pricing of IRS notice resolution services

How do you charge for helping clients resolve IRS notice?
Do you use the same hourly rate as tax preparation or else?
Can anyone give me an idea how I should charge the clients for this?
If it is merely documents gathering and draft a letter, will you charge clients or just do it for free?
Thank you!

I have two rates. Regular rates if the IRS messes up and a premium rate if the client does. It would have to be a good client for me to do it for free. For those I charge (most of them) I charge an hourly rate and explain to the client that I do not know how long it will take. Clients usually set a maximum amount of time they wish me to spend before updating them, so they can decide how much more to spend with me.

I have two rates. Regular rates if the IRS messes up and a premium rate if the client does. It would have to be a good client for me to do it for free. For those I charge (most of them) I charge an hourly rate and explain to the client that I do not know how long it will take. Clients usually set a maximum amount of time they wish me to spend before updating them, so they can decide how much more to spend with me.

Thanks!
So, for regular rate, do you charge the same rate as the tax preparation rate or a rate lower than that?
My understanding is that part of the IRS notice resolution involves such things as document collections, etc the administrative work and part of it involves drafting response letters, etc. which is more premium.
So, I am currently inclined to charge a rate much lower than the tax preparation rate, such as $75/hour, etc.
Am I fair to myself?

I charge tax prep rates if it is the IRS' fault. I have never tracked it in detail but, if I did, I think the admin time for a return would be not all that different to the admin time for a notice etc. i am curious to see what others think. I spent the better part of thirty years as an employee, at varying levels of responsibility, before becoming my own boss three years ago. I have no employees and no partners.

Client's fault - based on time.

My fault - no charge

Software error - no charge

IRS or States' fault - no charge

Thank you to both of you for sharing your experiences!

I'm too nice in my billing. Anything related to the processing of the tax return (including helping the client with the id.me system) is included in the tax return price so I don't bill for it. Again, I'm too nice.

I never bill to just look at a notice. I want my clients to be proactive if they get a letter from the tax authority. If we need to respond to an IRS notice (i.e. CP2000), if it's my fault I of course don't bill, if it's the IRS' fault I might bill (it depends on the client and/or how mad I am at the notice), and if it's the client's fault I am absolutely happy to bill.

My billing rate for controversies is higher than my general tax rate. It's a more specialized service and in my opinion deserves a more specialized price.

I charge regular rate and I ask for a retainer of two hours worth upfront. I do explain to them why I do a retainer because it is hard to estimate the time spent on each incident.

I straightly enforce it because a friend/client refuse to pay me until the matter is resolved. I asked for payment when I sent in the entire response letter knowing that the IRS will have to make a response based on my letter. The job is "finished' from my point of view. I did not like client dragging on paying their fees, especially they are my friends. So after this lesson, I charge two hours upfront. If I end up using less time, I refund them.

A majority of my clients opt-in for my audit and tax notice protection plan for which I charge 20% of their tax prep fee. In those cases, I don't have to charge. I will send them an invoice for my time at full rate, zeroed out by a line "services covered under tax notice plan".

For everyone else, I typically bill for time at my normal rate off-season rate assuming I am doing the work after 4/15. Everyone once in a while I get a retainer if I don't know the client well or know they don't pay well.

Client's fault (delinquent, non-compliant, DIY situations that went bad) OR if it's for a period in which the client previously filed with another preparer:

I quote than a flat rate depending on the situation and the client. Usually $150 or $350 for simple situations, $750/$1200/$2400 for more complicated ones.

IRS/state agency's fault for a tax return year in which I provided service:

It's already built into my pricing and this way I make the same amount but clients resent me less. This is just my opinion and the way I operate and it has its pros and cons, but I'm happy with it.

I've seen an increase in nuisance notices from both the IRS and state. Neither the client nor myself did anything wrong. The most recent was from Illinois. They will give you a property tax credit on your primary residence, but you must provide a valid PIN, or property index number. The year I moved, no problem with two PINs. Client gets married. He and his spouse both had condos. I put in both PINs. Illinois has a problem with it because wife's maiden name is on the condo. I've never had this before. I guess the next client I should paper file and include tax bills and clients marriage certificate.