You did the hard part. You negotiated the installment agreement, built the offer in compromise, or got the payroll tax catch-up plan approved. The IRS says yes — and then your client sits across from you and asks the question the resolution doesn't answer: "Where does the money actually come from?" A resolution plan and a funded resolution plan are two different things, and the gap between them is where clients quietly fall apart after you've already done the work that was supposed to save them.
A resolution plan doesn't come with a way to pay for it
The IRS doesn't care whether a business has the cash to execute the deal it just agreed to. An offer in compromise usually requires a lump sum or a short payment schedule. An installment agreement demands the business stay current every month, on top of payroll, rent, and suppliers it's already stretching to cover. A payroll tax catch-up plan requires making up back deposits while not falling behind on the current quarter. The agreement itself solves the IRS problem. It does nothing for the cash-flow problem sitting underneath it — and that's usually the problem that got the client into trouble in the first place.
Where funding fits — alongside your work, never instead of it
This is the distinction that matters most, and it's worth being blunt about: funding executes a resolution plan, it does not replace one. A client doesn't skip the EA and go borrow their way out of a tax problem — that's not what this is, and any partner who frames it that way is selling something dishonest. What funding does is give a client who already has a real, IRS-approved plan the working capital to actually carry it out without starving the business in the process.
The moments to watch for in your own client work
- An offer in compromise needs a lump sum the business doesn't have sitting in an account, even though the offer itself is a strong deal.
- A new installment agreement is approved, but the added monthly payment is the thing that finally breaks an already-tight cash cycle.
- A business is catching up on delinquent payroll tax deposits while trying to stay current on this quarter's — the exact moment that turns a manageable problem into a spiral if the cash isn't there.
- A revenue officer sets a deadline for a first payment or a good-faith deposit, and the client has days, not months, to find it.
What makes this a good referral
The pattern is the same one that makes any referral work: the business has real revenue to service new capital on top of the resolution payments, the use of funds is specific and tied to the plan — not vague relief from "being behind" — and the client is expecting the call because you told them it was coming. A warm handoff works far better than a name dropped into a form: "I'm connecting you with the funding team I work with — they'll walk through options for covering the resolution, no pressure, no obligation."
What to check before you refer a client
- Written agreement first. Fee structure and payment timing, in writing, before your first referral goes out.
- How they talk about the plan. A legitimate partner asks about your resolution details and funds around them — they don't try to sell a product that conflicts with what the IRS already approved.
- Contact discipline. A client already stressed about the IRS does not need a second party calling them daily. Ask how many touches, and confirm the lead is never resold.
- Honesty about limits. A real partner will tell a client when funding doesn't make sense for their situation — that's a partner worth trusting with the next one too.
- Visibility. You should be able to find out what happened after the introduction without chasing anyone for an update.
Compliance corner (the honest fine print)
Funding helps a client execute a resolution plan — it never erases a tax problem, and no honest referral partner will market it that way. Business-purpose financing referrals generally don't carry consumer-lending licensing requirements, but you're still the client's tax professional of record, and nothing about a referral relationship changes that. Best practice is to disclose the relationship plainly — that you may earn a fee if the introduction leads to funding — before you make it. Clients rarely object to a disclosed referral that genuinely helps them; the risk is only ever in one that isn't disclosed.
Common questions
Can business funding pay off an IRS installment agreement or offer in compromise?
Funding supplies the cash for a down payment, a lump-sum offer, or staying current during a payment plan — it doesn't pay the IRS directly or replace the agreement. The resolution is still the client's; funding just carries it.
Does funding replace the need for a resolution plan?
No. Funding addresses cash flow; your resolution work addresses the tax problem. Your plan comes first, funding to carry it out comes second — always in that order.
What tax situations should I consider referring for funding?
Any moment the resolution is sound but the business can't fund it while still operating — an OIC lump sum, a new installment payment straining cash flow, or payroll tax catch-up alongside current obligations.
Do I need to disclose a referral relationship to my client?
Yes, as best practice — tell them plainly you may earn a fee if they fund. Disclosed and genuinely useful referrals are rarely a problem; undisclosed ones are the only real risk.