Many client relationships start with a consultation of some sort, as you both get to know each other and you gather information to better understand their situation and their tax needs. It’s a very useful meeting on both sides, but it may leave some tax professionals wondering whether they can charge for it.

About nine out of 10 practices offer a free initial consultation, according to a recent fee survey by the National Society of Accountants. But if you do charge, when should you apply that fee to tax prep work if the prospect becomes a good client?

“I don’t charge for an initial consultation – yet,” said Enrolled Agent Tom Figgatt of Figgatt Tax Services, Ridgefield, Conn. “First 30 minutes are free. It allows me to decline the client if I’m uncomfortable.”

Experience seems one solid teacher of whether to charge for a consultation and whether to apply that fee to subsequent tax prep work. EA Pamela Burda of Burda Books in Peninsula, Ohio, “rarely” charges. “My plan is to greet them with no charge to answer their initial questions. The clock starts after an hour,” she said. “It’s worked for over 20 years. On the rare occasion I charged an initial fee, the business didn’t pan out.”


Whether to charge sometimes depends on what happens after the meeting. “We don’t charge a fee for an initial consultation unless we’re actually doing something, like providing tax-planning advice,” said David Leidel, an EA in Sebring, Fla. “If the consultation is to meet us and find out what we need, we try to close that engagement at the meeting. Our process keeps us from meeting with too many [potential clients] who are just kicking tires.”

“Applying initial consultation fees to tax prep certainly helps clients come back for tax prep, but sometimes you may not want them back,” said California-based EA Crystal Stranger, author of The Small Business Tax Guide. “There often are clients that I’m interviewing as much as they’re interviewing me. I’m not sure if I want to commit to doing their work by giving them a credit.”

Mario Costanz, CEO of Happy Tax Franchising, believes a charge for an initial consultation should be applied to the tax prep fee “if the consultation was light. Most times a new client will just want to get to know you and ask a question or two prior to hiring you. In those cases, charging for a consultation is overkill. Where a client wants to do tax planning and go into detailed specifics on their tax situation, a consultation fee might be warranted. So long as it is discussed up front with the client, it can be handled either way.” 


First dates

EA Laurie Ziegler at Sass Accounting in Saukville, Wis., doesn’t charge for an initial consultation, a policy she said “has served me well. I’m usually able to use that meeting to turn it into a sale. Sometimes, it ends up that the prospect and I aren’t a good fit for each other, but my willingness to do a complimentary initial consultation still goes over well. I’ve even had occasions where the prospect gives my name to someone else.”

“I come from the sales background before becoming an Enrolled Agent, so I see the initial consultation more as a first date than as a service call,” said Kerry Freeman, an EA at Anthem, Ariz. “I don’t charge for the first meeting. I have to want to work them as much as they want to work with me. I make my money after the relationship starts, and my incentive is to have a very long relationship with the client.”

“But,” Freeman added, “there’s an old saying in sales: ‘Either you sell or you got sold.’ Sometimes I got sold on the consultation and did not make the sale.”

William Keats, an EA at Keats Tax & Financial Service in North Merrick, N.Y., does apply the fee for the initial consultation to the tax fee if the prospect signs on as a regular client. “There are a number of advantages,” he said. “It turns the prospect into a new, permanent (I hope) client. The relationship may also turn the client into a new referral source.”

Investment and understanding

Jeff Gentner, an EA in Amherst, N.Y., likes to keep filing fees separate from consultation fees. “Often, I get calls from potential new clients who’ve had a change in their situation. They want to evaluate options and see how these changes will impact their tax situation,” he said. “I’ve found over the years that keeping them separate works best for me since I don’t know for sure that they will eventually become full tax prep clients – nor do I want to assume so.”

“I usually invest 30 minutes of my own time with new clients either over the phone or in person assessing whether the prospective client is worth growing together with or not,” said EA John Dundon, with Taxpayer Advocacy Services, Englewood, Colo. “After about 15 minutes of pointed questions and discussion, I can tell if someone is worthy of being my client. Once I’ve decided to take on a new client, the intake process, including the initial consultation, is completed gratis.”

“If a new client is a referral from a current client, I always provide a free consultation and there’s no consultation fee added to their first prep fee,” said Kimberely Bates, an EA in Minneola, Fla., and Money Coach founder. “It’s good business to find out what the new potential client needs before accepting them as a new client. If a new potential client is not a referral, then we ask for a non-refundable deposit to reserve their appointment for consultation. After our consultation, if they become our client, the deposit is applied to the services they receive.”

EA Diane Beverly in Fredericksburg, Va., doesn’t charge for an initial meeting for a possible new client. “I’ve seen that if we meet and hit it off, then they will become a long-time client,” she said, “and most really appreciate the gesture.”

“Most clients understand that a consultation appointment is different from preparation appointment, so separate fees are most often expected,” Gentner added.

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