The Tax Professional’s Guide to Tax Resolution

Tax resolution, also called IRS representation or tax controversy, is the process of helping individuals and businesses resolve tax problems with the IRS or state taxing authorities.

It covers negotiating settlements, setting up payment plans, releasing liens and levies, stopping wage garnishments, and getting unfiled returns caught up.

Tax resolution professionals specialize in handling problems involving:

• Unpaid taxes
• Unfiled tax returns
• IRS collection activity
• Penalties
• Audits
• Payroll tax problems
• Innocent spouse issues

Millions of taxpayers and businesses are dealing with unresolved tax problems at any given time. In fact, the IRS ended FY 2025 with more than 13.1 million taxpayer delinquent accounts in its collection inventory. Taxpayers with unfiled returns create another significant need for professional help. At the end of FY 2025, the IRS had more than 3.2 million taxpayer delinquency investigations in inventory.

Behind those numbers are real individuals and business owners dealing with unpaid taxes, missing returns, penalties, liens, levies, payment problems, and other IRS collection issues.

For someone who does not work with the IRS regularly, resolving these problems can be difficult. A case may require interpreting IRS transcripts, determining filing compliance, understanding collection activity, analyzing financial information, researching IRS procedures, and evaluating multiple resolution strategies.

The good news is taxpayers don’t have to do it alone. The Right to Retain Representation is one of the ten rights in the Taxpayer Bill of Rights. Every taxpayer can have an authorized representative deal with the IRS on their behalf.

But that right only means something if there’s somebody qualified to fill it, and in many towns around the country there isn’t. That’s the gap the tax resolution industry, and ASTPS, exists to close.

A tax resolution professional works with an individual taxpayer or business to help them understand and resolve their problems with the IRS. The tax resolution professional gathers information from both the IRS and the taxpayer to be able to analyze and evaluate their entire situation. From there they can develop a strategy to bring the taxpayer into compliance and resolve any outstanding liability.

A typical tax resolution engagement may involve determining:

• Are all required tax returns filed?
• What does the taxpayer actually owe?
• What collection activity has the IRS already taken or may take next?
• How much time is remaining for the IRS to collect?
• What resolution options are available?
• Which option is most appropriate for the taxpayer’s circumstances?

 

Depending on the case, the work may include obtaining and analyzing IRS transcripts, reviewing account history, communicating with the IRS, analyzing the taxpayer’s finances, preparing collection information statements, responding to notices, requesting penalty relief, negotiating collection alternatives, handling appeals, and monitoring the case through the final resolution.

Tax resolution professionals see a wide variety of tax problems on a monthly basis. Clients may come to you with years of unfiled returns, collection notices they don’t understand, levies against wages or bank accounts, business payroll tax problems, large penalties, or disputes over how much tax they actually owe.

Some of the most common tax problems resolution professionals encounter include:

Unpaid Tax Liabilities
A taxpayer has filed their returns but cannot pay the full balance due.

Unfiled Tax Returns
Taxpayers may have one or several years of missing returns. Very common to see 3-6 years at a time.

IRS Levies and Wage Levies
The IRS may seize funds from bank accounts or levy wages and other property. Tax professionals can help determine what collection action is occurring and what options may exist to address it.

Federal Tax Liens
A federal tax lien protects the government’s interest in a taxpayer’s property when taxes remain unpaid. Resolution work can include addressing the underlying liability and, when appropriate, evaluating lien-related remedies.

Payroll Tax Problems
Businesses with unpaid employment taxes can face significant IRS collection action, and responsible individuals may potentially face personal assessment of certain trust fund taxes.

IRS Penalties
Taxpayers may qualify for penalty relief depending on their compliance history and the circumstances that caused the problem.

Each type of tax problem requires a different strategy. Understanding how the IRS assesses, collects, and resolves tax liabilities is one of the core skills of a tax resolution professional.

Three credentials carry unlimited representation rights before the IRS: Enrolled Agent, CPA, and Attorney.

Unlimited rights: EA, CPA, Attorney

All three can take on any tax problem, in front of any IRS office, for a taxpayer in any state. You’re not limited to clients in your own backyard.

These are rights before the Internal Revenue Service. Every state writes its own rules, and most taxpayers with a federal problem have a state problem too, so check eligibility with the state you’re working in.

Limited rights: AFSP

Annual Filing Season Program participants can represent clients only on returns they prepared and signed, and only in front of revenue agents, customer service reps, and the Taxpayer Advocate Service. Appeals and collections are off the table either way. Collections is where tax resolution lives, so AFSP alone won’t get you there.

No rights: PTIN-only and unenrolled preparers

You can prepare returns, and Form 8821 lets you receive a client’s tax information. You can’t speak to the IRS on their behalf.

Bottom line: If you want to get involved in the tax resolution business, you must get licensed first. The fastest route to representation rights is becoming an Enrolled Agent.

There are many reasons to learn tax resolution, even if you never plan to make it the primary focus of your practice. For many tax professionals, adding representation skills simply allows them to provide more value to the clients they already serve.

1. Keep More of Your Existing Clients

When an existing client receives an IRS notice or develops a serious tax problem, you can help them instead of immediately referring the work elsewhere. That allows you to maintain control of the client relationship and avoid the risk of referring a valuable client to another firm that may ultimately provide additional services to them.

2. Create Year-Round Revenue

Unlike tax preparation, tax resolution is not limited to filing season. Tax problems occur throughout the year. A taxpayer with several years of unfiled returns, an IRS levy, or a growing collection problem may walk into your office in July or August, creating meaningful work during traditionally slower months.

3. Add a Higher-Value Service

Tax resolution requires specialized knowledge of IRS procedures, collection alternatives, representation rules, and case strategy. Because clients are often dealing with significant financial problems and need professional representation, resolution engagements can command substantially higher fees than many traditional compliance services. Depending on the complexity of the case, engagements can often generate several thousand dollars in professional fees.

4. Make a Meaningful Difference for Clients

Tax resolution can be extremely rewarding work. You may be helping someone stop a wage levy, resolve years of unfiled returns, establish an affordable payment arrangement, reduce penalties, or finally address a tax problem they have been avoiding for years.

For many practitioners, that problem-solving aspect makes representation work more personally and professionally fulfilling than routine tax preparation.

5. Put Your Existing Credentials to Greater Use

If you are already an attorney, CPA, or enrolled agent, you already have unlimited representation rights before the IRS. Those credentials allow you to represent taxpayers in matters involving audits, collection issues, payment problems, and appeals.

Learning tax resolution allows you to use those credentials for a broader range of services rather than limiting your practice primarily to tax preparation or compliance work.

6. Integrate It Into the Practice You Already Have

You don’t necessarily need to build an entirely separate tax resolution firm. Resolution services can fit naturally into an existing tax practice.

Your current tax clients may already be dealing with unpaid balances, IRS notices, unfiled returns, penalties, or other problems. Learning how to handle those cases allows you to expand the services you offer without having to start with an entirely new client base.

7. Develop a Service That Is Harder to Commoditize

Tax preparation is becoming increasingly automated and price competitive. Tax resolution is much more dependent on professional judgment, strategy, communication, negotiation, and an understanding of IRS procedures.

A practitioner has to evaluate the taxpayer’s facts, understand what the IRS is doing, determine which alternatives are realistic, and guide the case toward a resolution. Those skills are considerably harder to replace with basic tax software or low-cost preparation services.

Tax resolution requires a different skill set than traditional tax preparation. A strong tax foundation is useful but not required (many tax resolution pros do not do any tax preparation). Successful resolution work depends heavily on analysis, communication, judgment, and the ability to navigate IRS procedures.

1. IRS Procedure and Representation Knowledge
You need to understand how the IRS collection and examination systems work, including notices, deadlines, transcripts, powers of attorney, collection alternatives, appeals, and taxpayer rights.

2. Financial Analysis
Much of tax resolution involves reviewing a taxpayer’s income, expenses, assets, liabilities, and ability to pay. You need to be comfortable analyzing financial information and determining which resolution options may realistically be available.

3. Problem-Solving and Case Strategy
Two taxpayers who owe the same amount may need completely different solutions. A good tax resolution professional has to evaluate the facts, identify the real problem, and develop a strategy rather than simply filling out forms.

4. Communication Skills
You need to explain complicated IRS issues in plain language to clients while also communicating professionally with Revenue Officers, ACS employees, examiners, and Appeals personnel.

5. Negotiation Skills
Many cases require advocating for the taxpayer’s position, responding to IRS requests, challenging assumptions, and negotiating an acceptable resolution.

6. Research Skills
You will regularly need to find and interpret information in the Internal Revenue Manual, Internal Revenue Code, Treasury Regulations, IRS publications, court decisions, and other authoritative guidance.

7. Organization and Case Management
Resolution cases can last months and involve multiple deadlines, documents, IRS contacts, and follow-ups. Strong organization is essential to keeping cases moving and avoiding missed deadlines.

8. Client Management
Tax resolution clients are often stressed, disorganized, or embarrassed about their situation. You need to be able to gather information, set expectations, keep clients responsive, and guide them through a process that can take time.

Getting started in tax resolution does not require building an entirely new practice from scratch. If you already have the credentials to represent taxpayers before the IRS, your biggest challenge is learning how to properly evaluate a case, choose the right strategy, and navigate IRS procedures.

The first step should be foundational tax resolution training. There are common mistakes in representation work that can cost clients significant time and money, and it is difficult to know what you don’t know until you have been exposed to the entire resolution process. Programs such as the ASTPS Tax Resolution Accelerator are designed to provide that foundation and prepare tax professionals to begin handling real cases.

From there, the goal is to turn that knowledge into experience:

1. Get your first case. Whether you charge for it, discount it, or take on a case simply for experience is up to you. At some point, the concepts you learned in training need to be applied to an actual taxpayer situation.
2. Have experienced support available. Your first few cases will inevitably raise questions you have never encountered before. Having someone experienced to discuss those situations with can be invaluable. ASTPS Professional Membership, for example, includes case consulting calls so practitioners can get help as they begin working real resolution cases.
3. Add a reliable research tool. No tax resolution professional memorizes the entire Internal Revenue Manual. Every case will require some degree of research into IRS procedures, rules, deadlines, and available remedies.
4. Use tax resolution case software. Specialized programs can help organize client information, analyze IRS transcripts and financial data, prepare forms, and manage the case from beginning to end.

One of the advantages of adding tax resolution to an existing tax practice is that the startup investment can be relatively small compared with the potential revenue from a single case. You also do not need to purchase every tool before you begin.

Learn the fundamentals, get your first case, make sure you have support, and then invest in the tools you need to handle the work effectively.