IRS Enforcement Activity Is Driving Tax Attorney Demand
The Internal Revenue Service received approximately $80 billion in additional funding through the Inflation Reduction Act, with a significant portion allocated to enforcement. By 2025, the IRS had increased examination rates for partnerships by 22% and for S-corporations by 17%, according to the IRS Data Book 2024. High-income individual returns ($400,000+ AGI) are under enhanced scrutiny, and international information reporting penalties — particularly for FBAR, Form 5471, and Form 8938 — are generating a new category of penalty abatement work.
That enforcement environment is producing more IRS controversy work per client than tax attorneys have managed in a decade. A 2025 Tax Foundation Practice Survey found that 71% of tax attorneys reported an increase in IRS examination and collection workload year-over-year. The administrative load of managing that caseload — tracking correspondence deadlines, coordinating documentation, filing authorizations — is substantial and growing.
IRS Correspondence Management: Tracking What Comes In and What Must Go Out
IRS correspondence arrives in paper form at client addresses, at representative CAF addresses, and via the IRS Secure Messaging system. A trained tax VA monitors all three channels, categorizes incoming correspondence (examination notice, collection notice, penalty notice, notice of deficiency), logs the issue date and response deadline, and routes the document to the responsible attorney with a deadline alert.
IRS deadlines are statutory in many cases. The 30-day letter response window in examination cases, the 90-day deadline for filing a Tax Court petition in response to a notice of deficiency, and Collection Due Process hearing request deadlines are not extendable by agreement — missing them forfeits the client's rights. A VA maintaining a correspondence tracking log with calendar integration ensures no deadline is missed.
According to a 2025 ABA Tax Section Practice Management Report, tax practices with structured IRS correspondence tracking systems report missing statutory deadlines in fewer than 0.5% of cases, versus 4.2% for practices tracking correspondence manually without dedicated administrative support.
Power of Attorney Administration
Before a tax attorney can communicate with the IRS on a client's behalf, a Form 2848 Power of Attorney must be filed with the IRS's Centralized Authorization File (CAF) unit. A VA manages the POA lifecycle: preparing the Form 2848 for attorney signature, submitting via fax or the IRS Tax Pro Account portal, tracking acknowledgment from the CAF unit, and maintaining a POA log for all active clients.
When clients experience a change in representative, the VA prepares a revocation of the prior POA and the new authorization simultaneously, ensuring no gap in representation. The IRS's continued expansion of the Tax Pro Account platform allows certain POA functions to be managed digitally — a workflow improvement that VAs trained in the platform can administer efficiently.
Client Intake for Tax Controversy and Planning Engagements
Tax controversy intake requires collection of the client's tax identification number, the years and tax types under examination or at issue, prior correspondence with the IRS, prior returns for the relevant years, and information about any previously filed protests or Tax Court petitions. A VA conducting intake under attorney supervision can gather that information via a structured questionnaire, reducing the time the attorney spends on information collection during the initial consultation.
For tax planning engagements — business entity structuring, estate tax planning, international tax advice — intake involves collecting the client's current entity structure, financial statements, prior-year returns, and specific transaction details. A comprehensive intake package allows the attorney to arrive at the planning consultation with context already established.
Document Assembly and IRS Filing Preparation
Tax controversy work involves assembling administrative records for submission to the IRS: protest letters, document productions in response to information document requests (IDRs), offers in compromise applications, installment agreement requests, and innocent spouse claims. Each of these involves assembling exhibits, preparing transmittal letters, and calculating relevant figures from the client's financial records.
A trained tax VA prepares the document index, organizes exhibits in required order, prepares transmittal envelopes and cover letters, and tracks the certified mail or electronic submission confirmation. For offers in compromise, the VA compiles the financial documentation package (Form 656, Form 433-A or 433-B, supporting financial records) for attorney review before submission.
Billing in Tax Practice
Tax practices typically bill hourly for controversy and planning work, with some fixed fees for defined deliverables such as penalty abatement requests or offer in compromise applications. VAs enter time entries, prepare pre-bill reports for partner review, track write-offs, and follow up on outstanding invoices.
Tax attorneys with strong client relationships in the high-net-worth and closely-held business space often handle recurring engagements — quarterly estimated tax planning, year-end structuring, and annual return review — that require consistent billing cycle management across multiple years. VA billing support ensures that those recurring engagements are invoiced promptly and consistently.
Tax practices evaluating virtual staffing for administrative support can review service options at Stealth Agents.
International Compliance Administration
International tax compliance — FBAR filings, foreign account disclosure, FATCA compliance, transfer pricing documentation — requires annual administrative follow-through that generates significant VA-appropriate work. Tracking FBAR deadlines, preparing disclosure checklists, coordinating with foreign financial institutions for account statements, and organizing the documentation supporting transfer pricing analyses are all functions that trained tax VAs can manage under attorney supervision.
Sources
- IRS, Data Book, 2024
- Tax Foundation, Practice Survey, 2025
- American Bar Association Tax Section, Practice Management Report, 2025
- Tax Notes, IRS Enforcement Trends, 2025