I focus mostly on financial planning, tax preparation, and tax representation and I'm surprised to find that tax professionals aren't more heavily involved with tax representation. Most of my tax representation clients reached out once they received a tax notice from the IRS or a state taxing authority. The question then becomes: is this individual looking to make things right and address the matters at hand (which may involve the payment of taxes, penalties and/or interest) or are they trying to push through dubious deductions, skirt the tax laws, and take aggressive tax positions to avoid paying what they rightfully owe?
To manage my risk, I always have a conversation with the prospect to get a feel of which type of client they will be. Furthermore, I always review the notice received along with the last 2 years of filed income tax returns. If I feel that I can help by filing an amended return and/or preparing a response to the notice on behalf of the client, then we may move forward. However, if the nature and/or extent of the issues is outside of my areas of expertise, then I will pass. Overall, tax representation brings in decent revenue on its own and creates recurring revenue from trusting clients who get "back on track" and wish to remain compliant from an income tax perspective moving forward.
As an example, one client reached out because they received an IRS notice assessing approximately $24,000.00 in additional taxes and penalties. Per review of the notice and the original return, I noted that the issue was due to incorrect reporting of Schedule D transactions related to MLPs. I prepared an amended income tax return which showed the correct additional liability of $900.00. Client was happy and the IRS was satisfied. Everybody wins.