Using Federal Tax Lien Leads To Get New Clients

Ever since the launch of this web site, I have had telephone and email conversations with literally hundreds of tax professionals – CPAs, Enrolled Agents, and tax attorneys – and by far the single most common question I am asked is this: How do I use Federal tax lien data for finding new clients?

Since this question comes up so frequently (literally several times every single day), I have put together this marketing tutorial to show you how to use tax lien leads for obtaining new clients.

The Big Picture Idea

There are a couple of core concepts I want to cover before we get into the nitty-gritty how to portion of this tutorial.

First, as a tax practitioner (or any professional service provider, for that matter), you need to realize one very important, fundamental concept: You are a CPA, tax attorney, or Enrolled Agent SECOND, and a sales and marketing professional FIRST. This is a very radical concept to most people, no matter what their line of work. But the bottom line reality is that if you are in a small firm or in private practice, then you need CLIENTS in order to pay the rent and put food on the table. In order to get clients, you have to do marketing (word of mouth and referrals are still “doing marketing”) and be a salesperson. You may call it an “initial consultation”, but in reality that initial consultation is your opportunity to show a prospective client why they should retain your services instead of somebody else’s, otherwise you don’t make a living. Because of that, you ARE a sales professional, whether you think of yourself as one or not.

Core concept number two is really just a corollary to the first one: If you want current clients to keep coming back and want to grow your practice with new clients, then you must market yourself — there is no way around this. Zero. Zilch. None. You HAVE to engage in marketing. You may not think you have to, but trust me: Telling your friends and family that you are looking for new tax clients *is* marketing in it’s most basic form. Putting a coupon in the Money Mailer envelope during tax season is marketing. Sending “thank you” cards to your past clients is marketing.

There are a gazillion ways to market your tax practice to get new clients, and in the future we will cover more of that sort of stuff on this blog, actually, so come back regularly to look for new articles on marketing your practice. For the rest of this post, however, I’m going to focus on the two major things you can do with Federal tax lien data to find new clients.

What Services You Can Offer Tax Debtors

Along with the question of how to market using tax liens, we also often get asked WHY you would want to market your services to tax debtors. Here are just a few of the services you can offer these people and businesses:

  • Collections representation services — the most commonly thought of service to offer tax debtors
  • Tax return preparation — most folks with a tax lien also have, on average, 3 years worth of missing 1040 or 941s
  • Payroll services — businesses with 941 liabilities most definitely need a payroll service provider!
  • Bookkeeping — most businesses with tax debt don’t keep very good books, which tends to aggravate their tax issues
  • Accounting — the majority of small businesses with tax debt cannot produce a P&L or balance sheet to a Revenue Officer when required to do so
  • QuickBooks setup — getting set up on Quickbooks could help these businesses a LOT, and the IRS is more and more often demanding Quickbooks backup files as part of their collections investigations
  • Bankruptcy representation — Individuals and businesses with massive tax liabilities probably have other creditors they can’t pay also, and bankruptcy may be an option for some of them to consider

These are just a few examples off the top of my head — I’m sure there are more.

Now, let’s look at HOW to use tax lien data for marketing.

Direct Mail

When you purchase tax lien leads from us, you receive as much detail as we can provide. This will generally include:

  • Business or Individual name
  • Full mailing address
  • Lien filing date
  • Lien amount
  • Tax type

Because our entire system is built around the concept of getting you Federal tax lien data as soon as it is filed, we DO NOT wait for full processing and posting of the IRS Form 668(Y) image by the particular county or state the lien is filed in. A lot of times, we obtain tax lien data in a preliminary first-post format by the recording government entity. Because of this, we can’t always obtain the tax type, lien amount, or even the full street address for a lien.

As such, when you purchase leads that include the full address, you can use those for direct mail campaigns. The address we provide is the last known address of the person or business when the lien was filed.

Direct mail consists of anything you can send to somebody’s address. This includes flyers, coupons, letters, postcards, Priority Mail packages, boxes, etc. For purposes of getting tax clients, the two most common items of direct mail are a standard letter in a #10 business envelope and the good old fashioned postcard.

When sending letters in envelopes, you can increase the number of those letters that get opened by doing a couple things. One is to hand write the address on the envelope — this will increase open rates dramatically. The other good idea is to send what is called “lumpy mail” — put something in the envelope that makes it bulge. Common examples are marketing specialties such as pens, keychains, pocket ice scrapers, refrigerator magnets with local sports team schedules, hard candy, etc.

The content of a letter should, in general, point out a problem (having a tax lien filed against you is generally a problem!), explain how you can help fix it, and then tell the reader what action you want them to take. This last part is the piece that most people miss: They fail to ask for prospect’s business. Whether in print, over the phone, or face to face, more sales are lost because the business is never asked for than any other reason.

In letters and postcards, it’s a good idea to use an attention-grabbing headline at the top of the letter that gets the attention of the reader. It’s important that you realize the purpose of the headline, also, which is not to sell them anything, but to get them to KEEP READING. That’s the sole purpose of a headline.

Another best practice is to never send just one mailing. Sequential mailings consisting of three to twelve messages work best. Choose tax liens that fit your ideal client profile, and mail to them in a recurring sequence. This is the single best way to improve your overall response rate when mailing to a cold list.

I personally like postcards over letters for initial contact for a number of reasons. First, the message is right there — you don’t have to do anything to get them to open it. Second, postcards are usually half to one-third the price of sending letters, so you can send more of them for the same budget.

A quick word about response rates. In the direct mail world, obtaining a 1% response rate is considered good, and a 2% response rate is considered awesome. For our purposes, a response would generally be a phone call back to you or a visit to your web site (which is much more difficult to measure). While these numbers seem low to some people, they’re what you need to expect for a good mailing piece to a targeted list (which tax liens are quite targeted). I only point this out so that you do not become disappointed with the results you see, but rather know ahead of time what you should expect. Even one half of one percent is acceptable, particularly when large fees are involved, such as in 1120/1065 preparation, full service accounting retainers, bankruptcy representation fees, and tax resolution service fees.


The large, nation-wide tax resolution firms tend to obtain their clients either through massive TV and radio advertising expenditures, or through telemarketing. Telemarketing is a tested and proven method for generating tax clients, particularly in the tax problem resolution side of things.

Telemarketing, despite it’s reputation and the fact that most people despise it at some level, offers numerous advantages over other forms of marketing. First of all, telemarketing can be extremely cost effective. You can hire an assistant to make calls for you to offer consultations for $8 per hour, and that person can easily dial 50 people per hour. Reaching 50 people by sending letters at 44 cents in postage each, will cost you $22, plus the cost of paper, ink or toner, and the time to fold, insert, address, stamp, send.

Second, telemarketing is the single most direct way to reach out to somebody. Most people are conditioned to answer the phone whenever it rings, and many of the businesses that you call will have somebody there who actually gets paid to answer the phone, it’s simply part of (or entirely) their job. Because of this, the telephone provides a direct connection to the person you need to speak to — the decision maker that can sign your service agreement and write you a retainer check. This direct access is ONLY possible via the telephone and physically walking in — no other form of marketing gives you this. Email, mail, FedEx, newspaper advertising, radio, TV, etc., are all highly effective media for reaching prospects, but the telephone gives you direct and immediate access to the person you need to discuss your solution to their problem with at the very first pass.

Third, despite the general negative attitude in our society towards the practice of telemarketing, the fact of the matter is that it is still one of the most highly effective forms of marketing that exists. There is only one explanation as to why politicians purposefully excluded themselves from the rules of the Do Not Call list: Because telemarketing gets them votes and campaign contributions. Telemarketing raises billions of dollars in campaign contributions around the nation every two years, and raises even more billions of dollars in non-profit funding every year, as well. They do it simply because it works.

It’s the same reason that many large tax resolution firms rely on telemarketing to the exclusion of all other forms of marketing: Because it generates literally tens of millions of dollars in new client service fees nationwide every month. Yes, TENS of MILLIONS of dollars monthly, just for tax liability resolution services. I have no idea what level the number reaches for return preparation, payroll services, accounting, bankruptcy, and other related services, but it’s definitely more.

There are a number of different ways to go about setting up a telemarketing system for your services. First, be sure that when you purchase leads from us that you enable the option to include phone numbers in your selection criteria. This will give you leads that match all your other search criteria, but include only those that we have a phone number available for. Phone numbers are not available for all liens. You can obtain liens without phone numbers, and run them through a third-party phone append service if you would like.

Some tax practitioners will call leads themselves, while others will have either another member of their staff, such as an assistant, make the calls, or even hire one or more people specifically for that job. You can pay telemarketers a straight hourly wage, purely commission, or some combination of the two. You can find independent contractors in most cities that are professional appointment setters that work from home, or you can hire them as employees or temps that work from your office. You can even hire a call center company that will do the telemarketing for you (just do a Google search for this service if you’re interested). How you do this is really dependent on what you are comfortable with, what your budget is like, and how much free time you have.

What is your telemarketer offering over the phone? Your telemarketers should never offer licensed representation services — this is a violation of IRS regulations if they are not licensed themselves. Just as in direct mail marketing, always offer your prospects some sort of “widget”. What I would actually encourage you to offer is something like a special report, a book, an invitation to free seminar or webinar, or something of that nature. You will drastically increase response, and have a better pool of qualified prospects to work with. Remember that the real goal of your direct mail, telemarketing, and other lead generation efforts is exactly that: To convert a raw list of tax liens (referred to in marketing as a “cold list”) into leads. That’s the sole goal of lead generation marketing, aka “prospecting”.

A basic phone call might go like this: “Hello, my name is ____ calling from ______. The reason for my call is that we recently received notice that a Federal tax lien had been filed against you/your business, and I’m just calling to offer a free ________ (special report about removing tax liens, webinar on resolving IRS problems, etc.).

A word about the Telemarketing Sales Rule, the Do Not Call List, and IRS solicitation rules: Be sure to discuss with your attorney what you plan to do with telemarketing so that you don’t run afoul of the TSR, the DNC, the FTC, the IRS, and other acronyms. We are not lawyers, and cannot provide legal advice in this arena. Based on my own research into this, here is my current understanding of some of the general rules:

  1. If you are calling individuals, you must scrub your telephone numbers against the Do Not Call list. You must obtain a SAN number from in order to do this, and it does require a fee. Please note that it is ILLEGAL for us to use our SAN number to scrub the DNC for you — you MUST get your own.
  2. The FTC recently made changes to the Telemarketing Sales Rule regarding collection of fees for debt resolution services offered to consumers. At the current time, the FTC is saying that tax resolution services are subject to that rule, but as of the time of this being written there is a temporary exclusion of tax resolution from this new rule. It is my understanding that other accounting services are not subject to that rule, but again, check with your attorney on this one
  3. It is my understanding that these regulations don’t apply when you’re calling businesses, but again, check with your lawyer on it just to be sure.
  4. It is also your responsibility to comply with Circular 230 and IRS Revenue Procedure 81-38, Section 8, which bars the telephone solicitation of licensed representation services by unlicensed people.

Let me emphasize that last point: Unlicensed telemarketers should never solicit licensed services over the telephone — it is a direct violation of Federal regulations. If they get somebody on the phone that wants a consultation right there on the phone, that call should be transferred immediately to a licensed EA, CPA, or attorney. If you happen to be an “industry person” reading this, particularly an unlicensed “closer”, you need to be aware that direct telephone solicitation of licensed representation services is illegal, and can have severe consequences.

The vast majority of large, national tax resolution firms use commissioned openers and hard sell closers to sell representation services. In these firms, the initial consultation is usually done by an individual that is neither qualified to offer tax advice, nor licensed to legally do so. Over the past two years, the FTC and various state attorney generals have been cracking down on these companies, shutting down a number of the larger bad apples. People are being personally fined millions of dollars for violations, and several are also serving lengthy prison sentences. Just don’t do it.


I hope that this tutorial, while lengthy, has been beneficial. The information included here is stuff that some marketing gurus would charge you hundreds, if not thousands, of dollars for in seminars and courses. When actually applied, you can have a steady stream of new clients coming in all the time, and you can literally make millions of dollars using these strategies.

Follow up marketing to your prospect database

To put it bluntly, if you’re not actively marketing to your prospect database on a regular basis, then you wasted the money you spent to obtain those prospects in the first place.

One amazing fact has held true in the sales world for nearly a century: The majority of sales are closed after the 5th contact with a prospect. This fact holds true for any industry, and the number of contacts required to close a sale increases as the price point of the product or service increases.

What does this mean for your prospect database? It means that you should have an automated, pre-set follow up sequence that your prospects get entered into. This follow up sequence should last for an absolute minimum of three months, although 6 months to a year is ideal.

Who gets assigned to this follow up campaign? A legitimate prospect is anybody that has:

  1. personally met with you
  2. been given a telephone consultation
  3. requested information, such as a special report, from you
  4. visited your web site or called you

Basically, I consider a prospect to be anybody that has taken some action to express interest in tax services.

Has mentioned earlier, these prospects deserve special marketing attention. If they have requested information from you via the web, you should always at least request their email address and add them to email autoresponder sequence that reaches out to them at least weekly.

For prospects that you have given a consultation to and/or sent proposals to, you will obviously have their mailing address. In this case, you should be mailing something to them each and every week. Yes, direct mail each and every week for a pre-determined length of time. What you send them can be a variety of things:

  • monthly tax newsletter
  • webinar invitations
  • live financial seminar invitations
  • reports and information
  • quick tax savings tips

In addition, it’s a good idea to have an organized telephone follow up campaign. Especially after you do a consultation and give them a proposal, you should be following up with them every day for a week, and then at least weekly thereafter for a month, then at least monthly.

The sequence of emails, phone calls, direct mail offers, newsletters, seminars, and other activities that you engage in as follow up with your prospects should all be pre-planned, pre-prepared, and AUTOMATED. Your follow up activities should not be something you have to think about it. With today’s computer technology, there is no reason to do this work manually, where it often gets overlooked.

Following up with your active prospects is, quite frankly, the single most important marketing activity that you can engage in. Many firms with a substantial prospect database could actually stop their lead generation activities and focus solely on proper follow up with existing prospects. With a 10 to 20 percent conversion rate, this follow up campaign can provide sufficient revenue to grow your firm with no additional new lead generation.

Setting Expectations: How much does a customer cost to acquire?

If you ask 99.9% of American small business owners how much they spend to acquire a customer, they’ll either give you a blank look or simply tell you how much they spend on marketing. Knowing your cost to acquire an individual customer is one of the most fundamental business metrics that anybody operating a business should be able to tell you off the top of their head.

The cost to acquire a client is of particular importance to those of us that are professional practitioners. Why? Because a client for us isn’t a one-off transaction. Once we acquire a client, our objective is to keep that client for life, which means that client is providing us with revenue for years on end. There’s a metric for this, also: Lifetime Customer Value.

We are fortunate to be in a business where the investment we make to acquire a client can be quite large, since the payback to us in revenue is quite large, often from the very first transaction. Let’s run some numbers…

Let’s say we send 1,000 postcards to tax lien debtors. These are raw liens, in no way previously contacted by us. Our goal is to convert as many of these 1,000 tax liens into prospects that have actually contacted us.

Out of these 1,000 postcards, let’s say we get a below-average response rate of 0.5%, meaning we now have 5 prospects to work with. If we spent $1 each to send those postcards (about average for mailing lists, design, printing, and postage for “jumbo” postcards), then each lead cost us $200. Now that we have these leads, we obviously need to convert them to clients — this is the turn from marketing to sales, and is an important pivot point we will cover in depth in the future.

If we can then convert 2 of those 5 prospects into paying clients, then our $1,000 investment in marketing turns into $500 to acquire each new client. Since these are tax resolution clients in this example, the initial fee paid by each client will be several thousand dollars, meaning that our ROI per client is 5x to 20x, depending on your fee structure.

$500 to acquire a client that will pay us thousands now and thousands more in the future is a BARGAIN. This is so important for you as a practitioner to understand that I will repeat it in a different way: You should be willing to spend hundreds of dollars to acquire a client that will pay you thousands of dollars.

Many readers will shudder at the thought of spending $500 to acquire a new client, but for tax and accounting practitioners this number is actually on the low side, especially given the thousands of dollars in Lifetime Customer Value (LCV) that client provides us. Using direct mail, the investment to acquire a client can vary widely, from under $100 to almost $1,000, but $500 per client is a good target to aim for when using direct mail to market tax resolution services.

Look at your existing business, and figure out what it costs you to acquire your clients. I’m sure you’ll be surprised at how much it actually costs you.

A few words on telemarketing: Many tax resolution practitioners that rely on the use of unlicensed telemarketing staff think that it’s the only and best way to conduct their marketing. However, most of these businesses never look at their cost to acquire a client. When you include opener wages, closer commissions (generally 20% to 30%), tax lien lists, and all other costs in acquiring clients, the costs to run telemarketing campaigns often exceeds the cost per client of doing direct mail. For the companies I’ve conducted this analysis for, cost of acquisition per client typically runs in the $700 to $1200 range.

I highly encourage you to conduct this analysis for your own practice. Services with a low sales barrier, such as tax preparation and payroll service, will have a far lower cost per client, which stands to reason since these services have lower price points. Service with higher price points will typically have higher cost per client acquisition, because there is greater sales resistance. Such services in include tax resolution, audit representation, international tax consulting, and business valuation.

You should conduct a client acquisition cost analysis for each service you offer as an entry point for clients into your firm. For most practitioners reading this newsletter, that will include tax preparation and tax resolution – run each cost analysis separately.

Why one-shot direct mail is marketing suicide

Here’s how most people do marketing, particularly their direct mail.

They get a list, such as our tax lien lists. They print a flyer, brochure, postcard, coupon, etc. They send it to this list ONCE. Then, no matter what happens, good, bad, or ugly, they never touch this list again.

I received an email last week from a reader saying that direct mail doesn’t work. He went on to explain that last year, he had obtained 2,000 tax liens from us, then sent them all a letter. He got ZERO responses.

For one, getting absolutely zero responses out of 2,000 letters definitely tells me there was something wrong with whatever he sent them (which I happily would have critiqued for him at no cost if he had attached a copy to his email). But secondly, the biggest problem was that he only sent them something ONCE. It simply doesn’t work like that. You can’t send something to a group of people one time and one time only and then say, “Direct mail doesn’t work.” Direct mail DOES work…you’re just doing it wrong (sorry to be blunt, but the truth hurts sometimes).

Woody Allen is quoted as saying that “80% of success is showing up”. This is just as true for marketing as it is for performing artists. Statistically speaking, study after study shows that over 3/4 of all customers buy a product or service after the 5th contact from the salesperson or company they buy from.

Here are some other statistics: About 48% of sales people never make a follow up contact with a prospect. Less than 25% of sales professionals make two follow up contacts, and less than 12% make a third follow up attempt (e.g., a 4th contact).

If less than 12% of people make a 4th contact, and over 3/4 of sales are made after the 5th contact, then guess who’s getting those 3/4 of all sales?

That’s right: The company getting all those clients are the ones making the multiple contacts!

Let me phrase that another way: The secret to success in marketing is repetition.

I’m sure that you are fully aware of what battery company uses a cute little bunny rabbit banging on drums to sell their product. However, did you make that association the very first time you ever saw their commercial? Highly doubtful. Chances are, it took dozens of repetitions for you to make the mental association chain of “rabbit -> drums -> Energizer batteries”.

The same is true for your services. The first time somebody hears from you, it barely registers. The 20th time they hear from you, they not only know who you are, but recognize your photo, can repeat your slogan, know your dog’s name, etc.

Why does this work, and why is it so important? Quite simply, it’s because different people are ready to buy your tax services at different points in time, and by keeping in contact with prospects for a greater period of time, you are going to be putting your marketing materials in their hands on the day that they finally decide to spend money.

This is especially important if your specialty is tax resolution, and here’s why: You are competing with the giant, national tax resolution firms that create a telemarketing tidal wave when tax liens are first filed. Those companies pick off the first 25% or so of the tax resolution market – the low hanging fruit. But then their closers give up on those prospects that received proposals, generally after only a couple weeks and a few more contacts.

And by the way, if you are a firm that is doing telemarketing, then you need to have a serious conversation with your closers regarding their follow up habits, because I’m willing to bet you that, quite frankly, their follow up habits straight up suck.

Every prospect you send a proposal to should be hearing from you EVERY WEEK, either by mail or telephone (alternate these for best results), for at least 3 months. Then, they should be hearing from you at least every two weeks for a YEAR. If you aren’t doing this, and you don’t have systems in place for doing this, then you are missing out on the largest group of clients that exist, period.

If you are considering doing a one-shot marketing test, either because you read something I wrote or got fired up at a seminar or by a new book, then stop. Don’t do it. You’d be better off taking that cash and giving it to people on the street, because at that way you’d be making eyeball to eyeball contact with other people. If you’re going to do any form of marketing, do it right from the beginning, or don’t do it at all.

Closing the sale and getting paid

Closing: The very word strikes fear into the mightiest of professional tax slayers.

The problem is that it doesn’t have to. If done properly, as part of your overall needs-based selling strategy, closing isn’t so much a distinct step of a sales process as it is a natural conclusion to the entire meeting.

I have met far too many tax resolution closers (unlicensed sales staff) that simply believe that the key to closing a sale is to pound the prospect into submission. While this technique does sell a couple hundred million dollars worth of client services each within the tax resolution industry, it is also the type of practice that garners unwanted attention from people such as the Federal Trade Commission and your state attorney general. Just ask Roni Deutch and Patrick Cox (of TaxMasters) if it was worth it.

The reality is that any client gained by coercion will forever resent you for it. Sales tactics like this are where BBB complaints, FTC investigations, lawsuits, and increased legislative regulation of our entire industry all stem from.

So what do you do instead?

Like I said, if you’ve done proper need analysis, layed out a solution with strong benefits to the prospect, the sale basically closes itself. Instead of needing to use a “tactic” or a “line” to close the sale, it simply becomes a very easy question: “Does everything we’ve discussed about the benefits of doing XYZ make sense? Well, great, let’s go ahead and get started on putting this IRS problem behind you.”

That’s it. That’s my entire “closing technique” (although I hate that phrase). It’s called “assuming the sale”. If your prospect doesn’t fully understand your solution, then they will ask questions. If they do fully understand your solution, then you can assume that they’ll do business with you.

I should state something that may seem obvious, but that many people actually miss: You should always be asking for the order. Always ask for your prospect’s business. If you don’t ask for their business, guess what? You’re going to starve. If you don’t ask, you won’t get the sale, and even worse, your prospect’s problem won’t get solved. And wouldn’t that be a travesty? Knowing somebody has a problem that you can help solve, but you don’t offer to?

The consultative, question-based process for closing the sale works like this. Ask your prospect:

“Do you see how bringing us on board would ___(solve their need)____?”
“Are you interested in ____(insert primary benefit)___?”
“When would you like to get started on ____(solving their problem)____?”

That’s it. That closing. Nothing fancy. No manipulative techniques. Nothing squirrely. Just restate the need, the problem, the solution, and offer them that solution. “Let’s get started on Monday.” “Let’s go over the paperwork to get started.” Those are the things you need to say. It really is that simple.

Again, if you’ve done a competent needs analysis, thoroughly understand the problem, and have formulated and articulated a solution to that problem, then you don’t need to use aggressive or manipulative closing techniques: Just assume the sale and take the order.

If you can absorb and apply everything in this weeks series on sales, then you’re going to be several steps ahead of 95% of everybody else in this industry. Combine the problem/solution/benefit model with effective lead generation strategies and proper marketing follow up with your prospects, then you’ve got yourself a business.

Offering real solutions that benefit your tax prospects

A tax debt always has an underlying cause. Through your Q&A session, you were able to identify that cause. It’s not uncommon for it to be something that is difficult for the prospect to talk about, especially when there is a family member involved. As a tax professional, once you understand the real problem, you are already several steps ahead of your prospect in regards to solutions. In most cases, your solution is going to consist of three components:

1. Fix the underlying problem.
2. Get into current compliance with tax laws.
3. Fix the tax debt.

Fixing the underlying problem is actually the most difficult. If it’s a family owned business and one employee/family member is embezzling money, that employee needs to be fired immediately and legal action taken in order to create a reasonable cause basis with the IRS. If the family is unwilling to take these measures, then there is actually very little lasting recourse for resolving the tax liability. If the problem is a complete lack of a bookkeeping system, then this can be easily remedied.

This starts to create what I call the problem -> solution-> benefit sales chain. Here is how that works:

1. With a thorough understanding of the prospect’s problem, you can now repeat the problem back to the prospect in a summarized form: “Based on what you’ve explained, the real issue seems to be….”

2. Repeating back the problem creates a segue into your solution: “Based on the issue at hand, my suggestion would be to….”

3. After briefly stating the big picture solution, you can then talk about the benefits of implementing the solution: “By doing this, you will then be able to…”

Why do you want to discuss the benefits to the client? Because, people don’t buy prospects or services. People buy what the product or service gets them. The old saying goes like this: Everybody’s favorite radio station is WII-FM, What’s In It For Me?

Keep in mind that your solution not only needs to meet the prospect’s need, but you need to sell based on the benefits your solution provides, not the features of your solution. As a tax resolution professional, I don’t sell IRS payment plans or settlements or penalty reductions. In reality, what I sell is “getting the monkey off your back”. I sell piece of mind and reduction in stress. In fact, more than anything else, I’m convinced that my clients pay me to do their worrying for them more so than they pay me to negotiate for them.

What is the difference between features and benefits? It is important to know these distinctions, since customers buy benefits, not features, and your solution provides a benefit that meets their need. That right there is the core principle of this post, by the way, so I’ll repeat it:

Based on the questions you ask to understand the customer’s need, you formulate a solution that provides the benefits that meet your customer’s need.

Here are some definitions.

Feature: What your product or service IS or DOES.
Benefits: What the feature GAINS your customer.

The features of tax preparation software include things such as having all the right forms, doing all the math, and filing electronically for you. But do you care about all this? No, of course not. What you care about are the benefits: The tax software takes something fairly complicated and makes it easy for you. What you GAIN is simplification…ease…accuracy. Those are the benefits.

The same holds true for tax resolution. What the client really wants is to not have to deal with the IRS. They don’t want the stress. They don’t want to wake up to their bank account being drained. They don’t want to have uncomfortable conversations with employees, customers, or anybody else. The benefit they are after is peace of mind. By hiring you, they are making the tax debt somebody else’s problem.

Hopefully, you now realize that you are selling benefits. Tomorrow, we’ll delve into some psychology and look at what makes people buy the things that they do, which is useful not only when you’re selling something, but when you’re being sold to yourself.

You don’t get paid until you close a tax service sale

None of us want to think about it, let alone admit it, but each and every one of us is a salesperson. If you are professional service provider, then you must first sell your services to a new client before you can ever put on your CPA, EA, or attorney hat.

This is why I always say that that most successful tax professionals study marketing and sales just as much, if not more, than they study their actual profession. Your Masters in Taxation or your LLM Tax is all and good, but to be quite honest, it doesn’t matter one bit if you’re in private practice and a high school dropout is outmarketing and outselling you. And yes, this happens. In fact, it could be happening to you without you realizing this.

This week I’m going to be talking about sales every day. We talk a lot about marketing to generate leads, and marketing to those leads over time to build a relationship with your prospects. But this week we’re going to delve into what happens after they actually come to visit you or they contact you on the phone.

Due to the fact that I consider tax resolution services to be the most difficult thing to sell within the tax and accounting sphere, I’ll be using that as the example.

There are dozens of different selling schools of thought that exist and that are taught via courses, books, and seminars. Personally, I am a firm believer in the “needs analysis” method of selling. This method has recently started to fall out of vogue in the guru universe, with a move back towards 1970’s style methods of selling in some respects, which tend to push the prospect in one particular direction and is based on creating agreement to options of the widget as you move towards making the big sales decision. For professionals services, I believe this method to be overly pushy, and would leave a prospect feeling as if they didn’t make the buying decision themselves (because they didn’t, we did). So for now, I am remaining a firm believer in needs based selling.

Needs analysis based selling also fits in perfectly with your existing concept of the “consultation”. We all know that the initial consultation is also a sales appointment, and so using needs analysis sales techniques tends to feel much more natural for most practitioners.

So what exactly is needs-based selling?

Well, have you ever talked to a salesperson that immediately launches into their sales pitch while knowing absolutely nothing about you, your business, your goals, or anything else?

That was a person that did NOT exhibit needs-based selling.

Needs based selling goes by several other names, including “consultative selling”, “question based selling”, and “needs analysis” selling. Needs based selling is pretty simple in concept: In order to be an effective salesperson and provide the best possible solutions to a prospect’s problem, you must first fully understand that problem and have enough information to formulate a solution that meets their needs. Consultative selling takes away the one size fits all approach to sales.

If you only offer one very specific service, then this may sound like an odd scenario to you. If that service happens to be tax resolution, then you think, “I offer tax resolution, I don’t have any other service to sell.” With needs-based selling, however, you’re delving deeper into the prospect’s issue, define their objectives, and put together a specific program just for them that is going to meet their objectives. In other words, every prospect gets a personalized tax resolution plan, not the identical boiler plate service agreement or bland, non-specific engagement letter that most practitioners are using.

So yes, you only have one specific service to offer, but you can tailor that service to the needs of your prospect. When I conduct an initial consultation with a new tax resolution prospect, it’s not a 10 minute conversation, which is the norm for unlicensed sales staff (for whom the real job is to get the proposal, Form 2848, and payment form in the prospect’s hands). As a licensed tax professional, you have the technical knowledge and the legal authorization to dispense actual tax advice, so do so. For me, it takes an average of 45 minutes to conduct a thorough tax resolution consultation, at which time the prospect leaves with an actual understanding of what will be done.

Expanded OIC Criteria Create Incredible Marketing Opportunity

Just in case you don’t keep up with IRS regulatory changes on a day to day basis, yesterday was a momentous day. After 15 years, the IRS finally fixed the single greatest problem with the Offer in Compromise program, and reduced the remaining income multiplier from 48 or 60 down to 12 or 24 when calculating the Reasonable Collection Potential (RCP).

In addition, the IRS is now allowing Federal student loan payments and delinquent state and local taxes as an allowable expense, and has expanded the national standards under the miscellaneous category to allow room for minimum credit card payments.

What does this mean for you? It creates an incredible marketing opportunity, as the minimum acceptable Offer amount for prospective clients just dropped by as much as 80%. This will drastically increase the number of people that can (and will) file processable Offers.

In particular, I see this as an opportunity to tackle two distinct target markets:

1. High dollar Trust Fund Recovery Penalty (IRC 6672) cases, particularly those with lien amounts between about $100,000 and $250,000.
2. Mid-range 1040 debtors (those that owe approximately $15,000 to $50,000) that have traditionally been blocked from the Offer program because of the remaining income multiplier.

This kind of marketing opportunity has been handed to us on a silver platter by the IRS approximately once per year for the past three years now. If you missed this opportunity in 2010 and 2011, then be sure to take advantage of it now.

Here are my suggestions for exactly HOW to take advantage of this policy change:

1. Utilize the 80% reduction in the minimum Offer amount statistic in your direct mail pieces, email newsletters, blog posts, and telemarketing scripts.
2. If you traditionally only market to businesses, start marketing to individuals using the criteria I suggested above.
3. Create a limited-time flat fee Offer in Compromise service, and market it heavily.
4. Go through your list of prospects from the past 6 to 9 months that did not hire you, and call, email, and mail them in regards to the new OIC criteria.

I guarantee you that some astute practitioner out there that doesn’t subscribe to this newsletter is thinking along the same lines as this, and is going to take action. The relaxation of the OIC criteria is going to create a slew of potential new clients in the marketplace, and you can choose to either take advantage of this or let it pass you by, it really is your choice.

If tax resolution is not your primary practice area, and you do not feel comfortable doing Offers in Compromise, I’d be more than happy to conduct a webinar within the next week or two to teach you this valuable skill. If enough people are interested and contact me by replying to this article, I’ll put that together. Keep in mind that it might be worth CPE/CLE depending on what state your are licensed in.

Also, to help you take advantage of this opportunity, I’m going to maintain the current price reduction on the unlimited lien subscription for a few more weeks. If you are not already a Federal tax lien data subscriber, you can login or create an account here on (creating an account and getting data counts are always free).

I purposefully limit myself to six active cases at a time that I’m willing to work on, but given the level of opportunity presented by this policy change, I’m going to temporarily break my own rule and do some extra marketing within my own tax practice. This is just too good to pass up — don’t miss out for yourself.

Why Are There Only X Number of Liens For My Criteria Available?

We get a lot of questions pertaining to why only so many leads are available for a given set of selection criteria. This is a very good question, and I will attempt to answer it here.

First and foremost, one must understand that liens are a finite resource. In other words, there are only a limited number of them. In 2010, the IRS filed 1.1 million Notices of Federal Tax Lien (NFTL). The vast majority of these liens were against individuals owing less than $10,000.

In Fiscal Year 2012, the IRS only filed 707,000 tax liens. That’s for the entire United States.

In 2013, the IRS only filed 602,005 tax liens.

So, the number of lien filings is going down. As of March 2012, the IRS changed the threshold for filing a lien, raising it from $5,000 to $10,000. Anybody with a lien filing less than that amount is a repeat offender, and is pyramiding their tax debt liability.

Let’s go back to that 707,000 liens filed in 2012. Keep in mind that, under most circumstances, we don’t collect lien data on liens less than $5,000. Therefore, those smaller liens won’t even be in our system, and those liens (for repeat offenders that are growing their tax debt) are usually only a couple thousand dollars.

Last year (2012), we collected data on about 250,000 federal tax liens. Since these liens are mostly $5k and above, this represents new tax debtors.

Think about a business that owes 941 taxes, and has for years. They could owe a total of $80,000, and are growing that by several thousand dollars each quarter. 941 debtors represent about 40% of all new debtor lien filings, but these same folks also have an additional 1 to 4 liens filed against them per year. When you have one existing debtor with up to 4 new liens filed per year, that’s a significant portion of the “missing” liens we’re not collecting.

Also consider your search criteria. If you are only searching for liens above $25,000, for example, then you’re simply searching above the range at which most tax liens are filed. In other words, there are simply fewer tax debtors that owe more than $25,000, in comparison to those that owe less than this amount. The percentage distribution in our system is skewed high because we cut off at the $5,000 mark, but even at that, liens greater than $25k represent about 42% of our database. Only 20% of our database exceeds $50,000 of tax debt, and about 12% exceeds $75k.

Some additional reasons why lien counts are lower than you expect:

  1. It’s quite possible we simply don’t collect data in certain areas. For example, most of PA, MT, and WY we are simply unable to collect. We may not collect the data because it’s either not readily available, we don’t have the resources to procure the data, or simply because nobody buys it from us, and thus we don’t collect it.
  2. Liens are filed in proportion to the population of an area. If you are only looking for liens in a small area (such as one ZIP code), there are simply fewer available than if you expanded your geographical area.
  3. If you are looking only looking for liens with phone numbers, bear in mind that we obtain phone numbers for about 72% of the business liens in our database. Also, if you are looking only for 1040 leads with phone numbers, remember that we no longer make special effort to find phone numbers on 1040 leads. If you want 1040 phone numbers, you must use a phone append service to obtain them.
  4. Most liens filed are LESS THAN $10,000. Most tax resolution firms want liens higher than this, since tax debts under $10k can be settled with a GIA quite simply, and therefore often are not worth trying to sell services to (although I personally disagree with this logic, but that’s the subject of a different post).
  5. You should also be aware that our duplicate prevention system works differently than other companies. If a particular business has a NEW lien filed against it when and OLD one already exists, all the other companies will count that as a “new lien”, because technically it is. However, based on much feedback from our customers, we THROW OUT that newly filed or updated lien as a DUPLICATE, because most of our customers have told us that they don’t want to pay for the same lead information twice. Even if the new lien is filed, they already have the OLD lien information in their lead files, and by the time the new lien gets filed, they will often already be contacting the old lead they already purchased again anyway as they “recycle” old liens through their sales cycle. With this said, it should be noted that many businesses are serial tax debtors, and therefore a significant number of business lien filings are against repeat offenders, and therefore get “duped out” of our system.
  6. If you are used to purchasing liens from INFT or a few other companies, many of them don’t even give you the OPTION of selecting a lien date to start from. They fill your order by starting from today and working backwards to find the liens that match your criteria, and go back as far in time as they have to in order to fill your minimum order. We don’t do that. Our system starts from today and only goes back as far as you tell it to. In other words, your order isn’t filled based on how much money you have in your account or how many liens you’ve asked for — it’s filled based on the limits of your criteria. Our data collection staff only gathers liens that have been recorded within the past 7 days, which causes us to miss data sometimes. Our entire company mission is to provide fresh data — we do not maintain archival lien records, as there are plenty of other companies that do, and it is not those companies which we consider our competition.
  7. Lastly, keep in mind that recently lien filings are slowing down. This is due to two factors. One, the IRS recently announced that they were increasing the minimum debt amount for automatic filing of a lien. Also, the IRS’s budget recently experienced a significant shift, with resources pulled away from certain departments and reallocated to other departments, such as Revenue Officer hiring for collections enforcement. The IRS is getting backed up on the filing of liens (remember, it costs them money to file a lien with the county or state) as the budget for that activity has decreased. And finally, there is a seasonal lull in tax filings during the tax preparation season. Lien filings will pick up as those returns are processed and the tax bills on those returns go unpaid throughout the summer. Far more liens are filed in the second half of a calendar year than in the first half.

Hopefully these points will clear up some of the questions that many of you have regarding data counts. For a small number of you that are looking for data in very specific areas, there is also the fact that we may simply not cover your area. For many more rural areas of the country, we may not collect data at this point due to lack of customer interest in coverage for that area, or simply because the data is unavailable through public records. We are always working to expand our coverage, but it is impractical for us to cover all 3,200 United States counties.

Transferring Telephone Sales Calls To Closers

Some tax resolution organizations will choose to use a sales model in which a team of 3 or 4 telemarketers are making the initial contact with tax debtors, and then transferring the calls of people that are actually interested to a sales closer or the licensed person on staff. This is a highly efficient sales model that ensures that the closer or licensed person is only talking to interested people and doing actual consultations, making better use of their time. The telemarketers in this case can be minimum wage employees with some sort of bonus/commission structure for sales made, or even just straight hourly.

Transfers to the closer or licensed professional can be handled one of two ways. The first way is to transfer the call LIVE, which is often more effective. The other option is to have the telemarketer set telephone consultation appointments for the closer. The latter method is often preferential for very small firms and solo practitioners. In the case of a solo practitioner operating only in their local area, these appointments can be physical, in-office appointments to discuss the tax problem, and the telemarketer must screen the prospect using a set of questions developed for that purpose, to ensure that the licensed professional can actually help them and their time is being used most efficiently.

Live Transfers

The transfer from Opener to Closer needs to be done smoothly and professionally! Once you have the call you should have an intro. For yourself that goes something like this…

“Hi (prospect) , this is (your name), I’m one of [FIRM’s] [senior consultants, attorneys, CPA’s, Enrolled Agents], and the reason (opener) transferred you to me is to take the conversation farther to see if we can be of service for you on the (tax issue) problems. OK? Now, as (opener) explained, [FIRM] specializes in resolving government tax lien problems for companies all across the country. Actually, we have clients in every state in America. Also, as you probably know we get the tax lien info from public record sources. Anyway, (opener’s) notes state that you owe the (IRS / State) approximately ($ amount) in back taxes: does that sound right?”

[Remember, you always want to be asking questions that either get you YES answers, or that ENGAGE the prospect in CONVERSATION.]

After receiving a YES answer, or engaging in conversation about the correct tax debt amount, continue with the script:

“What I need to do now is simply ask you a few questions, and you and I will figure out if we can help out or not, ok?”

From this point, you can ask a series of questions to determine the taxpayer’s real situation and potential eligibility for resolution programs. This consultative selling approach is the ideal way to sell any professional services, including tax collection representation.