Many CPA Firms Are Turning Away Individual Tax Clients: How It Creates an Opportunity for Others

In recent years, a surprising trend has emerged in the accounting profession: many CPA firms are no longer accepting new individual tax clients. This shift has opened a significant market gap—one that creates a major opportunity for firms willing to step in and serve these individuals.

1. Why Firms Are Turning Away Individual Tax Work

Several industry trends are driving this change:

Capacity Strain and Staffing Challenges 

The accounting talent shortage means many firms are stretched thin during tax season. Partners often prioritize higher-value corporate and business engagements (recurring revenue), leaving little bandwidth for new personal returns.

Focus on High-Margin Services

Firms are gravitating toward advisory, CFO services, and niche consulting that command higher fees and offer year-round revenue, rather than seasonal, lower-margin tax prep.

Workflow Efficiency

Individual tax returns often require chasing down documents, dealing with last-minute submissions, and managing price-sensitive clients—issues that don’t align with many firms’ push toward streamlined, predictable workflows.

Diversification and Valuation

Many smaller firms do not want to become overly reliant on individual tax work for fear that it will vanish once AI improves.  Also, many of the larger firms (potential buyers) place a higher valuation on recurring revenues and attractive niches and do not want more 1040 clients, especially one's that large firms consider low priced 1040s.  

2. The Market Gap This Creates

For individuals looking for tax help—especially those who have outgrown DIY software or have new complexity in their returns—finding a CPA firm willing to take them on has become frustrating. They often hear:

* “We’re only accepting business clients.”

* “We’re already at capacity for this season.”

This scarcity creates **pent-up demand** among taxpayers who want a knowledgeable, credentialed professional to handle their return. Many of these individuals are willing to pay a fair price for quality service, and they’re likely to remain loyal year after year.

3. Why Welcoming New Individual Tax Clients Can Be Profitable

While some firms see individual returns as “low value,” others view them as a **gateway to lasting, lucrative relationships**. A new tax client today could become:

* A high-net-worth client needing estate and financial planning

* A client willing to post a glowing review on Google and Yelp 

* A long-term recurring revenue stream if they meet certain criteria (income threshold, work in certain industry, etc.) 

4. Strategies for Capitalizing on This Opportunity

If your firm is willing to welcome new individual tax clients, you can stand out in today’s market by:

* **Making It Known You are willing to accept New 1040 Clients**

Update your website, Google Business Profile, and social media to clearly say you are accepting new individual tax clients.

* **Streamlining Intake**

Use online forms and checklists to gather information upfront and demand pre-payment.  

* **Offering Tiered Pricing**

Create pricing packages for different complexity levels so clients self-select the right service tier.

5. The Bottom Line

As many CPA firms close their doors to new individual tax work, a **window of opportunity** has opened for those willing to welcome these clients. By positioning your firm as accessible, responsive, and efficient, you can capture a loyal client base that others are leaving behind—and turn “one-time” returns into lasting, profitable relationships.