Riding the new wave of IRS enforcement

Last year’s funding infusion for the IRS means that the agency has finally been properly funded. As a tax representation attorney and founder of Tax Rep Network, I warned this would unleash a tidal wave of tax representation work. Now we are beginning to see the impact as IRS notices are being sent to taxpayers. It’s bad news for clients, but it can mean good news for tax pros with this wave of enforcement bringing opportunities for representation work.

The IRS identified more than 11.3 million taxpayers who failed to file returns, and more than 15 million with back balances already owed. During spring 2020 when the pandemic hit, the IRS put all automated enforcement on hold. This helped to avoid making life more difficult for taxpayers already struggling, while also avoiding having issues responding when IRS workers moved to remote work and campuses were closed.

Then, in summer 2023, the IRS planned to send reminder notices—a Threat to Levy—in the hope that taxpayers with back balances would voluntarily contact them and make arrangements to settle the back balance. The plan had been to turn back on the automated enforcement for tax liens and tax levies after Labor Day to get back to business as normal.

Shortly after, Congress got involved, and we faced multiple potential government shutdowns. Congress ultimately negotiated to reduce the $80 billion of funding for the IRS over 10 years to only $69 billion. During this period of potential shutdowns, the IRS pushed the start of automated enforcement to summer 2024.

How tax pros can leverage increased IRS enforcement in 2024 and beyond

The IRS now states that it is better staffed; this summer, the agency expected automated levy and lien filings to commence once again, although it will be done over a number of months. What does this mean for tax pros who offer representation as part of their services—and those who may be considering it?

I cannot stress enough that the need for tax practitioners trained to provide representation services has never been higher. From increased scrutiny on S-Corps for reasonable compensation and various tax penalties—from payroll, sales taxes, and many others in between—to taxpayers who fell behind on their taxes prior to, or during, the pandemic, there are millions of tax representation cases pending. This is a golden opportunity to focus on this work in your practice right now.

I cannot stress enough that the need for tax practitioners trained to provide representation services has never been higher.

Potential clients are everywhere, so my top marketing advice to you is to make sure your clients and network are aware that you handle these matters. Many of the members of Tax Rep Network have generated upward of an extra $100,000 of revenue per year just by getting the word out to their network that they handle these matters. However, nobody can refer clients to you if they do not know you do this, so make sure they know!

Shore up your revenue from year-end through tax season

When you consider the sheer volume of taxpayers and businesses who are facing the music of IRS issues, it’s definitely the perfect time prior to tax season to get prepared to assist them. This will ensure that when you have clients or referrals for new clients coming to you, you’ll be able to shore up your revenue and be a genuine source of relief— and peace of mind as you help those who have fallen behind on their taxes or have other issues from which they need to work out a resolution with the IRS.