Tax Practice News
Editor's Note: This article is from our new publication, Tax Practice News. A news source for the tax preparer; to help get your firm into good habits, efficient workflow procedures and help with the overall success of your firm. Subscribe to this weekly publication, here.
The rise of artificial intelligence (“AI”), the increased standard deduction, and the commoditization of 1040s has reduced the perceived value of the traditional tax practice. Add in the automation and AI assault on bookkeeping, and the accounting practice as we know it seems to be crumbling before our eyes. Last year 48% of taxpayers filed their own returns. With all of the above, by 2020 it is expected to be 75%.
The reality is that though traditional tax preparation and bookkeeping practices are going to shrink and possibly even vanish in the next 5-10 years, there is a growing need for tax professionals. The issue is that our tax practitioners need to elevate themselves and their practice and become consultants rather than mere scriveners sticking numbers in forms.
The decision in South Dakota v. Wayfair is just one example of the landscape expanding for consulting. Prior to the US Supreme Court decision, state and local tax planning was a thing big companies got from big law and International Accounting firms. No longer. Now, any small business selling on the internet will need to consider the various localities and the laws as to taxation of its sales, and how to deal with the compliance aspects as well as planning issues to try and minimize or even avoid the local sales taxes.
IRS Representation continues to explode, with few attorneys in the area. Currently there are more than 14.1 million taxpayer accounts in the IRS Collection Division inventory, with more than 7 million non-filers identified by the IRS to pursue in 2019. The need has never been higher for trained representatives to help save taxpayer’s financial lives, their business's futures, and make themselves much more money than they ever made knocking out 1040 returns. Why not seek additional training in this hot area? My Tax Rep coaching members have started charging $300, $350, even $400 an hour, and getting it from clients who desperately need help from the IRS collection efforts.
Enjoy bookkeeping and accounting? What about becoming a Certified Fraud Examiner (“CFE”)? The CFE’s we use on our criminal tax and bankruptcy cases charge upwards of $750 an hour! The need is huge: just ask some divorce and bankruptcy attorneys.
Interested in investing and money? Take the Certified Financial Planning (“CFP”) exam and become the actual advisor your clients probably wished you were.
My point is that the need for high-end consulting is huge, and there is significant money to be made, but you need to go and make it happen. I would urge you to put forth the time and effort to get the training you need, and elevate both your practice and yourself. The tax-paying public and your bank account will thank you for it!
Eric Green
Author Bio: Eric L. Green, Esq. is a partner in Green & Sklarz LLC, a boutique tax firm with offices in Connecticut and New York where his practice focuses on civil and criminal taxpayer representation before the Department of Justice Tax Division, Internal Revenue Service and state Departments of Revenue Services.. He is a frequent lecturer on tax topics for CCH, Intuit, the NAEA, the NATP, the ABA Tax Section and the Connecticut Society of CPAs. Attorney Green has served as adjunct faculty at the University of Connecticut School of Law. He is a columnist for CCH’s Journal of Practice & Procedure and Forbes. He is the founder of Tax Rep LLC, which is a coaching program for accountants and attorneys to build an IRS Representation Practice. He is heard weekly on the Tax Rep Network Podcast and is the author of The Accountant’s Guide to IRS Collection and The Accountant’s Guide to Resolving Tax Debts. Eric is Fellow of the American College of Tax Counsel, and is frequently quoted in the Wall Street Journal, USA Today, Consumer Reports, Market Watch and TheStreet.com.