{"id":52223,"date":"2017-07-16t05:00:34","date_gmt":"2017-07-16t09:00:34","guid":{"rendered":"https:\/\/48e130086c.nxcli.net\/?p=52223"},"modified":"2017-09-09t07:30:08","modified_gmt":"2017-09-09t11:30:08","slug":"tax-resolution-lucrative-opportunity","status":"publish","type":"post","link":"\/\/www.g005e.com\/2017\/07\/16\/tax-resolution-lucrative-opportunity\/","title":{"rendered":"tax resolution: a lucrative opportunity"},"content":{"rendered":"
<\/a>bonus: an overview of the process.<\/strong><\/p>\n by jassen bowman<\/i> with over 14 million active irs collections cases, there is a tremendous need for competent taxpayer representation. there has never been a better time to add this highly lucrative, recession-proof service to your tax practice.<\/p>\n more:<\/b> 4 problems with the tax resolution industry<\/a> | the tax resolution client intake checklist<\/a> | how to end the tax revenue roller coaster with a four-season practice model<\/a> | how to turn routine cpe into a new marketing opportunity<\/a> in fiscal year 2015, the irs opened 8.1 million new collections enforcement cases, while only closing 7.1 million cases. altogether, these taxpayers owe the irs over $137 billion. that\u2019s more than twice the entire annual budget for the u.s. department of education. let\u2019s take a look at the tax return side. the irs has been doing a good job of encouraging voluntary compliance with filing requirements. the number of unfiled return investigations has been going down, largely because of automated data matching and the success of the cp-2000 mail audit program. however, at the start of fy16, the irs still had more than 3 million open delinquent return cases (that\u2019s cases<\/em>, not total number of returns).<\/p>\n just to round out the numbers, the irs issued 515,247 tax liens notices (668-y) in 2015, and also 1.4 million levies. while these numbers are both significantly lower than in 2014, they still indicate a high level of enforced collections activity.<\/p>\n with all these taxpayers under the gun from the irs, i hope that it\u2019s a no-brainer for you to consider adding this service to your business. but if you\u2019re still not convinced, let me throw a few other facts your direction:<\/p>\n in other words, the vast majority of your professional peers are not offering this service. as such, you have a tremendous opportunity to gain an edge in your local marketplace by delivering a unique service not provided by your competition.<\/p>\n think about this\u2026 your professional colleagues don\u2019t know how to handle these cases. this creates a powerful referral opportunity for you.<\/strong><\/p>\n now, if that\u2019s not enough for you, then consider this: the average tax resolution case fee, nationwide, is over $3,500 for a \u201crun of the mill\u201d case.<\/strong><\/p>\n most tax professionals are lucky to earn $100 to $150 per hour doing tax return preparation. tax resolution work, on the other hand, should be billed at a minimum of $175 per hour<\/strong> (or equivalent, if you\u2019re doing flat-fee value billing like i do). most tax resolution practitioners are closer to the $250-$300 per hour range, and some of us are significantly higher (my billable rate is $540\/hr \u2013 not bad for being \u201cjust\u201d an enrolled agent).<\/p>\n as a taxpayer representative, you can:<\/p>\n some of these items may be things that you don\u2019t care about, but you wouldn\u2019t be reading this if at least one of them didn\u2019t apply.<\/p>\n even if you have no idealistic notions of helping save small businesses, or you could care less about stickin\u2019 it to the man (irs) just a wee bit, i know you want to make more money. so let\u2019s delve into how this whole tax resolution thing works.<\/p>\n <\/p>\n regular installment agreement:<\/strong> a payment plan, generally monthly, that allows the taxpayer to pay back their tax, penalties, and interest, over time. during the period of the payment plan, the irs will continue to charge penalties and interest as applicable. payment must be at least $25 per month, and the irs generally wants to see the liability paid off within about 6 years (72 months) for these to be granted, although this is not codified in law. requires full and fairly intrusive financial documentation. applicable to any and all tax types.<\/p>\n guaranteed installment agreement:<\/strong> if the tax liability is under $10,000 and the taxes are of an income type in nature (not employment taxes), then the irs is required by law to accept a payment plan request that pays off the taxes within 24 months. the $25 minimum monthly payment does not apply. the ease of obtaining guaranteed i<\/u>nstallment agreements is the reason most advertising you see specifies a tax debt greater than $10,000.<\/p>\n streamline installment agreement:<\/strong> for income taxes only that are between $10,000 and $50,000 (expanding from a $25,000 limit in 2012 as part of the fresh start initiative), the irs will accept a regular installment agreement request without requiring full financial documentation or verification of the supplied information. this one program is the bread and butter of the tax resolution industry, and over 3\/4 of your cases will be resolved via this method.<\/p>\n offer in<\/strong> compromise: for taxpayers with minimal or no assets and minimal disposable income, the irs may accept whatever money the taxpayer has as payment in full of all taxes, penalties, and interest owed. this program is not automatic, requires quite a bit of back and forth reworking of numbers, full and intrusive financial documentation, and is not guaranteed. an o<\/u>ffer settlement can be paid off over the course of up to 24 months. do not<\/strong> submit oic applications on cases where the taxpayer does not qualify \u2013 crunch the numbers to determine eligibility. only 0.38 percent of irs tax debts are resolved via an offer in compromise.<\/p>\n currently not collectible (status 53, cnc):<\/strong> if the taxpayer has zero ability to pay anything at the current time, then this may be an option. full financial disclosure required, and the taxpayer has to be essentially destitute. if the taxpayer is living significantly beyond their means, but has a high income and they just spend it all on houses, cars, etc. that exceed the national standards, cnc may apply in order to give the taxpayer up to 12 months to adjust their standard of living down to the national s<\/u>tandards. lifestyle adjustment periods require mandatory re-review after the adjustment period, and are a one-shot deal for the taxpayer.<\/p>\n newco \/ sole prop flip:<\/strong> slang\/shorthand for a \u201cnew company formation.\u201d if flipping into a sole proprietorship, taxpayer will usually be required to accept personal assessment of the trust fund recovery penalty. in short, a newco is when the old business is shut down, assets are liquidated or transferred, and the taxpayer gets a \u201cfresh start\u201d with the irs under a new business entity.<\/p>\n bankruptcy:<\/strong> while not generally considered a tax debt resolution strategy, bankruptcy can be a perfectly valid method for obtaining relief from outstanding tax obligations. it is a good idea for a cpa or enrolled agent practicing in the collections representation arena to have a good bankruptcy attorney in their rolodex that they can refer clients to, as there are some taxpayer situations that are simply beyond fixing with their overall debt situation taken into consideration. it should be noted that only non-trust fund taxes can be discharged in bankruptcy. check your specific state laws, but i do not know of any states in which sales taxes and other trust fund taxes can be discharged. for 1040 tax liabilities, the federal requirements for discharge are as follows:<\/p>\n the most common reason for not being able to include a personal income tax debt in a bankruptcy filing is because the taxpayer has not filed the tax returns for the tax years in question. be sure to take this into consideration prior to referring the taxpayer\u2019s case to an attorney.<\/p>\n","protected":false},"excerpt":{"rendered":"
\ntax resolution systems<\/i><\/a><\/p>\n
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\nwith a net increase of over 900,000 irs collections cases in 2015, the opportunity for tax resolution services is bigger than it\u2019s ever been. and keep in mind that i\u2019m only talking about collections cases here \u2013 these numbers don\u2019t include examination cases. exam is an entire other world unto itself, presenting additional lucrative opportunities.<\/p>\n\n
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overview of primary tax resolution methods<\/h3>\n
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