PRACTICE CORNER FROM THE
Bankruptcy Tax Resolution Leads
With the tax resolution market poised to explode with new cases due to the economic devastation brought on by COVID-19, so too will bankruptcies. To put this in perspective, in 2010, due to the Great Recession, we saw the highest bankruptcy filings ever at 1.6 million. Last year, in 2019, there were about 775,000 filings. Already, in the month of May, there was a 50% increase in bankruptcy filings over the same period last year. We will certainly pass the high-water mark of 2010 in the next 12 months and beyond. It’s already projected that 40% of your mom-and-pop restaurants and brick- and-mortar shops will shutter their doors for good, not to mention businesses related to the hospitality and entertainment industries and others. And that leads me to the following: The folks who are filing chapter 7s and 13s now (and in 2021) have IRS debt that they and their attorneys think will get handled in the bankruptcy. Any 2017, 2018, and 2019 income (and definitely payroll) tax liability will not get discharged and will survive the bankruptcy due to the laws surrounding income tax discharge, meaning these people will need help resolving their IRS debts. As soon as the bankruptcy is discharged or terminated, they will start receiving aggressive collection notices from the IRS. They will need representation. They will need YOU! What if you could get a list (with all pertinent contact information) of names of people whose bankruptcy was discharged or terminated, and you knew that they had IRS debt that survived the bankruptcy? I am in the process of creating a database to obtain this information from all 95 bankruptcy courts in the U.S. I will also be able to see who the bankruptcy attorneys are who are filing the (most) cases in these jurisdictions. Now is the time to forge relationships with bankruptcy attorneys in your area, as most bankruptcy attorneys do not do IRS representation. Both the individual debtor and the attorneys themselves are an excellent source of tax resolution leads that no one (that I know of ) is marketing to. What makes these just- terminated bankruptcy cases “hot” tax resolution leads is:
• The taxpayer is already used to paying professional fees. • They were under the assumption the IRS would be handled in the bankruptcy. • They’re receiving threatening collection notices now from the IRS. I recommend doing a three-step direct mail campaign to these leads. I have created a new COVID-19 bankruptcy referral letter that’s on the Roz Strategies membership site, under the “Easy Template Library” tab. Start mailing these out with a copy of your Tax Resolution Times newsletter today!
–Michael Rozbruch
888.670.0303 • 3
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