Is Tax Resolution Still Profitable?

One of the most frequent questions I get asked is, “Michael, is tax resolution profitable?”

Let me answer that by telling you what's not profitable. What is not profitable is doing cheap tax returns and catering to the 1040 crowd or doing monthly accounting or payroll work – that's not profitable. Tax resolution was, is and always will be the most profitable practice area in the entire tax space.

Let me give you an example. Someone comes to you owing $100,000 to the IRS, has three years of unfiled returns, they are being levied by their employer. Do you know how much that case is worth to you? You know how much that client will pay to fix that problem? Over $10,000. But that is only possible if you have systems and processes in place, which I teach.

I teach you everything from A to Z on the “business” of tax resolution. The profits in tax resolution comes from two places. First, it is in the follow up. One third of your clients will retain you during your initial consultation or within a day or two, but two-thirds of them are going to retain you anywhere from 14-180 days after the initial consultation with you. If you do not follow up, you miss out on 67% of the clients you could have had.

Second, your profits are tied directly to how efficient you are at resolving cases. You can become wealthy; you can become rich helping people solve big IRS problems. And to do so, you have to have systems in place for the case to seamlessly move from one phase to the next.

Following up with prospects and being efficient at handing cases is why tax resolution is, was and always will be the most profitable area in the tax. Also, it will never be automated. No software will automate representing clients before the IRS. No software can replace you speaking directly to an appeal officer, revenue officer, revenue agent or a settlement officer. This is unlike a tax return which is easily automated, and soon your clients are going to be doing free tax returns directly with the IRS.

If your revenue stream is dependent on doing 1040s, you need to change direction because that business is dying out. It is burning to the ground. You need to replace that revenue stream. Why not replace it with (or at least learn about) the most lucrative area in the tax space?  If you are a CPA, an attorney, or an enrolled agent you can leverage your credentials and skill set to create wealth and help people at the same time.

With the IRS already getting large chunks of the $80 billion enforcement war chest, as authorized by the 2022 Inflation Reduction Act, tax resolution practitioners are already seeing a significant increase in collection cases which will continue for years to come.

Now is the time to get into the most profitable area in the tax space, tax resolution.

If you are ready to take the next step to learn more about how to have a lucrative tax resolution practice keep following the blog and our social media accounts. You can also register for a free training here called, “The 7-Figure Tax Resolution Practice Blueprint”.