite the taxpayer making his or her monthly payments.
4. Reduce the total amount they owe to an affordable number with the help of a Tax Problem Resolution Specialist and get on with life.
Which one of these choices do you think most people would make? If they had the money to pay the IRS, they would have done so already. Others will wait until the problem has negatively affected all aspects of their life. Yes, some uninformed people will just set up a payment plan that continues to add interest and penalties. They seldom do this in their best interest and could use your help to fix their mistakes. Many agree to monthly payment amounts they just can’t keep up with.
Your most profitable cases will come from the last group. These are your bread and butter $5,000+ clients! They need help, they want help and the IRS is probably already after them so they’re ready to act NOW, and they will PAY you in ADVANCE to get the help they need to get the IRS off their backs.
Author Bio: Michael Rozbruch is a nationally recognized entrepreneur and is the founder of Michael Rozbruch’ s Tax and Business Solutions Academy™, and Roz Strategies ™ an eLearning, coaching and consulting services company that helps CPAs, Attorneys, and Enrolled Agents build highly profitable practices by helping them add lucrative Tax Resolution clients to their firms through proven direct response marketing systems and sales strategies. He also trains on how to manage the client relationship and knows firsthand how to run a best practice IRS Representation practice.