Do Not Sell Yourself Short in Representing Clients

From my interactions with the tax professional community, I believe a lot of you sell yourself short with how you price your services.

Low prices mean more work to meet revenue goals and more work interferes with your ability to have appropriate work/life balance. Overwork is a chronic disease in our profession and causes our clients to not get the best service, which I have written about previously.

For tax preparation, I can see why many do underprice services. With the advent of commercial tax preparation programs, and pressure from low-priced competitors, it is easy to slip into the mindset of “I need to keep prices low to compete.” I disagree. Enrolled agents, who are licensed professionals, can (and should) demand appropriate fees for tax return preparation based on the complexity of the issues and the value provided by the peace of mind that tax matters are handled competently and professionally.

For tax representation, enrolled agents who are skilled in representation work should command premium pricing for services for the following reasons:

• Tax representation is a niche area of practice. Unenrolled preparers are limited in what they can do. Other Circular 230 practitioners may have the ability to represent, but many either choose not to do so, or have insufficient knowledge and skills to work a representation case effectively.
• A taxpayer will pay a premium price for tax services if the taxpayer can see the value in the representation services provided. With representation work, demonstrating that value (which often can be substantial) is often straightforward. For example, penalty abatement reduces or eliminates penalties, offers in compromise settle tax debts for less than is owed, and audit representation reduces or eliminates proposed tax adjustments.

After the constant tax law changes since the dawn of the COVID-19 era, many enrolled agents are considering other sources of revenue to supplement, or even replace, tax return preparation. Tax representation is a great field where enrolled agents can make a difference and earn great fees for doing this work.

Of course, to do good work in the tax representation area (and command good prices), you need knowledge and experience in addition to a credential authorizing practice before the Internal Revenue Service. The National Association of Enrolled Agents National Tax Practice Institute™ (NTPI®) is a great first step into representation practice. The recently revised curriculum gives sufficient knowledge to students so that they can begin taking on representation engagements at each stage of the three-level program.

If you are already an NTPI Fellow®, and you took the program a long time ago, then I encourage you to take it again! IRS practice is always evolving, and I bet you will learn many things you did not know even as a seasoned enrolled agent.