Every tax season, firms bill their clients for hours spent preparing returns, checking figures, and filing paperwork. That has always been the backbone of the tax, audit & accounting business. However, there is a shift going on, and it will force firms to answer a harder question: If a machine can do the compliance work, what exactly are clients paying for?

The data suggests the answer isn't technical skill; instead, it's presence, judgment, and trust — and unfortunately, most firms haven't figured out how to price for any of those.

The work clients complain about isn't the work you'd expect

The recently released Year-Round Tax Advisor Report, published jointly by the Thomson Reuters Institute (TRI) and Jump, found that when clients are dissatisfied with their CPAs, fees are almost never the reason. Errors and missed items, poor communication, and a lack of proactive planning account for more than three-quarters of clients' complaints, while fees rank a distant fourth, cited by less than 10% of dissatisfied clients.

Clients who expressed any tax-related fear were 3.6-times more likely to be unhappy with their CPA, and that pattern held across every fear type the study measured, from surprise tax bills to capital gains anxiety to RMD confusion.

The issues clients are having, according to the data, isn't the return itself; instead, it's the sense that they hope someone catches a problem before it becomes a surprise. Tax strategy came up in at least 79% of advisor-client meetings every month of the year, not just during filing season, according to the Tax Advisor Report, and clients initiated those conversations more often than almost any other planning topic.

Clearly, the demand for a year-round advisor relationship already exists. The question is whether the CPA meets it, or whether a financial advisor becomes the client's real tax resource instead.

Compliance work is commoditizing, and firms know it

TRI's 2026 State of Tax Professionals Report shows the profession is aware of this shift, even if pricing hasn't caught up. More than 70% of firms already automate up to a quarter or more of their tax workflows, and much of the routine work is being absorbed faster than the pricing model is adjusting to it.

Yet, tax firm profit margins show a different picture. Individual tax return preparation remains the highest-margin service that firms offer, with a 28% profit margin. Advisory services — such as business consulting, decision support, tax strategy, and financial planning — all land in the 20% to 24% range, despite almost three-quarters of survey respondents saying their clients strongly want a trusted advisor relationship rather than just someone to file their taxes.

Indeed, tax firms are already sitting on the service that clients value most, yet they are pricing it lower than the routine work that AI is best positioned to take over.

Hourly billing is still the dominant pricing model, used by 78% of firms, as they continue to tie pricing to time spent rather than value delivered. That model made sense when the return itself was the hard part; but now, it makes far less sense when what actually sets a firm apart in the client's mind is catching something on their return before they even know to ask about it.

Clients are already grading firms on this

Today, clients are no longer just hoping their tax professional uses AI well, according to the Thomson Reuters Future of Professionals Report 2026. They're actively judging firms on it. Almost 90% of corporate tax clients say it's very important, or even essential, to receive AI-enabled quality improvements from the outside tax, audit & accounting firms with whom they work. In fact, nearly one-third of clients are already reconsidering, or planning to reconsider, their external firm relationships within the year.

Clearly, clients aren't asking firms to automate for automation's sake. They're asking whether the firm is still catching problems as the routine work gets faster.

None of this, of course, means that firms should panic about being replaced. However, it does mean they may need to focus on a strategic direction. They can go one of three paths: i) use automation to free up experienced people for advisory work; ii) use the extra capacity to serve more clients at the same headcount; or iii) rebuild the model around ongoing insight instead of once-a-year compliance.

Not matter which path is chosen, what doesn't work is drifting between all three while still billing by the hour for work that AI tools can now finish in minutes.

Tax firms are already sitting on the service that clients value most, yet they are pricing it lower than the routine work that AI is best positioned to take over.

Those tax firms already succeeding at this transition share a pattern. They've stopped treating tax strategy as a once-a-year event and started treating it as a year-round relationship. They've moved toward value-based or retainer pricing that reflects judgment rather than time spent. And they've been deliberate about which client fears, which niches, and which moments of proactive outreach are worth building a service around.

Already, it's showing up in the numbers: Firms with the highest profit margins use value-based pricing 61% of the time, compared with 54% among the lowest-margin tier, a gap that tracks the shift from billing for time to billing for judgment almost exactly.

So if AI tools can now draft the return, flag the anomaly, and model the Roth conversion scenario in seconds, what are you charging for? The answer that it's no longer the mechanics of the work; rather, it's the relationship that catches the surprise before it happens, the advice that arrives before the client knows to ask for it, and the judgment that a tool simply cannot replaced.

Tax firms that build their pricing around that reality will be better positioned as routine work stops being a billable item on its own.

You can find more about the challenges facing tax, audit & accounting firms here