As a CPA, you are in a unique position to offer valuable tax resolution services to your clients. However, you may be wondering if you need to hold additional credentials, such as an Enrolled Agent (EA) or attorney, to represent your clients with the IRS. The truth is, while having additional credentials can be beneficial, it is not always necessary.
The IRS allows CPAs, along with other tax professionals, to represent their clients in certain tax matters. The key is to understand your limitations and what you are allowed to do on behalf of your clients. For example, as a CPA, you can represent clients in audits, appeals, and collection proceedings before the IRS, but you may not be able to represent them in tax court.
To effectively offer tax resolution services to your clients, it’s important to stay up to date on the latest IRS regulations and procedures. Additionally, building a strong network of tax professionals with different areas of expertise, such as attorneys or EAs, can be beneficial for your clients and your business. By providing comprehensive tax resolution services, you can differentiate yourself from competitors and attract clients who need your expertise.
3 Types of Tax Professionals
There are three main types of tax professionals offering services on the market.
An Unenrolled Return Preparer is anyone who prepares a tax return for money. Some states require licenses to charge for tax preparation work, but there are many uncredentialed tax preparers on the market who have been representing their clients for many years.
A Certified Public Accountant (CPA) is licensed by the state to do multiple accounting tasks, up to and including tax preparation. You don’t need an accounting degree to become a CPA, but most states require you to have completed 150 credit hours at an accredited college or university before you sit for the exam. You may also need to have two years of public accounting experience to get your license. But none of that has much to do with tax services, and many CPAs work in accounting roles that have nothing to do with individual tax preparation or resolution.
An Enrolled Agent (EA) is a tax preparer who is federally licensed by the IRS with unlimited rights when representing a client. To become an EA, you must pass a comprehensive three-part exam on the tax code or have worked at the IRS for five years interpreting and applying the tax code as part of your job.
Who Can Represent a Client to the IRS?
The client can authorize anyone to help them when meeting with the IRS. That means, even as an Unenrolled Return Preparer, you can provide all the tax resolution help your client needs. You can negotiate installment agreements, set up an IRS Offer in Compromise, or even do the paperwork to prove your client has a Currently Not Collectable status, as long as your client is with you when you call to speak to the IRS and authorizes you to negotiate on their behalf.
Having credentials allows you to do all of that work for your clients without them having to be present. As a CPA or EA, you can shield your clients from speaking to the IRS, make sure all communications are filtered through you, and you can even sign forms for your client. In short, you can keep your clients from having to spend their time on long, drawn-out calls and negotiations with the IRS.
Does Having Credentials Change What I Can Charge?
While tax preparation is often subject to a flat fee or hourly billing rate, billing for tax resolution services is value-based. That means you charge based on your worth to your clients, not necessarily based on the credentials you hold. All you need to do to build your practice is to build your confidence in what you do. Be proactive, focus on creating professional relationships, and use all the tools at your disposal to show your clients how knowledgeable you are.
How IRS Solutions Can Help
The IRS Solutions™ Software can educate and guide you in filing all the paperwork you’ll need to best represent your client. The tax resolution software analyzes your clients’ IRS transcripts and provides a step-by-step process to find the best result for your client. IRS Solutions also provides a portal that allows the client to help you enter the data you’ll need to make the process seamless.
If you’re still unsure what to charge for this service or if you’re worried about marketing tax resolution services to your clients, just check out our FREE Tax Resolution Pricing & Marketing Survival Guide. IRS Solutions Software is available in affordable monthly and annual subscriptions so you can serve your clients year-round by providing tax resolution services with confidence. With IRS Solutions Software, members gain access to incredible features AND informative monthly Case Study Webinars conducted by a tax resolution specialist on the 4th Thursday of Every Month from 10am-11am PDT.
