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How to Price Your First Tax Representation Case

Updated: Nov 5, 2023

Timalyn in a black shirt with glasses, sitting at a desk with a microphone.

How much should I charge?

This is a common question I get from tax professionals, new and seasoned. I also see it in various tax groups when it comes to tax preparation and tax representation. But I get it.

It took me a while to become comfortable with my tax representation prices. That allowed me to be confident in quoting clients and delivering value. Today I'm going to walk you through the process I use to price a tax representation case.

Note, that this is a framework. When it comes to pricing you have to do what works for your firm. You also have to be able to charge a price that is fair to both you and the client, and that you can say with confidence. There is a direct correlation between your prices and how you see your value in the marketplace. If your prices are too low I suggest you check out Establishing Your Legacy as a Tax Professional - Creating Your Roadmap Part II.

Confidence and understanding your value take practice. When you understand the value you bring you can put that information into a formula and get what you should be charging. Now, there is a debate in the industry about whether you should do hourly pricing or value-based pricing.

There are situations where both are appropriate. For example, if you are working on an audit you probably need to have a base price and then charge hourly. If you are new to the industry and have never removed a tax lien or levy. You have to be careful charging hourly. It's not fair to the client for your inexperience to affect the price. But at the same time, they should compensate you for your time. This is where you would want to offer a set fee or value pricing.

I am going to lay out the 3 things that you should take into consideration when deciding your price. Then I will walk you through collecting your whole fee upfront and in phases. As a little bonus, there is a sample price sheet at the end of the article.

3 Things to Consider for Your Tax Representation Pricing

When it comes to pricing you have to think like a business owner. You want to make sure that you have your costs covered when you charge a client. Keep in mind that yes, the price needs to be fair for the client but you have to eat too, right? You can't pour from an empty cup. So if you're not taken care of you won't be at your best when you are serving. Here are the three things that you need to take into consideration when setting your price:

  • Resources

  • Experience

  • Time

Your Resources

If you are starting out you may think that you should do work for free to get experience. I don't agree with that. If you are reading this article right now you paid to get the answers you are finding. That means the cost of this subscription is something that your business revenue should cover. This is an investment and you can't get a return on it if you do not charge accordingly.

You should factor this into overhead costs. Why? Because you may not know the answers yet but you have access to the answers in this community if you are in the Tax Pro's Representation Journey. If you just have the articles you can still ask questions in the comments. Have you purchased software? Do you have an office space? These are all resources that will help you streamline things in your business.

Starting out you may have to pay out of your personal funds. But these investments should be making your money. Setting the right price will allow you to do this.


Practice makes perfect, especially in representation. My first lien removal took me almost 8 hours. I did not have much experience and I was making all types of mistakes. I had to read and re-read the instructions. Then reach out to mentors. I charged $3,000 to become the POA, do the Transcript Investigation, and remove the lien. So I made roughly $375/ hr without taking overhead into consideration. Not too shabby, right?

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