Learn how to choose tax software solutions that increases revenue, reduces the amount of time you spend on each case and helps you stay on top of your workload. Year after year, tax season rolls around and with it comes less appreciative, more demanding, and more challenging clients. You hustle day in and day out to deliver quality service and achieve rapid turnarounds for each and every client, only to be nickel-and-dimed when it comes time for them to pay your (very reasonable) bill.
If tax preparation is your ‘bread and butter’, you know this narrative well. And if you know this narrative well, you probably would agree that it’s time for a rewrite… As long-time veterans of the industry, we impel you to think beyond cheap tax returns (that are becoming more and more of a commodity) and other unprofitable accounting services, and consider tax resolution. Adding tax resolution services to your wheelhouse is a way to generate more revenue year-round with a fraction of the effort and stress.
To run your tax resolution business successfully, you’ll need the right software. An effective software will come complete with intuitive automation for the repetitive, time-consuming tasks, as well as other resources designed to help you market and grow your business.
So how do you know which software is best for your tax practice?
When looking for the right tax software solutions, there are a number of factors to consider. In this guide, we’ll take a closer look at all of the features and resources you’ll need to set your tax resolution business up for success. But first, let’s discuss the processes involved in tax resolution and how they can generate major revenue for your business.
What is tax resolution?
Tax resolution (or tax relief service) involves working with your client and the IRS to resolve tax problems. Clients will often seek tax resolution help if they are being audited by the IRS and require assistance navigating the process; or if they’ve neglected to pay taxes for a number of years and need help getting back on track.
Examples of Tax Resolution Cases
Audit Representation
The IRS audits taxpayers for a number of reasons. This doesn’t always mean your client has done something wrong. It could mean your client submitted a complicated tax return that requires a more in-depth review, or there may be suspicion your client reported inaccurate details about their income or deductions.
As an audit representative, your job is to help your client navigate the audit process, create an audit defense and settle the audit on their behalf.
IRS Notice Response
The IRS isn’t perfect. Sometimes, mistakes are made. And as you know, taxpayers have the right to challenge the IRS. A case like this will involve representing your client, and building their case. The process will entail running a transcript analysis to look for inaccuracies in what the IRS is reporting versus what the taxpayer reported on their tax return, and responding to the notice with a call or a letter to the IRS.
Unfiled Returns
Another tax resolution service you can offer is helping a client get up to date on their unfiled returns. Your job will involve gathering their income information for however many years they are behind, requesting the IRS Wage and Income transcripts to verify what third parties, such as employers and banks, have reported to the IRS, and filing their returns to help them get back on track.
Tax Relief
When a client owes a great deal of back taxes and is unable to pay for them upfront, you can step in and help them avoid the onset of interest and penalties. This will involve making sure their IRS assessments are correct, advocating for reduced penalties, and developing a payment plan or installment agreement with the IRS that is manageable.
Some service options when your client is unable to pay their taxes up-front, including
- Installment Agreements
- Partial Payment Agreements
- Securing a Currently Not Collectible Status
- Penalty Abatement
- Offer in Compromise
- Innocent Spouse Relief
- Tax-related Identity Theft
Wage Garnishment Assistance
The IRS will go through great lengths to obtain the money they are owed. They’ll often garnish or levy wages, up to and including, your client’s entire paycheck. As a tax resolution professional, you can help by putting a reasonable payment plan together, negotiating with the IRS, and discontinuing any wage garnishments.
Bank Levy Assistance
The IRS has the authority to garnish or levy a taxpayers’ bank account. You can help your clients negotiate with the IRS to release the bank levy. This may entail filing unfiled tax returns or setting up a payment arrangement.
Notice of Federal Tax Lien
A NFTL, or Notice of Federal Tax Lien, can affect your client’s credit, and hinder their ability to refinance their home, sell their assets, or purchase vehicles in the future. You can assist in getting an NFTL released, having the Lien withdrawn, or secure a subordination or discharge of the Lien.
Revocation or Denial of Passport
If your client has “seriously delinquent debt”, the IRS may notify the State Department to not issue or to revoke your client’s passport. In these cases, a client may reach out to you for assistance in reversing these actions.
How Much Revenue Can Tax Resolution Bring In?
Did you know that adding tax resolution services to your business can increase your annual income by an average of $60,000? A single resolution client per month can generate an average of $5,000.
Tax resolution services can be very lucrative and can help tax professionals earn income all year round. You may be wondering how much you should charge for tax resolution services. Many tax professionals don’t advertise fees, simply because each case is unique and the answer is often dependent on the nuances of the case.
Depending on the work involved, tax resolution services can cost anywhere between $3,500 and $15,000. For businesses such as a C-Corp, S-Corp, or LLC, costs may increase, especially if they filed 940s or 941s. For complex tax resolution services, the fees can exceed $10,000.
There are several different payment structures that you can offer as a tax resolution firm. Many professionals offer flat fees, while some offer hourly or retainer fees.
- Total upfront fee or payment plan
Some tax resolution firms ask for the total upfront. Others choose to offer their clients a payment plan. - Partial payment upfront
Some firms ask for partial fees upfront(or a retainer), and the remainder of the fee to be made in monthly payments. - Monthly Payments Until the Case Concludes
Some firms charge a monthly fee or a retainer each month until the case is closed. There also may be an upfront fee when getting started. - Taking a percentage of the savings
Unlike tax preparation, with tax resolution, you can agree to be paid a percentage of tax savings or penalties abated. At just 10% of the savings, if you save them $50,000 you get $5,000. Just make sure to get the amount of likely savings in a retainer account or escrow account upfront. Many clients love and prefer this option because there is less risk for them. - Hourly Rate
Fees can range anywhere from $200 to $500 per hour.
The way you charge may vary from case to case.
Keep in mind, tax resolution cases may take months to resolve. It’s wise to come up with a payment plan that works for both you and your client.
Additionally, you don’t want to finish up the case and realize your client hasn’t paid you – especially if you’ve put in tons of work for several months. You’re a tax professional, not a collection agent, so whichever payment option you choose, be sure to collect all payments from the client before finishing up their case.
How to Choose Tax Software Solutions
CRM software is an important tool for any type of business, especially tax firms. You may already be using one or planning to get one. Whether you’ve been using an automated software and you’re ready to evaluate other options, or you’ve never even heard of such a thing, we’ll walk you through everything you need to know about choosing the right one for your business.
There are a lot of things to consider when choosing the right software for your business. Let’s explore all of the features and benefits of tax software solutions, so you can make the best decision.
Features to Look For in a Tax Resolution Tax Software Solutions
IRS Form Functionalities
It’s important to look for IRS form functionalities and ease of use when you choose a tax resolution software. If it doesn’t have this, it’s not worth getting. It’s essential to use software that assists you in finding the best possible outcome for your client.
Automated form functionalities and analysis tools allow you to instantly access all of the details regarding your client’s case from the IRS and understand what is needed to work on your client’s behalf. Make sure that you have the ability to switch from Form 433-A to Form 433-A(OIC) without needing to re-input any information.
Tax Forms
Whether it’s a simple or more complex tax resolution case, it’s important to have access to a wide array of federal forms. As a tax resolution specialist, you have to understand what forms are required to serve your clients. You should also make sure software offers Form 2848 – Power of Attorney, or Form 8821- Tax Information Authorization, especially if you aren’t an EA or CPA.
IRS Notices
One of the key parts of being successful as a tax resolution professional is to know how to respond to IRS notices. The software that you choose should provide knowledge and insight into what each notice means, as well as how to resolve the issue. This allows you to provide high-quality services for your client without having to spend a lot of extra time researching. You have to understand each notice and how to resolve it in order to be effective at your job.
Industry Education and Customer Support
Tax law and procedures constantly change and tax professionals are required to renew their license on an annual basis. It is very important that tax resolution professionals stay informed of updates and adjustments to tax code and regulations and stay on top of the requirements for their annual required continuing education.
Certain tax resolution softwares, like IRS Solutions, provide educational resources such as live classes with veterans of the industry that help them earn Continuing Professional Education (CPE) credits as part of the program.
Practice Management Tools
You should check that the software has task management and workflow tools. This can help you cut back on unnecessary busywork, so you can run your practice as profitable and efficient as possible, allowing you to spend more time on billable work and less time on repetitive tasks.
Full Report
Delivering high-quality service includes providing your client full visibility into what you’re working on for them behind the scenes. Tax resolution software can prepare a comprehensive report that shows all your work, all of the opportunities you’ve investigated, and their options on paper. With the right automation capabilities, your software will generate this report at the touch of a button, making it easy for clients to stay updated and for you to show your value.
Easy Installation
Installation is an important consideration. Certain software involves a more complex installation process, which can cost a great deal of money and time. Ideally, you should go with cloud-based software that is simple to install and implement.
Cloud-based software is designed for ease of use and enables you to quickly create an account and get started right away. It doesn’t require any time-consuming or confusing downloads, and you’ll be able to access and update your secure account from anywhere you go.
Hands-On Customer Support
Hands-on customer support is another key factor to consider when choosing a tax resolution software. You want to ensure that the software you select offers high-quality customer service, so you can focus on delivering the same for your clients.
Many popular, large-scale tax resolution software companies with thousands of customers in their network aren’t capable of providing hands-on customer support. Whether you’re first starting out with your tax resolution business or you are a seasoned veteran, it might serve you more to choose a tax resolution service designed for your type of business as they are more likely to offer the white-glove customer and tech support you need.
Automatic Updates
This is very important as tax laws and forms frequently change. Software that provides automatic updates can keep you in the know and keep your business current with newly revised tax forms. This is especially important for busy professionals that don’t have time to research and keep up with all new developments.
All-in-One System
The software you choose should take care of all of your business needs from marketing to automating your day-to-day to delivering excellent customer service to your clients. All-in-one tax resolution software makes it easy to keep all the pieces together and ensures that nothing falls through the cracks. For a busy professional, this is absolutely key to successfully and efficiently running your tax resolution business.
Ease of Use
The last thing you need as a busy professional is an added struggle of learning, managing, and stressing out over complex software. The point of implementing an automated tax resolution solution is to make your life easier and eliminate the busy work and headaches. That’s why it is key to look for a software solution that is easy to use, offers free training on the software, and works to boost efficiency.
Money-Back Guarantee
Only go with a software that stands behind their product. At a minimum, a 30-day refund should be offered. IRS Solutions provides a 60-day money-back guarantee with no questions asked.
Paperless Option
Your tax resolution software should remove the paperwork. Not only is this more efficient, it helps keep you organized, reduces manual errors and it’s environmentally friendly. You should make sure there are online tax forms, integrated emails, and e-Signatures as well as an ability for your client to upload their documents to the portal. This can save you and your customers a lot of time.
Steps for Starting Your Tax Resolution Business
Tax resolution firms work by providing services to taxpayers all year round to help them with issues stemming from the IRS. You don’t even have to be an Enrolled Agent or CPA to offer them. As long as your client is with you in the room or on the phone, you can communicate with the IRS. If you are an Enrolled Agent, CPA, or attorney, you can also get a Power of Attorney to act on your client’s behalf.
Onboard Your Client
The first step to the tax resolution process is onboarding new clients. Onboarding can be tricky and time-consuming. However, when you choose the right tax resolution software, like IRS Solutions, the onboarding process is simple and clear. You can easily brand your business and look more professional.
You can use the convenient client portal that allows clients to input their information themselves. IRS Solutions makes it easy to import any existing clients you already have. You can also provide handouts to clients with a detailed summary, possible options to offer, and more. This will show clients you take your work seriously and you value them as a customer.
Evaluate Your Client’s Situation
You’ll have a consultation with your client. During the meeting, you’ll get specific information on the client’s issue. You can then review the client’s paperwork, assess their situation, and start the process of devising a resolution strategy that works for them.
Come Up With a Resolution
If you believe you can resolve your client’s problem, you will need to secure an engagement letter, create a plan to work with the IRS, and develop an agreement or compromise that satisfies everyone. If your client is being audited, you can go through your client’s documents to get an idea of their situation before preparing a defense.
In the case of having to negotiate with the IRS, especially when it comes to avoiding levies and wage garnishment, you can help your client put together a payment plan that demonstrates to the IRS that the resolution desired is fair for both the IRS and the taxpayer. Having a solid plan and defense can keep your client from being overwhelmed with a high tax bill and penalties.
Act as the Go-Between for your Client and the IRS
Your client has the right to representation in front of the IRS. As their representative, you act as the go-between or mediator between them and the IRS. This means your client won’t have to worry about dealing with the IRS on their own.
It’s important to know your client’s rights and responsibilities to help make sure they aren’t taken advantage of and to help reduce your client’s stress. Having a software solution like IRS Solutions provides continuing education, access to professionals, and resources so you can learn about the tax resolution process and how to best represent your client.
IRS Solutions is Here to Help and Support You
IRS Solutions tax resolution software is designed to help tax professionals, attorneys, CPA’s and enrolled agents automate processes for solving collection cases. Users can easily input details on different tax forms including the Form 433 series, Form 656, and more. Furthermore, by utilizing the client portal you can easily gather and send documents. It has everything you need to run your tax resolution business!
IRS Solutions isn’t just a tax resolution software. We offer a built-in, comprehensive support system with a community of experts that are absolutely dedicated to your success – every step of the way.
You won’t just get software – you’ll be able to call us and consult with our former IRS revenue officers. You’ll be able to join our members-only Facebook group, where you have access to a peer network with which you can collaborate, acquire marketing tips, stay up to date on industry info, and more. Additionally, you can continue your education with our case study webinars and free CPE courses credits.
In Closing
Adding tax resolution to your portfolio of services as a tax professional is extremely rewarding. Not only can you make a huge difference in your clients’ lives, but you can add significant revenue to your practice while adding hours back into your workweek. Choosing the right software can help you get up and running quickly, and provide you with everything you need to make your tax resolution practice a success.
