Tax Resolution

Is there anyone willing to connect to start a remote tax resolution business?

I'm an EA, solely doing tax preparation work for my father's biz.

However, I recently started working on the side as an independent contractor for a large tax resolution firm handling all sorts of cases. I deal with all types of installment agreements, offers in compromises, and placing clients in currently not collectible status.

I like this part of tax work and I see huge potential in this industry. As you all know, no one likes to deal with the IRS, so they are willing to pay almost anything to have you deal with the IRS to handle their case.

Interested in that type of work and would like to know more

Sorry for the late response, busy with year end planning and some CPE
I have had countless interactions with the IRS via letters, phone calls, over my 30 years of experience, several calls this past year with the Practitioners Priority Service for various issues, all were resolved favorably
Worked on Tax Court case with an attorney years ago and testified
I have evaluated some clients for resolution but they had too many assets to be considered, a couple of clients ignored my opinion and paid thousands only to hear the same thing
Very interested would like to explore further

Interested

I have another post related to this that's redundant and probably should be deleted.

I just wanted to know why some practitioners choose not to do resolution work. Just seems like it would make sense from a customer service standpoint.

CP Hay, resolution work is time-consuming, especially if one does not do it all the time. So it can mess up the flow of work on the office. For myself, I would think very carefully about taking on someone whose first contact with me was complex resolution work. I’d want to be confident that there was a continuing engagement, ie, “I know I’ve messed up. I want you to help me with the mess I’ve created then keep me straight from now on.”

I just wanted to know why some practitioners choose not to do resolution work. Just seems like it would make sense from a customer service standpoint.

Do you mean helping people who are audited by the IRS? Or people who violate the law (a.k.a. illegals) by choosing not to file and pay on time?

I mean taxpayers who are being audited or others who are candidates for Offers In Compromise.

As others have posted resolution work, OIC etc. are generally messy and time consuming. If you want to specialize in that as your main line of business that is fine, but doing it part time during tax season where your focus and main source of income is tax prep and filing will cause workflow issues if you are not staffed properly.

When I was younger and had more energy, I tried it but soon realized I usually bit off more than I could chew. Now I have become more practical and farm out that work to a local EA. My focus is tax prep and tax planning.

So the bottom line is think before you jump!

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.

I will never again a accept a client who hasn't filed for years, is self employed, and didn't make estimated payments. These people are losers and a total waste of time. If they can stick it to the IRS and state for years, they will stick it to you.

That's why you get paid up front from these people.

I will never again a accept a client who hasn't filed for years, is self employed, and didn't make estimated payments. These people are losers and a total waste of time. If they can stick it to the IRS and state for years, they will stick it to you.

Fair observation. Even if you collect your fees in advance it is a short term relationship IMHO because "old habits" don't die that easily unless you are so good at what you do that you can change them

Let me be very frank. Most practitioners who like tax resolution work operate in a similar manner (business philosophy) like a defense attorney.

I will never again a accept a client who hasn't filed for years, is self employed, and didn't make estimated payments. These people are losers and a total waste of time. If they can stick it to the IRS and state for years, they will stick it to you.

Fair observation. Even if you collect your fees in advance it is a short term relationship IMHO because "old habits" don't die that easily unless you are so good at what you do that you can change them

Let me be very frank. Most practitioners who like tax resolution work operate in a similar manner (business philosophy) like a defense attorney.

You most certainly have to. Listening to these losers justify or excuse what they did makes me want to scream. Hubby and I did take on two clients who were behind a couple of years. One was in jail for a DUI and he contacted me before the IRS contacted him. The other one, a friend of the former client that I would have loved to turn in, was in a coma for over half a year for a work related accident, and his filing requirements before the accident were not done, and after he got out of the hospital. Hubby was on the phone with the IRS to get them off the man's back and even told them "he's sitting in my office with a catheter attached". I think he had a good reason for not filing. His poor wife had no idea what was going on in the business.

IRS is generally willing to abate penalties when the taxpayer is in jail. I had a young client who was in jail for almost 9 or 10 months. His mother got me the documents from the Sheriffs office and IRS waived the failure to pay and file penalty. It did take some time though.

What sort of education / training is the best way to go about getting into resolution?

I've done DVDs for Certified Tax Resolution Specialist but need more training IMO. I've only done one OIC, the IRS accepted it and the lady failed to pay the amount due (she had the money). I still have power of attorney and receive notices 4 years later she's still never paid!

Revoke that POA yesterday!

Revoke that POA yesterday!

Only the one granting a POA can revoke it. A representative can only withdraw.

Anyway, there is no need to revoke, unless you subscribe to the weak theory that that an IRS POA (a very special, limited type of POA, not created under state law) creates a fiduciary duty on the the part of the representative.

Interested and could like to know more.

Does anybody have a good referral to deal with IRS resolution issues? We used to have a great former IRS revenue officer that did this work, but he died a few years ago.

This is what we received from a new 1040 client:

I need your help to resolve my outstanding balance with the IRS. My tax preparer of five years made a mistake and didn’t accurately report my income. As a result they audited my file for the last ten years and as a result my husband and I owe over $100,000 in taxes. Money we don’t have. And I went to get a HELOC and they tell me the IRS filed a lien against my home. I understand we can file a form 911 to request a 30 day removal of the lien so I can get the loan. Is that something you can help me with? If not, direct me to someone who can. I can’t continue for this to be hanging over our head, especially if we did everything right and we are being held accountable for someone else mistakes. My husband is disabled and no longer working and I am the only one working for a family of 4 and one child in college and one about to go to college starting this fall.

We stopped dipping our toes in this kind of work 10 years ago. It is a time suck and our resources are better spent elsewhere.