Does your CPA charge you for a few questions over email?

Question

So recently, I was going to use a CPA for a corporate tax return. He outlined that book keeping was $45/hr and corporate tax would be $500, and any additional costs to file to USA would be determined later. I told him I am all new to this and pre-revenue at this moment and I'd like to ask a few questions and asked if I could count on him to help me through a little bit of book keeping and he encouraged me to ask some questions by ending with "If you have any more questions, don't hesitate to ask". Weeks go by, I ask about 4 questions throughout the span of 2 months. He then suspiciously asks for my corporate legal entity name and address then proceeds to send me a full page about "this is not how it works and I am going to take legal action against you if you don't pay this invoice of $210". He never outlined his consultation service costs, and I have not made any agreement/contract to take on his services. I did not know that these emails were going to be charged and I did not demand for him to answer these questions. I found a new CPA and he is charging me even less at $450 for the corporate return and told me that he won't charge for consultation at all and encourages me to ask questions. The new CPA even told me directly that he will not charge for asking questions and feel free to email him. I am currently disputing with the other CPA over emails about this charge, what do you guys think?

Ryan Lane · Answer

I would say you can assume most interactions are billable. It’s at the discretion of the practitioner to not bill certain work. But CPAs make money by selling their time. To boot, I’d say that $450-500 is fairly cheap for quality corporate tax services. Particularly with any foreign work involved.

Michael Plaks · Answer

@Larry Belt

I don't consider this practice normal. But neither do I consider $80/hr normal, I consider it to be very low.

Whatever the charges are, the key for me is whether they were disclosed and agreed upon. If they were clearly stated, and you proceeded to work with this CPA, then you essentially agreed to pay these fees. At least his overhead fee was in this category, as you mentioned.

If the fees were not previously disclosed, then maybe it's a problem. I recommend to always start by bringing it up to the CPA himself. Maybe there's some miscommunication that can be easily fixed.

Eamonn McElroy · Answer

I always tell prospects that ask that question: "Assume everything is billable.  Sometimes I don't charge for an email or phone call at my discretion, but that is the exception to the rule, not the rule itself."

Tax professionals, attorneys, etc.  Our time is how we make money.  If we didn't charge for emails and calls, for all clients (because it would have to be all clients to be fair right?), we would be working for free for a large chunk of the year.

If you are a non-resident alien (I can't tell but I think you're hinting in your post), you'll want to make sure your CPA is well versed in the US tax obligations applicable to that fact pattern.  The penalties for even non-negligent non-compliance in this area are large.

Linda Weygant · Answer

I agree with @Basit Siddiqi - it's all relative.

I tell my clients that asking questions is generally free, if they send it in an email and it's not urgent and it doesn't require me to perform calculations or perform any research.  I prefer email questions because I can put off answering until I have time rather than having my work interrupted with a phone call.

For example, if a client asks "how does a 1031 exchange work", I can actually just copy/paste some information I have on hand about that and send it over and I don't bill for that kind of questions.  (That also comes with a referral to a great 1031 facilitator)

But if they say "I'm thinking about doing a 1031 on 123 Main St, how much would my tax liability be if I just sold it outright instead?", that's completely different.  I then bill out for answering that questions because I need to perform calculations and consider many different facets of their particular situation before I answer the question.  However, I do always let my client know when they've asked a billable question and make sure I have their consent before I start work.

I think what happened for the OP is that the questions were becoming too frequent and too time consuming (in the CPAs mind).  Or perhaps came on a deadline day or otherwise caught the CPA at a bad time.

Bob B. · Answer

Neither my CPA or Attorney charge me for an email or short phone call.

Michael Plaks · Answer

@Larry Belt

There're no industry standards in what you're asking about. For example, in my firm it's an all-inclusive annual service, and we do not count questions or minutes or tasks. In other firms, you will be on the clock, but everyone has his/her own way to manage the clock.

What's important and apparently was not done in your situation is a discussion of how the charges are done with this particular accountant and a common understanding upfront. Chalk it up as a lesson learned.

Scott Mac · Answer

You changed CPA's over a $200 invoice... ???

The one's I've known ALL charge for book keeping guidance.

It's like going into the 7-11 and expecting free coffee and doughnuts because you fill up your car.

It's part of what they "Sell" to make a living.

Natalie Kolodij · Answer

Depends on what the engagement letter says and how the firm operates. I worked for CPA firms that billed hourly for ALL work. So if an hour of my day was just "answering quick questions for clients" and not putting it down as billable.

I'd look bad. In tax firms often your raises/ bonus/ ect  (like many jobs) are based on your profitability. So having it look like I did 7 hours of work vs. 8 was not great.

Now, the Parnter/Manager can write that time off (Chose to not charge the client)- if it's a good client they often would.

But as mentioned above the starting point is if you're hiring someone for their skill/time- assume you pay for such.

At this point now that I have a firm it's structured where it's inclusive- and it's so we don't deal with this pain point and can plan/communicate without surprise billings later.

But a lot of firms don't do inclusive pricing- and so time= billing.

Examples of things I think firms would / woudln't charge for:

Wouldn't:

How much gain can I exclude if me and my husband sell our primary home we've been in/owned for 6 years?

vs.

Would Charge:

I have lived in a primary home with my husband for 1 year. My husband bought it 25 yaers ago. We spent 2 of those years living oversears before we moved back into it. It was rented while we were over seas. Also the basement is an air bnb. He bought it for $185,000 and I think we can sell for $793,000 -Can you tell me how much gain we'll have?

Ming Ip · Answer

He was out of line. He switched on me, after saying "please let me know if there is are any other questions I can help you with". Then sent me a $210 invoice without telling me his consultation costs, and threatened legal trouble. My cousin is a small business lawyer, and he sent him a letter about what he did wrong and that this invoice is disputed and that I am not to be charged. The CPA ended up not charging me and that was that. Happy ending 😎

Michael Bravo · Answer

Tell that first CPA to F off. Ignore his letters and that of his attorneys, if they come. If he sues you in small claims court, show up, argue your case, and win. CPAs are turning into lawyers...and we all know how highly lawyers are esteemed.

Does your CPA charge you for a few questions over email?

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