Fee Schedule

[JohnH]

Here's an interesting link to an article on the subject matter of this thread:

 

http://www.cpapracticeadvisor.com/news/12065684/average-income-tax-preparation-fees-increased-in-2015?utm_source=CPA+Tax+%26+Compliance&utm_medium=email&utm_campaign=CCSN150414002

 

I like all the discussion about "averages".

Reminds me of my college statistics class, where the instructor said on the first day:

"If I place one hand on a hot burner and the other in the freezer, then on average I should be feeling pretty good."

Edited April 20, 2015 by JohnH

[BulldogTom]

Why wouldn't you charge more for an EITC return?

 

Which return is most likely to get you into trouble?

 

EITC returns.  From dependency issues, to who gets to claim who, to all sorts of other things.

 

When a simple return, with the addition of EITC goes from 4 pages to 16, its time to get paid for that.

 

Rich

Not saying you can't charge for the preparation of the EIC forms.  And you can charge however much you want for that service.  But the charge cannot be based on how much of a refund the client gets.  It is a fine distinction, but charging based on the amount of the refund on and originally filed return is a circular 230 violation.

 

You can charge by the hour, you can charge by the form, but you can't charge based on the amount of credit that comes from that form.

 

Tom

Newark, CA

[Jack from Ohio]

Not saying you can't charge for the preparation of the EIC forms.  And you can charge however much you want for that service.  But the charge cannot be based on how much of a refund the client gets.  It is a fine distinction, but charging based on the amount of the refund on and originally filed return is a circular 230 violation.

 

You can charge by the hour, you can charge by the form, but you can't charge based on the amount of credit that comes from that form.

 

Tom

Newark, CA

Courts disagree....

http://blog.aicpa.or...h.IpCB1xvT.dpbs

http://scholar.googl...t=6,36&as_vis=1

[Richcpaman]

Bulldog:

 

 

Listen to Jack.   I could charge my EITC Client 25% of the refund if I wanted.

 

I would not, but I could.

 

Rich

[Roberts]

My fee is determined by an analysis of all factors involved:

How the client first came to me.

Are they nice or jerks?

How much do they earn and how that relates to ability to pay?
Hours worked on the return and offseason time spent.

How complicated the return is to prepare

What did their previous preparer charge?

 

My rate for a 1040, A, B and D can be anywhere from $100 up to $750.

A 1041 can be anywhere from $150 to $1,000.

A 1040, A, B and D with Schedule E can be $250-$1,000+.

1065 can range from $125 - $1,000+

Edited April 20, 2015 by Roberts

[BulldogTom]

Courts disagree....

http://blog.aicpa.or...h.IpCB1xvT.dpbs

http://scholar.googl...t=6,36&as_vis=1

His suit is based on an Ordinary Refund Claim.  Not an originally filed return.  Two separate issues. 

 

You can charge a contingency fee on an amended return, but not on an originally filed return.

 

I just scanned these articles, but they seem to bear out my point. 

 

Tom

Newark, CA

[Gail in Virginia]

But if the charge is based not on the amount of refund, but the amount of EIC claimed regardless of whether that results in a refund, could that not be a fee based on risk assumed?  After all, with the due diligence requirements it seems to me that EITC is one of the riskier areas of tax practice and the more EITC claimed, the larger the risk of sizable penalties.  This is not my pricing model, but it makes sense to me in a way.

[JohnH]

I agree.  If I prepared returns claiming EITC, my fees would increase tremendously.  Problem is, I'd have trouble deciding on a fee structure that would adequately protect me. 

[Richcpaman]

I agree.  If I prepared returns claiming EITC, my fees would increase tremendously.  Problem is, I'd have trouble deciding on a fee structure that would adequately protect me. 

You could refuse to do any EITC returns.

 

I do some.  Not many.  Not an area I wish to be engaged in.  Anyone else who wishes to be, good for them. 

 

I do not charge EITC clients "more" because of EITC, I charge them more because the return is more complicated and subject to greater scrutiny by the several levels of government. 

 

If you wanted to make that premium $100 or $150, that is management decision. 

 

The preparer penalties can be stiff.  But I will never pay a nickel in EITC preparer penalties.  I don't swim in those waters.

 

So, the amount you would need to protect yourself isn't that high.

 

Rich