Not sure how to price your Tax Resolution services? We've rounded up a few pricing models to get you started.
There is no universal or exact way to price your Tax Resolution services. However, if you’re looking for guidelines, we’ve rounded up some common ways that other Tax Resolution practices are currently pricing their services.
Offering an initial consultation
Building trust with prospective clients is critical, and to do so, many practitioners perform an initial consultation before a full engagement, so the prospective client can see the value of the practitioner’s services. This initial consultation is designed to understand the client’s personal circumstances and tax situation. Often the outcome of the initial consultation is a recommendation of how to move forward with the client’s case. The consultation provides a tremendous opportunity for you to show that you know your stuff and have an urgency to complete the case.
Commonly, tax practitioners offer a free consultation. The client doesn’t have to pay anything if they don’t qualify for Tax Resolution or if their case is not likely to be successful. Offering a free consultation could be a good way of garnering business and building trust. A client may be more likely to consider your practice for Tax Resolution if they don’t have to pay to have their case evaluated.
On the other hand, many practitioners provide an initial consultation but for a fee. For example, Michael Rozbruch, a leading Tax Resolution expert, advocates for always getting paid an upfront fee before starting any work, even a consultation. If you choose to charge an initial fee for looking over a case, Rozbruch suggests charging $1,250 to $1,500.
Conversely, Kurt Avarell, the CEO and founder of CanopyTax.com, practiced as a Tax Resolution expert and his company charged an initial fee of $250 to $350 to get started, considerably less than that of Rozbruch.
At the end of the day, whether you charge $250 or $1500 (or even offer it free) for the initial consultation, the goal is to learn the fact of the case, understand potential outcome resolutions, and earn the potential client’s trust — anyway you price it, the initial consultation will help you move your relationship forward.
Offering flat fees vs. variable prices
Similar to the price range for initial consultations discussed above, there is also a wide range of ways to price Tax Resolution services as part of a full-service engagement.
Some people prefer to offer flat fees to complete all the necessary work for a particular outcome. No matter what services are used, the client pays one fee to cover whichever Tax Resolution services end up being needed.
There are certainly some amazing benefits of using flat fees. If you complete the services at a faster-than-expected pace, your effective hourly rate goes up! In addition, your client will get predictability in pricing, which they’ll love. On the other hand, flat fees can become very expensive to you if you end up spending more time than expected on the engagement. The initial consultation suggested above can help mitigate this risk, however, since you would know before pricing your services what the most likely outcome is for your client.
Other tax professionals charge hourly for their services. In the legal and accounting industries, hourly billings are still very popular because they assure that professionals get paid for the value of their work. However, this comes at the cost of predictability for the client. Larger clients, especially big businesses, may not care about predictability and lower cost. They’re just looking for the best service at the best price. Small business clients or individuals might be more sensitive to the unpredictability of hourly rates and prefer a flat fee.
Here are some examples for reference of these different types of pricing:
Pricing with flat fees
Flat Fee Tax Service is a tax practice in San Diego that prices Tax Resolution services for a flat fee. Their pricing is as follows:
- Free consultation
- Flat fee of $2,050 for any liability between $10,000 to $99,999
Of the flat fee, only $250 is an initial fee, everything else can be paid monthly.
- If the client has more than $100,000 liability, the total fee goes up to $3,050.
Pricing based on services
Fresh Start Tax & Accounting is a tax practice located in Maryland. Their prices vary depending on the service. Below is how they price some of their services.
- Free consultation for most services
- Offer in Compromise: $2,600 to $12,000
- Penalty Abatement: $500 plus 35% of savings
- IRS Levies: $500
- IRS Liens: $750
- Innocent Spouse Relief: $950 to $3,500
- Audit Representation: $300/hr with a $1,200 minimum
Pricing based on liability
Certified Tax Solutions is a practice located in Utah whose prices are based on the client’s liability. There prices are as follows:
- $200 initial fee for evaluating case
- $0 to $10,000 liability: $2,000
- $10,000 to $50,000 liability: $3,500
- $50,000 to $100,000 liability: $5,500
- Over $100,000 liability: Set up a free consultation
Pricing based on both services and liability
Rozbruch’s suggestion for pricing your services is based on both services and liability. Rozbruch says that his average engagement while doing Tax Resolution was worth about $5,000, or approximately $300 to $400 an hour. Here is what he suggests for pricing:
- $1,250 to $1,500 initial fee for evaluating case
- Offer in Compromise
Under $50,000 liability: $4,250+
$50,000 to $100,000 liability: $4,750 to $6,750+
$100,000 to $300,000 liability: $7,250 to $9,750++
$300,000 to $750,000 liability: $9,750 to $14,975+++
Over $750,000 liability: $14,975 to $18,975+++
- Penalty Abatement: $1,000 to $2,500+
- Release of Bank/ Wage Levy: $1,000 to $1,500
- Innocent Spouse Relief: $3,500 to $6,500
- Audit Representation (per period/ year): $4,500+/year
- Installment Agreement
SL-ACS under $25,000 liability: $1,500
SL-ACS $25,000 to $50,000 liability: $1,575 to $2,500
ACS $50,000 to $200,000 liability: $3,000 to $6,500+
Revenue office assigned: Add $1,000 to $2,500
These, of course, are not your only options for pricing your own services. Other practices charge prices that vary from those that have been mentioned.
Finding a pricing system for your Tax Resolution services can be difficult at first but using other established practices as references for where to start can make the process easier.
Now that you’ve decided how much to charge for your services, the next step is to find clients! If you’re looking for ideas, here are 4 easy ways to get more tax resolution clients that you can use today.