Bad pricing schemes:
1. Basing the fee on how much you will save the client.
One of the oldest tricks in tax resolution pricing is to charge on the amount you "save" the taxpayer thru the Offer in Compromise. While this pricing mechanism has some merit, the fact of the matter is the IRS will settle $100,000 for a $1,000 just as easily as if you owed $35,000. What you owe matters some - but not very much - if you don't have the ability to pay. You shouldn't overcharge for this -- the paperwork and the time committed by the staff are the same regardless of what you owe.
2. Charging a high fee - just because you're "big shots."
Tax attorneys among other higher name-recognition designations try to get away with a high fee - well - because they're "attorneys." Attorneys, Enrolled Agents and CPAS all have to do the same amount of work in examinations or collection's cases. And none of us have to go to "court." Tax attorneys should charge the same as E.A.'s and CPA's - the workload is the same.
3. Charging a high fee - because a relative can pay.
High fees sometimes are only paid - because a desperate person shakes down his/her family tree to get the funds. It is a high-risk proposition by some of these tax resolution firms to quote big fees - as they don't often get raised. However - when a family member can come up with $10,000 - well that's a nice pay-day for a commissioned sales person.
So let's review what WATAX charges for certain cases:
1040 Collections: you owe the IRS 1040 taxes and are in collections : $875 to $3750 - depending on the complexity.
Audits and Examinations: you are being audited or examined by the IRS for up to 3 years: $1500 to $5500.
941 Payroll Tax Representation: $1500 to $7500 depending on the complexity and whether business is dissolving or not.
