When software shortens the preparation, the billable hour is still a record of time someone actually spent. The text a tool writes is a draft. The practitioner who will sign the work reviews the facts, the citations, and the calculations before that work goes to a client or to the IRS.
Time actually spent
That standard is IRS Office of Professional Responsibility Alert 2026-19, dated June 24, 2026. Circular 230 § 10.22 requires due diligence in preparing, approving, and filing papers, and in representations to the Treasury and to clients. When a generative tool is in the file, the practitioner thoroughly reviews the documents and the language the tool created.
The alert says practitioners cannot rely solely on AI. Treat the written text that AI generates as a draft. The alert says technology serves as a tool, not a substitute for professional judgment, and that final decisions rest with qualified professionals.
The same alert, on Circular 230 § 10.27(a), says a practitioner may not charge an unconscionable fee in connection with any matter before the IRS. A tool can shorten research and drafting. Billing for manual labor or for time that was not actually spent, or double billing for an AI-assisted task, may violate § 10.27, depending on the facts. Examples in the alert are a noticeable pattern across clients, or the size of the billing difference.
Cost savings should be passed on openly. Disclose the AI activities, in general or specific terms as needed, and fairly credit any cost reduction to the client’s account. Hourly billing is still a method a firm may use. The warning covers an invoice for minutes the file did not take.
Methods in use
Firms are already mixing methods. The AICPA and CIMA news release of September 10, 2025, from New York, describes a slow but steady increase in value and fixed pricing, offset with a decline in traditional hourly-based billing, as firms embrace technology and expand service offerings.
The counts are in the 2025 MAP executive summary from the AICPA Private Companies Practice Section and CPA.com. The survey was fielded from May 5 through July 18, 2025. Firms reported fiscal year 2024. More than 1,400 firms answered some questions. 1,073 completed the survey.
Hourly billing is used by 63% of responding firms. A per-tax-form fee is used by 40%. Value billing is used by 30%, up five percentage points since 2022. Fixed pricing is used by 29%, up four percentage points. A firm can use more than one method, which is why the four figures add to more than 100. They are not shares of revenue.
The summary says firms are slowly moving away from hourly billing to value-based engagements, in an effort to reflect the expertise and outcomes provided to clients, and not just the time spent. The release says the shift aligns with client expectations, technology investment, and the value and type of services.
In the same summary, 40% of respondents said they had not yet figured out how to track efficiencies from technological advancements. 61% said they had raised fees to factor in higher technology investments. The question for the firm is how to price work whose preparation got shorter, when the firm still cannot see the efficiency. These percentages describe the MAP respondents. They are not a billing study of law firms, agencies, or design practices.
A stated price
A stated price for the return is a different arrangement from a contingent fee. Under ET § 1.510.001 of the AICPA Code of Professional Conduct, a contingent fee is a fee charged only if a specified finding or result is attained, or a fee whose amount depends on that finding or result.
A member shall not prepare an original or amended tax return, or a claim for a refund, for a contingent fee for any client. The same rule bars a contingent fee from a client for whom the member or the firm performs an audit or a review of a financial statement, a compilation in the circumstances the rule names, or an examination of prospective financial information.
Fees may vary with the complexity of the services. A price that moves with the tax result is the arrangement the rule restricts. Calling the fee value pricing does not place it outside the rule. This is a reading of the rule text. It is not advice on one engagement.
On Monday, write down the methods the firm already uses. Keep the signer on the draft. Take off the invoice any minutes the file did not take. If the firm states a price for the return, keep that price off the tax result.
A fixed fee is one way to charge for the return without invoicing minutes the file did not take. The alert requires no particular structure. A firm that still sells time has to sell time that was spent.
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Steven de la Fe, CPA, is a co-founder of Precision AI OS (https://getprecision.ai/industries/cpa-firms?utm_source=cpapracticeadvisor&utm_medium=byline&utm_campaign=nov12-price-per-deliverable) and a CPA with 20 years of tax and accounting experience, including seven years at PwC.
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