Monthly Archives: July 2019

Charging for Additional Services for Tax Resolution

Hey, it’s Michael Rozbruch here, founder of Roz Strategies, and what do you do after you’ve been retained and you discover there’s additional work to be performed that you never included in your engagement letter?

We call this additional services or an additional service request.  You’re going to get clients, Tax Resolution clients who come to you who you’re gonna be able to sell the entire case at one meeting or in phone call.  In other words, you’re gonna sell all these phases at the same time, which is investigation, compliance work and the permanent resolution.  But let’s say you get a client who comes in.  They say that have two years of unfiled returns.  You’ve taken them through a mini 433-A, and you’ve determined they’re great Offer and Compromise candidates.  So, you get retained.  You do your Engagement Letter.  You’re retained for two years.  You’re retained for the Investigation, two years of tax prep and an Offer and Compromise.  And you’re working the case.  You’re getting the transcripts, and after you analyze the transcripts, you determine, hey wait and second here, there’s five years of unfiled returns.  There’s an extra three years of unfiled returns that you haven’t been contracted for, that you haven’t been paid for.  Well that’s an additional service that needs to be paid.  You need to go back to the taxpayer and let them know that these three years need to be filed.

Now, the way to do this correctly is to include in your Engagement Letters a paragraph that says your flat fee, your fixed fee is predicated upon the representations that the taxpayer told you at the time.  And if additional services are required to permanently resolve your taxpayer’s problem, that additional fees will be requested at that time.  And I did this for 16 years and that additional service piece represented millions of dollars in extra income.  So, don’t be bashful.  Don’t be shy to go back to your client to request payment for additional services you haven’t been contracted for.  If you don’t know how to approach the client when it comes to requesting additional services, all you need to do is say, hey, let’s say the client’s name is Joe.  “Joe, we were contracted to do two years of tax prep for 2014 and 2015 and do your Offer and Compromise.  After we got your tax transcripts and records of account from the IRS, it’s apparent that there are another three years that haven’t been filed, so we need to get those returns filed because we can’t do the Offer and Compromise until you’re in full legal filing compliance, and those three years are gonna be X-amount of money.  And what we’ll do is we’ll include that in the future recurring payments.”  So, we’ll spread that over the six payments that they’re paying you or the four payments or the eight payments. So, it’s not a big deal for your taxpayer, and you’ve just gotten additional services and you’ve gotten paid for the extra work you’re going to do.  So, that’s how you request additional services.  Again, don’t be bashful.  Don’t be shy.  Make sure your retainer agreement has a paragraph permitting you to go back for additional services if it’s required.  You don’t wanna be caught with scope creep because you’ve boxed yourself in on a flat fee.  Flat fees are great.  That’s what you need to do, but you need to cover yourself with a paragraph in your retainer agreement that lets you go back and get additional, to get paid for additional services.