Fee time: What to say to price shoppers

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Tax preparers deal a lot in numbers. So, it seems, do some prospects.

“I didn’t achieve the knowledge and experience I have to be the lowest cost provider in the business,” said Bruce Primeau, a CPA and president at Summit Wealth Advocates, in Prior Lake, Minnesota. “The cost of my services, in my opinion, is worth the value we provide.”

“We stand our ground when it comes to fees,” said Debra James, an Enrolled Agent at Genesis Accounting & Mgmt. Services in Lorain, Ohio. “We know our market, we know we’re more than fair and that folks are getting excellent value for the level of expertise they receive."

“If the only thing they place value on is price, they’re not the clients we place the highest value on,” she said, “and we kindly tell them that there are no hard feelings for taking their business elsewhere.”

‘Fair warnings’

The overall average charge for an individual return is $216.31, according to the 2018 fee survey from the National Association of Tax Professionals. The average set dollar rate per hour was $126.43, and more than one out of three respondents raise fees every year and 32 percent raise them every two years.

Prices plateaued for a while according to some surveys. Earlier this year, most preparers contemplated a hike of about five to 10 percent for next season.

“With fair warnings about fees, everyone understands that the cost of living goes up, and with the complexity of the Tax Code in recent years and the last-minute tax changes, people understand that fees continue to rise,” Kathy Hettick, a past president of the National Society of Accountants told news outlets about the public’s reaction to rising fees — almost three years ago.

‘I know someone …’

The best a preparer can do is be as clear as possible. Be available throughout the year for consultation, Nemeth recommended, and explain tax strategies as they apply to the client’s circumstances. “If the client is wavering,” he said, “I’d offer, ‘If you switch to a lower-price preparer, when you get letters from the IRS, why don’t you bring them by so we can analyze them and see what the other guy did?’"

“I’m trying to retire and am shedding clients, so my answer today is, ‘Go for it,’” said EA Bill Nemeth at Tax Audit Guardian in Atlanta. “When I was actively running a tax business and I wanted to keep the client, I’d reinforce all the things I am doing for them and ask if the other preparer is going to engage to the same level.”

Jeff Gentner, an EA in Williamsville, New York, has “a standard answer. When a client says, ‘I know someone who will do it for less,’ I respond, ‘I know someone who will pay more.’ It’s true. I never argue with a client who feels they can do better somewhere else. If they don’t want me, I do not want them.”

And if they walk, maybe it’s lucky. “If all they’re looking for is to save a buck with another provider, then I don’t want those folks as clients anyway,” Primeau said.

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Tax preparation Tax preparers Enrolled agents Client strategies Tax season National Society of Accountants NATP
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