Stories of great success in the tax resolution business. Listen to CPAs and Attorneys on how they have added additional revenue, some of them upwards of a million dollars, to their existing practices.
Stories of great success in the tax resolution business. Listen to CPAs and Attorneys on how they have added additional revenue, some of them upwards of a million dollars, to their existing practices.
Best Practice IRS Tax Lien Marketing with Christine Lacina of TaxLienLists.net
Christine and Michael go back all the way to 1998, when Michael was buying huge numbers of names from TaxLienLists.net. Christine started out in 1996 while working for a trucking company, where a friend shared the latest technological advance with her later known as the World Wide Web. One of the family members came up with the idea of collecting government records online, and this developed into a business selling that information to CPA’s, enrolled agents, and tax attorneys. In February, Christine will have been with the company for 21 years.
[7:00] Tax collection enforcement tends to swing back and forth like a pendulum, and it appears that we’re in another swing towards more enforcement with the IRS receiving an additional $200+ million in funding.
[8:40] In the late 90’s, the enforcement agents were a little overzealous. In many ways the IRS was ruining the lives of regular people because they got behind on their taxes. It was around that time that the IRS had to change their image and try to be a bit less intimidating. This change was groundbreaking for tax resolution businesses and that’s when Christine’s company really started to take off.
[12:40] Levies and liens are the two main drivers of clients to tax resolution businesses, so an increase in those means a lot of additional business for us. The IRS benefits immensely from tax resolution companies because they help collect on their behalf, which is one of the reasons that it’s such a good business to be in.
[16:00] There was a major decrease in lien filings starting in 2009, but even with that happening, Christine was still seeing plenty of successful tax resolution companies taking off.
[17:45] Federal tax liens for 2019 will likely be around half a million, similar to the last two years. Christine’s company has been able to combine the list of federal tax liens with the individual state’s tax liens, which has enabled tax resolution companies to market directly to those people. Marketing to state tax liens is a great way to get to the clients’ federal problem and get ahead of the competition. Marketing is about numbers: when the number of federal tax liens is low, go after the list of state tax liens too.
[20:00] A lien is public record, which is why federal tax liens can be compiled into a list, unlike levies which are not. There is no set standard for individual local courthouses where liens are filed. What this means is that Christine’s company has to be very flexible when collecting records.
[24:10] As a list broker, Christine collects the same information that the IRS has on file. Name, mailing address, the type of lien, and the dollar amount of the lien that was filed against them for that year. They always remind their clients that the information on the lists are just the tip of the iceberg and most people with a current lien against them owe more.
[27:30] The information Christine collects is really geared towards direct marketing, but there are companies that also use email to reach out to prospects. One thing to keep in mind is that you should expect to mail multiple times to get the best results from your marketing. If you do the mailing right with an accurate and fresh list, and a good mail piece, you should be able to get a 0.5% to 1% response rate.
[32:10] Part of the service includes a personalized letter containing the prospect’s information, as well as brochures, business cards, and other marketing pieces that you can add to the package. Christine breaks down the math on purchasing a list with 1000 names on it, where with a good closer most tax resolution companies should be able to close 50% of the people who call in to their business. The typical ROI for this kind of marketing is anywhere from 400% to 2000%.
[36:00] TaxLienLists.net services less than 55 customers nationwide and they have limited the number of cl
Predictions from the Godfather of Tax Resolution - Robert McKenzie
The godfather of tax resolution is the featured guest of the podcast today. Robert McKenzie is the guy that leading attorneys and CPAs turn to when they have criminal tax defense cases they need help with. Robert has a unique perspective into the IRS since he worked as a collections officer and literally wrote the book when it comes to representation before the IRS.
[4:15] Robert started his career as a revenue officer of the IRS. While working at the IRS, Robert completed his law school education and immediately went into his own practice doing tax resolution which he’s been practicing for the past 40 years.
[6:00] While at the IRS in 1976, Robert was incentivized to seize 30+ businesses and homes because that was how success was measured by the IRS before reforms were passed. Since 1998, the number of seizures has drastically decreased.
[9:15] In the last 8 years, the IRS has had its budget and headcount decimated, particularly in the enforcement area. This has lead to fewer enforcement actions and less revenue officers in total.
[13:00] This is a little counterproductive in terms of government revenue because a skilled revenue officer generates $11 in revenue for every $1 spent. Right now it’s a good time to be a tax cheat in this country because the odds of being caught have never been lower.
[13:50] The IRS received a 2.6% increase in budget in 2019 which means they can now bring on some new people. The new commissioner, Charles Rettig, is one of the first tax lawyers to get the job.
[17:35] Levies were up 8% in 2018, the first increase in over a decade. Robert believes that this indicates a trend of increased enforcement in the near future. The IRS is taking revenue officers from underutilized states and placing them in other areas that are lacking staffing to help go after higher dollar actions.
[21:00] The reality is the IRS has a lot of cases in queue that are just waiting to be assigned to someone in the field and they are not having liens filed. The more they can have people to receive cases out of the queue, the more liens we’re going to see.
[24:30] Sometimes it can be hard to change someone’s attitude if the IRS hasn’t started looking at their case. If you want to be delinquent in this country, you would want to live in a big city where the staff to enforce is at the lowest point. In Dallas, the IRS wasn’t going after anyone that owed less than a million dollars.
[27:50] There was a study released earlier in 2019 that shows about 83% of Americans comply with their taxes, but we are auditing 0.58% of all tax returns filed. They estimate that the government is losing over $300 billion in revenue from people not properly reporting their income.
[30:40] Over 43% of all the 1040 audits in 2019 were done on low dollar amounts returns. These were automated audits because auditing a high net worth individual requires a person to handle the task. Overall, 97% of people who are making over a million dollars a year will never see the IRS.
[33:40] Who cut the IRS budgets? Politicians. Who donates the most to politicians? Rich people. Who has the most to benefit by an IRS that’s not properly funded? Rich people. They cheat more and have more money they could be forced to pay if they were ever audited.
[34:10] The IRS has been engaging in a series of summons with the clearing houses that deal with cryptocurrencies and have been looking more closely at people making those transactions. For some people, that could mean potential criminal prosecution if the numbers are large enough.
[37:30] The statute defining an employee at the federal level has been established since the 1970’s. Congress is not likely to pass legislation dealing with the gig economy similar to the one recently passed in California, since industries have varying definitions as to who qualifies as an employee.
[41:45] Customer serv
Tax Season Found Money with Jeffrey Schneider
Jeffrey Schneider has a tax and accounting service, but he also has a separate company that helps taxpayers with tax resolution and solving their IRS problems.
[3:40] When Michael presented the Audit Protection Plan, the first thing that Jeffrey thought was “free money.”
[4:30] Michael originally got into the tax audit protection business when he was running his tax resolution business. He was running a separate business of his own selling audit protection plans that generated over $9 million in revenue over three years. It was an opt-in plan at first.
[5:30] In an opt-in plan, you have to choose to take the option to join the program. With an opt-out plan, you are telling the client they are enrolled and they have to choose to opt out. The way that Jeffrey structures his audit protection is opt-out.
[6:45] Since implementing the plan in 2017, Jeffrey offers the plan to every single client but his practice is a bit atypical. About 80% of the people that turned it down were over the age of 75. He still has a very high acceptance rate for his clients and the program has generated over five figures every single year so far. The retention for the program has been over 96%.
[9:40] Jeffrey made more money this tax season than in the past because of two factors. The first is that he has raised his fees across the board and the second is that many of his clients are self employed in some form and those clients are automatically enrolled in the Gold plan.
[10:50] The Audit Protection Plan covers three major things: responding to notices after you file the return, audit representation in the event of a full-blown audit, and tax identity theft. It’s also customizable and has three tiers of membership.
[13:40] When Jeffrey sends out the engagement letter, he includes a nicely designed brochure that explains the plan and conveys its benefits. He positions it as a cheap insurance plan. The brochure is also present in his waiting room and conference room so new clients always see it. Since it’s automatically included on the invoice, he has had an average 90% acceptance rate.
[15:50] The Audit Protection Plan system includes all the documents you need to implement the plan in your tax resolution business.
[17:25] You’re charging them on the invoice but it’s not mandatory. If they opt out, the charge is removed. People make mistakes, and the plan is an easy way for your clients to protect themselves from small but costly errors. The plan is also easily adjusted to whatever your existing fees are. The more you charge for your services, the more you can charge for the Audit Protection Plan.
[22:45] For the first two years, Jeffrey kept the plan priced at exactly what Michael recommended, but he raised his prices until people complained. The value of the plan still far exceeds the expense for the client.
[24:00] You make so much more money by having the plan in place than not having the plan and then charging people separately. Before the plan, Jeffrey would often work for free providing similar services but he tracked his accounts very carefully. The costs involved in handling the services were not even close to the amount of revenue generated by offering the protection plan.
[27:15] You are not splitting the proceeds of the plan with anyone, unlike many out of the box tax software programs.
[28:05] Jeffrey is going to make about $12,000 net revenue off the 110 tax returns he will do this year. Imagine how much you could make if you had a business that processed 200 or 300 tax returns.
[30:30] Jeffrey’s Gold plan includes a couple of extra features beyond what Michael recommends, including additional schedules and expedited response times.
[31:30] The people who don’t want the plan are required to sign a client disclosure form that explains they will pay the hourly rate for any work done outside the scope of the r
Building a Remote Tax Resolution Business with Ben Golden
Ben Golden lives in Thomasville, Alabama, which is a town of only 1800 people. He sold his practice in Florida five years ago and purchased a construction company, but he wanted to get back into the business, just not the compliance side. He saw Michael’s program, but had some major concerns about living in a rural area.
[4:00] Ben’s original practice did the things that a traditional accounting firm would do other than auditing. Buying the construction company was a lucky move for Ben but he couldn’t get away from his love of helping people with their taxes, he just wanted to get out of the compliance game.
[5:45] When Ben got out of college he worked for a regional firm in San Francisco for a few years before moving back to Alabama and buying his first accounting practice. He grew that business pretty quickly, but the trouble came when he agreed to sign a client’s payroll account.
[6:50] The client didn’t pay his payroll taxes and the agent at the IRS failed to follow procedures correctly and started chasing Ben to cover the $170,000 in taxes the client owed. Ben looked into the procedures and learned that she had acted inappropriately, which led him to push back on the IRS and speak to the agent’s territory manager.
[10:00] The final result was that the agent was pulled off the case and given a 30-day suspension. The client subsequently went out of business and only paid $35,000 of the total amount. Ben didn’t have to pay anything that he was originally assessed for.
[11:30] If we see something that’s not fair, we stand up and fight. What the IRS tried to do to Ben was criminal and is an example of what makes tax resolution and IRS representation so important.
[12:20] The IRS essentially violated all of Ben’s privacy rights, which is why he was compelled to pursue the issue. Ben has also had experience having his tax identity stolen a few years prior.
[15:00] When Ben purchased the Tax Domination system, he wanted to plan and set his company up for the greatest amount of success he could. He studied the material in the program for several months before even starting his business.
[17:40] Ben landed his first client at the end of 2017 and it was a $25,000 case. That first client proved to Ben that he could make some real money in this business while also helping people who really needed it.
[19:30] This past August was Ben’s biggest month ever with over $100,000 in revenue. He projects that he will generate about $300,000 by the end of his second full year in business. Ben operates completely remotely so all communication with clients is done over the internet.
[20:50] Ben has been focused on the lessons in the Tax Resolution system and implementing them the same way as Michael said to do, with some minor modifications due to the nature of the remote work. For Ben, the number one thing is to take a proven strategy and replicate it.
[23:00] As an enrolled agent or a CPA, you don’t have to be licensed in all 50 states to operate all over the country. You just have to be in good standing in your home state. Ben currently has clients in Hawaii, California, and Alaska. The key is to have a good plan on how you want clients to come in.
[24:00] Pricing is very important, it should be done in a way that you show the value of what you do instead of billing per hour. The fee schedule is a major asset.
[26:30] Communication and setting expectations correctly are crucial to a positive customer experience, even if you can’t get that customer the greatest result. Clients feeling abandoned is a common problem in the industry. You need to communicate with your clients, especially when there is nothing going on with their case.
[28:30] Locate your bottlenecks and do your best to clear them away. Do your best to teach every client that you work with that you work hard for them. Being a specialized techni
Solve Tax Problems If You Want To Build a Big Tax Resolution Business with Chris Micklatcher
Chris Micklatcher started off as a lawyer in Portland, Maine, focusing on estate planning and tax work. The transition to tax resolution came 30 years ago when a client came into his office that needed some help with his back taxes. Back then, it was very easy to find new clients, but now the market for the business has completely changed.
[5:40] There are around 3,300 counties in the United States, and for some of them, when the IRS files a tax lien, you will be able to find that info on their website. You can also buy a list from a list broker of federal tax liens.
[6:55] Chris met Michael and signed up to his Tax Domination program in Orlando. Prior to that, Chris did tax resolution work in addition to general law work, but it wasn’t a focus of the business. He wanted to do something he loved, and he found that people really appreciated the tax resolution service, which is very different from the experience of working with law clients.
[8:30] The tax resolution side of Chris’s business was around $5000 a month. After purchasing the Tax Domination program and coming into the mastermind group his tax resolution business has grown to $55,000 a month with additional deferred revenue each month as well.
[12:00] Chris has hired four employees to help with the workload and is now hoping to start retiring slowly, minimizing his work schedule over time. His team handles approximately $850,000 in yearly revenue.
[14:55] The first major lesson that Chris learned was putting the processes in place and understanding the value of his time. Before the program Chris never spent any time on marketing, he did most of that on the fly. Now he spends a minimum of half a day a week focusing on marketing and trying to think outside the box. Eliminating the deadwood in both clients and employees was the third major lesson. The concept of Chris’s employees selling his business for him changed the way he thought about hiring.
[16:45] When people call your office off of your marketing, the first impression they have is the person who answers the phone, and most practitioners don’t give that enough thought. Your front office people have to be very good. There is a big difference between a receptionist and an intake person.
[18:15] Non-Filers are some of the most common clients that Michael has been seeing, mainly due to the focus of his marketing efforts.
[20:35] This is the first time in seven years that the IRS has gotten over $300 million added to their budget from Congress. The pendulum is swinging back now to compliance enforcement.
[23:25] If Michael had to do it all over again, he would have set aside one day a week to plan his marketing strategy out. You also have to understand that you will be overloaded with business, so you need to be able to complete the business that comes into your office.
[24:30] Many practitioners believe that marketing is below them, and that once they open up shop, they deserve the business. For Michael, the problem was never marketing, it was delegating the work to an employee. The key thing is being able to hire the right people and being able to delegate in confidence.
[26:15] You want to put yourself out there as a tax resolution expert because everyone thinks an accountant is a tax resolution expert as well, but that usually leads to a bad experience for the customer. There are three distinct areas of taxes: tax planning, tax preparation, and tax resolution. You can do all three, but the way you present your business matters.
[27:45] You need to brand yourself because it will put you into a position of authority. Tax resolution in the only field of taxes where you are solving a big problem which is why it’s the most lucrative and profitable. Resolution is here to stay whereas planning and preparation are slowly being automated and commoditized.
[30:15] You can succeed as long as you like
The Five Major Lessons That Grew Elite Tax Relief 10x with Ken Mullinax
Ken Mullinax had always wanted to have his own business but was a bit of a late bloomer. He started going to college full-time while he was working full-time in his late 30’s and got his degree in accounting. His first step was to leave his factory job and become a revenue officer with the IRS. In many ways, working for the IRS was Ken’s best job and where he learned about collections and resolution.
[4:45] Ken left the IRS in 2014 to pursue tax resolution work with his wife Sandra. They worked through a national tax resolution company, but eventually that work dried up as the company was sold. It was around that time that Ken saw Michael’s ad for the Tax Resolution Training System.
[7:45] Most of the work Ken did at the IRS was with businesses. These experiences gave Ken valuable lessons that he now uses to help his current clients.
[11:50] There is no such thing as a hopeless IRS case. There is always something that can be done to help. Most CPA’s don’t know how to handle clients that are non-compliant.
[12:50] It doesn’t matter whether you owe the IRS $10,000 or $10 million; all that matters is what you can pay. Most of Ken’s clients pay nothing or very little. There are always ways to get the IRS to take the lowest dollar amount.
[14:15] There are 13.2 million people in the US that owe over $300 billion in taxes, and there is more work to go around than any one person can handle. The tax resolution industry is like a brotherhood with people who are more than happy to help each other.
[16:20] In Ken’s first year, he made about $90,000. At this point, a slow month is somewhere around $20,000, and Ken anticipates doing $60,000+ each month.
[18:55] Referral marketing is one of the biggest strategies that has made a huge difference to Ken’s business. The same CPA’s that Ken used to beat up when working for the IRS are the ones that now refer the majority of Ken’s cases.
[22:00] The next biggest lesson is learning what the service is worth. Ken initially doubted they could charge the prices listed in Michael’s course, but he took the leap and started raising their prices. Now they get paid more than they would have ever believed before. These people are in trouble, and they will pay you whatever they have to pay to get out of that trouble.
[27:00] Ken hasn’t had to deal with non-payment from clients yet, even once their case is closed. Pretty much everyone has money, and when they’re in a desperate situation, they will figure out a way to find the money and deal with their tax problem.
[28:30] The third major lesson is to not fear the marketing spend. You can determine how much you need to spend to land a client, and once you’ve got that number, it’s just a matter of investing the money. Most professionals don’t have a predictable system to generate clients, which is why they rely on hope. The practitioners who know those numbers are the ones who are the most successful and profitable.
[31:50] Each marketing channel works in different degrees. Sometimes they work for a while and then start to fade. So you have to change the message. Mailing prospects more than once is crucial.
[33:40] Effective hiring and networking are two more pro tips from the growth of Ken’s business. Now that Ken has an established reputation, the value of the networking has increased drastically.
[35:55] You need to have mentors in your life that can help you if you’re dabbling in tax resolution. All the resources that Michael provides are extremely valuable and will give you a huge boost in growing your practice. Social media posts have been Ken’s favorite thing he started doing in 2019.
[41:00] Ken recently made a funnel that captures names and emails using Clickfunnels and introduced his first video sales letter that has been performing very well.
[43:30] The main motivation for leaving the IRS was
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