Automate Your Billing
The IRS Office of Professional Responsibility recently put out guidance that should make every practitioner using AI sit up. The warning, in short, is that charging a client for time you did not actually spend, because an AI tool did the heavy lifting, could raise concerns about what the IRS calls an "unconscionable fee." The implication is direct. If AI made you faster, that savings should show up in what the client pays.
The AICPA is not letting that sit unanswered. Eva Simpson, the AICPA's vice president for Member Value, Tax and Advisory Services, pushed back publicly, arguing that the guidance's "should be directly passed on to the client" framing ignores the full economics of running a modern tax practice. Software licensing, implementation, governance, and the real cost of training a team to use these tools responsibly all sit underneath that so-called time savings. None of that is free, and none of it shows up in a simple hours worked calculation.
She is right, and practitioners should treat this as more than an industry dispute. It is a preview of a conversation you are going to have with clients whether the IRS settles the question or not.
Time-based billing has always had a hidden assumption baked into it: that the value of the work equals the hours it took. That assumption was already shaky before AI. A twenty-year practitioner who resolves a complex notice in forty-five minutes is not worth less than a first-year associate who takes four hours to do it worse. Experience compresses time. Nobody ever argued that should mean the experienced practitioner charges less.
AI just makes the same compression visible and constant. If the standard becomes "charge for the hours it actually took," you are not pricing expertise anymore; you are pricing inefficiency and rewarding whoever is slowest.
The honest answer is that pricing should reflect the value delivered and the risk absorbed, not the clock. A return prepared with AI assistance still carries the same professional judgment, the same signature, and the same liability if something goes wrong. The client is not paying for keystrokes. They are paying for a correct answer they can rely on, delivered by someone who stands behind it.
This is also the moment to formalize what many firms have avoided: pricing advisory and complex compliance work on value rather than time. If your billing model already reflects that, this fight barely touches you.
What to say when a client asks? A client will eventually ask, half joking, whether ChatGPT did their return. Have an answer ready that does not get defensive. Something close to this works: The tools changed how fast we can process information; they did not change what we are responsible for when we sign a return, and that responsibility is still the thing you are paying for.
Firms still pricing purely on hours are handing regulators a very easy argument.
Dr. Christine Gervais is a licensed CPA, using her skills to help businesses grow and achieve their fullest potential. Christine has a Master’s degree in accounting from Southern New Hampshire University in addition to holding her CPA license for over a decade. Notably, Christine is a nationally recognized speaker providing education to other CPAs on how to best serve clients as well as instruction on a wide variety of topics for business owners on how to maximize success. Christine prides herself on the value she can bring to clients with her extensive tax knowledge and provides strategic, forward-thinking financial strategies to help clients grow. When not behind her desk, you can find Christine spending quality time with her daughter and stepson or tending to the family’s excessively loved farm animals.
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