The coronavirus has taken a toll. And while we still don’t fully understand how far-reaching the economic impact of this past year will be in the U.S., the impacts are already being felt. Unemployment, real estate forbearance, medical bills, job changes—compounded by the stress of everyday, socially distanced living—the very last thing taxpayers want to think about is the looming tax season.
Which is exactly why tax professionals need to prepare on their behalf.
Today’s article discusses How to Succeed as a Tax Resolution Professional in 2021 and how IRS Solutions can help with IRS forms and processes. We’re also reviewing the most common IRS repayment options so you can come to the table fully equipped and ready to help.
How to Prepare Your Tax Resolution Business
With all that people have been asked to deal with this year, you may find that many of your clients are too overwhelmed to face filing their taxes. You can mitigate that risk by reaching out to your clients now to remind them to prepare early and let them know how you can help.
With just a few steps, you can make sure you’re ready to help guide your clients through their tax resolution issues.
- Locate your CAF number. This nine-digit number is assigned to you the first time you file a third-party authorization and can be used for all future authorizations.
- Learn about tax resolution credentials. Did you know that the client can actually authorize anyone to help them when meeting with the IRS? If you’re an Enrolled Agent, CPA, or Attorney you can represent your clients without your client in the room but even if you are not credentialed, you can still help your clients in the best way possible. IRS Solutions offers monthly classes to assist you in learning to be the best you can be. Check out this article which details what certifications are needed to practice tax resolution.
- Do your research. Make sure you’re up to date on all the latest IRS programs and updates, especially when it comes to repayment items.
What You Need to Know
Understanding the most common IRS repayment options can help you negotiate on behalf of your client, so that they can come back into compliance without paying more than they can afford. And using a tax resolution accounting software like IRS Solutions can make it easy to figure out which option is the best for your client.
- Currently Not Collectible (CNC). If you can prove your client doesn’t have the money to even make payments on their tax debt, you can file the forms to have the debt put on hold.
EA Drew Foster, co-founder of IRS Solutions Software, says this option may be available to more clients this year, because so many people have filed for unemployment. “When you’re on unemployment, usually you can barely pay your bills. You don’t have the extra money to pay the IRS.”
- Offer in Compromise (OIC). Using form 433-A in conjunction with form 656, you can make an offer to settle your client’s debt for less than they owe.
There are a few different approaches for submitting an OIC. This is a good solution for some because it allows them to pay less than the full amount on their tax debt while still making good on a portion of the money that they owe to the IRS. Sometimes the amount paid back can be much less.
- Installment Agreement (IA). If your client doesn’t qualify for the two previous options, you can use form 9465 to set up installment payments on the debt.
You may have clients asking about the IRS Fresh Start Relief Program, sometimes referred to as the Fresh Start Initiative. This program was started in 2011 to help taxpayers get out from under their tax debt using installment agreements. But the IRS released some important updates in 2020 during the Covid-19 shutdown, allowing easier repayment terms for people who owe between $50,000 and $250,000 using a streamlined installment agreement (NSIA), which takes the place of the 2017 expanded installment agreement (EIA).
- Bankruptcy. This is usually a last resort, because as EA and IRS Solutions co-founder David Stone says, “Bankruptcy takes a lot of planning.” But if there’s no other option that fits, your client may need to declare bankruptcy to get out from under the debt. Chapter 13 or Chapter 7 is the most common.
How IRS Solutions Can Help
IRS Solutions tax resolution software does the work for you. It allows you to enter your client’s data once and then it lays out your best options. The software will also auto-fill the IRS tax forms and deliver them through our secure portal, saving you tremendous time and freeing you from the mountains of paperwork typically involved in tax resolution.
If you’re still on the fence, check out our Tax Resolution Calculator to determine how much you could boost your annual income by offering tax resolution services to your clients. Plus, as a member, you’ll have access to our incredible Marketing Toolbox, complete with social media posts, captions, ready-made networking letters, invoice stuffers, email templates, handouts and so much more to promote your new services.
Sign up today and gain access to so many incredible features PLUS informative monthly Case Study Webinars conducted by a tax resolution specialist on the 4th Thursday of Every Month from 10am-11am PDT. IRS Solutions Software is available in affordable monthly and annual subscriptions so you can provide tax resolution services with confidence and serve your clients year-round.