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You just filed your client’s income tax return and you receive an IRS (or state income tax) notice questioning an item or items on the just filed return. What do you do?
Think about it… every time you receive a notice from the IRS/state, after you’ve filed your client’s tax return, you’re faced with the two unpleasant choices:
- You either take the time, sit down, respond to the notice and invoice your client, over and above the tax prep fee or,
- You just do the work for free. Most of us just do the work for free because we think that the client thinks it’s included in the tax prep fee, and we're afraid we’ll lose the client if we invoice them.
The audit rate in the U.S. is .059%. To put that in perspective, there were 892,187 income tax (1040) audits on 150,043,227 returns filed in fiscal year 2018. The IRS doesn’t include certain notices, like CP2000’s in their audit statistics. There were nearly 3 million CP2000’s issued last year. There were also millions of other notices that went out questioning items of your client’s income tax returns.
An overwhelming majority of these are incorrect. The “real” audit rate is closer to 7% when you include all these “non-audit” notices. However, to your client, any notice from the IRS is an “audit.” To you, they represent extra work, preparing responses that you generally never bill for. This can add up to hundreds of non-billable hours during the year in a modest size tax firm. And -- these audit stats referenced above don’t include all of the “new” notices that are going to be generated in 2020 and beyond due to the Taxpayer First Act signed into law last year. Think QBI and Section 199A notices coming down the pike!
Or -- what do you do when your client has had their Tax ID (SSN) stolen? This happens when a fraudster files a fake return and absconds with a refund before you had a chance to file the “real” return. You then get a notice from the IRS that states they can’t process your clients return because there’s one already filed. How do you charge and get paid for this work?
I assume you don’t want to continue to do work for free. You know that if you wanted to increase your tax season income you would need to get new business which, let’s be honest, is time consuming, expensive and doesn’t always produce quality results. Not to mention, your plate is already full and you're crunched for time as it is.
But, what if there was a simple and effective strategy, that checked all the boxes, and gave your clients exactly what they wanted, which is peace of mind that you’ve got their back, and that you got paid for any and all of this post-filed work 100% of the time, without increasing you tax preparation fees?
Melinda Owens, an Indiana CPA, was responding to IRS/State tax notices on behalf of her tax preparation clients and not charging for this. She does about 500 income tax returns per season. She implemented my system in 2018 that generated $42,218 in additional tax season profit and enrolled 96% of her clients into this system. She did another $49,718 this past tax season, with the same system, that just ended 10/15/2019. That’s over $91,000 in found money. She LOVES tax season now!
Imagine you were able to generate, in addition to regular tax season income, tens of thousands of dollars for the 2020 tax season (and each one thereafter) without spending any money on advertising, without needing to add even one new client and without having to raise your fees. Sounds almost too good to be true, right?
On Thursday, November 7, 2019 I’m going live online and teaching a master class on how you can “plug” this System into your practice for the 2020 tax season. I’ve taught this exact system to over 1300 practitioners during the last two years. I have dozens and dozens of case studies that I’ll be sharing during this live webcast. Last year when I did a webcast on this topic, I had to buy additional bandwidth so that everyone could get on. Click here for more information about the training and how to register for the master class. I would encourage you to register now and to “show up” 10 minutes early on the November 7th.