A Quick Look at the American Tax Resolution Market for 2022

A Quick Look at the American Tax Resolution Market for 2022

2022 has just begun and tax season is ahead, but before you, as an accounting professional, shut off from the rest of the world to start working on tax returns, I would like to draw your attention to what should become next in your agenda once tax season (and your subsequent week off) are over: the tax relief market. Figures are attractive this year, and I am sure you will want to read the details.

Facts and figures

According to IRS Data Book, during 2020, Americans owed the IRS over 60 billion dollars (60,324,317,000, for those who like more precise figures, although you must know the official report is rounded to the thousands). The sum is about half of what was owed in 2019, but this does not mean that all previous years’ debt has been settled or fully paid. Tax professionals who already work in tax resolution know that many citizens owe several years’ of tax debt.

Add to this that demand for tax resolution services remains stable. A quick online market search shows that there were about 155,000 searches on Google directly related to tax resolution services during 2021; and other search engines would probably report similar figures.

The important figure, however, is that the number of indebted American citizens is estimated to be over 10 million. I failed to find any official statistic to support this claim, but Michael Rozbruch, a renown advocate for the tax resolution industry, mentioned that number last year in his podcast (source). Further, he added that he expected to see roughly 20 million collection cases by the end of 2021. Contrast that figure with the about 5,000 firms offering tax resolution services in the United States, and you will clearly notice there is a shortage of supply for the demand of tax relief services. This creates a golden opportunity to bring extra cash to your tax practice in a reasonably short future, provided that your practice starts offering tax resolution services this year onwards.

Usual Doubts

Tax professionals interested in entering the tax resolution industry usually ask the following:

  1. If any person who work with taxes can work in tax resolution. The answer is no. IRS will only pay attention to CPAs, Enrolled Agents and tax attorneys for this kind of cases, which means fewer competitors compared to, say, tax preparation services.
  2. If it is worth working with people who are indebted (also known as the “How could someone afford tax resolution if he or she can not pay their taxes?” question). Although I understand where your doubt comes from, that should not stop you. Any person will be more than happy to pay you what you ask for to get IRS off their back; especially in cases in which he just received a letter from Uncle Sam telling him about an intent to levy (or some other collection action).
  3. If he will need to invest a lot of money in advertising to start getting tax resolution clients. After all, some companies advertise on radio, and a few even on TV! Actually, no. You may already have many potential clients among all the people you prepare tax returns for. They already know you and trust you their tax returns, do they not? Why would they not trust you can help them with their tax debt problem?
  4. If you need any special training to to start in tax resolution. The answer is that, ideally, yes; but you may also start small with the help of a tax resolution software. More about that in a second.

Where to Get Training

Those interested to get tax resolution training usually have three places to begin:

…or a combination of them. I will not lie to you: there is a learning curve, but it is not very steep.

Delivering Results

The most important point about entering the tax resolution market is to deliver results (else, your career will be… mm… really short). Most specialists these days use a tax resolution software in their practice. It provides automation, and most importantly it helps to deliver results.

I suggest you to start with PitBullTax. It is a clear and very helpful software, not to mention its step-by-step workflow is just extraordinary. There are other options in the market for those willing to compare. The most renown are IRS Logics, IRS Solutions and Canopy.

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