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Tax Engagement Letter
For the Preparation of Your 2010 Individual Tax Return |
Dear ,
This is an email version of our traditional engagement letter. In order to send this back to our office, click "Reply", go to the last page, type in the date and your name. Then, click "Send". You may print it for your records or save it electronically. Please call as soon as possible to schedule your tax appointment. By so doing, you are indicating your acceptance of the terms and objectives of our engagement and the nature and limitations of the services we will provide.
We are pleased to confirm our understanding of the arrangements for your income tax return(s).
We will prepare your 2010 individual federal and state income tax returns and 2011 estimated tax forms, as necessary, from the information you furnish.
It is your responsibility to provide us with all the information required for preparing complete and accurate returns. You should retain all the documents, canceled checks, and other data that form the basis of income and deductions. Receipts or cancelled checks are required for all cash contributions, there are no exceptions. The documents may be necessary to prove the accuracy and completeness of the returns to a taxing authority. You have the final responsibility for the income tax returns and, therefore, you should review them carefully before you sign them.
Our work in connection with the preparation of your income tax returns does not include any procedures designed to discover defalcations or other irregularities, should any exist. We will render such accounting and bookkeeping assistance as we find necessary for preparing the income tax returns.
Your returns may be selected for review by taxing authorities. In the event of an examination or other IRS contact, we are available to represent you. Any proposed adjustments by the examining agent are subject to certain rights of appeal. In the event of such government tax examinations, we will be available upon request to represent you and will render additional invoices for the time and expenses incurred. Prices for these additional services will be communicated in a separate engagement letter.
You will submit your 2010 income tax information to us no later than March 31, 2011. If, for some unforeseen reason, your data is not complete at that time, we request that you submit whatever is ready and send or deliver the balance as soon as possible. Be aware that if you submit your data after the date requested, we may not be able to keep our commitment in terms of delivery. Ultimately you may be subject to late filing penalties because of this delay.
We will use our professional judgment in preparing your return. Whenever we are aware that a possibly applicable law is unclear, or that there are conflicting interpretations of the law by authorities (e.g. tax agencies and courts), we will explain the possible positions that may be taken on your return. Be advised that the IRS and Franchise Tax Board have adopted the "more likely than not" standard (51%) to replace the "realistic possibility of success" standard (33-1/3%). This has the potential of increasing taxpayer and preparer penalties. Therefore, we will adopt whatever position you request on your return so long as it meets the new standard or else we will use a special form in your return to disclose the position taken.
By your signature below, you agree that you have the proper records to substantiate all items of income and deductions, including travel and entertainment expenses, and that you will carefully examine and approve your completed tax returns before signing and mailing them to the tax authorities.
Congress has greatly limited taxpayers' deductions for travel and entertainment expenses. As such, conflicting regulations and laws have been passed. At present, the minimum record keeping requirement is that you maintain certain records relating to meals, travel expense, entertainment expense, vehicle use, and business gifts. The minimal substantiation must include the amount of the expense; the place of either the travel, entertainment, and so on; the date and description of the gift; the business purpose of the expense; and the business relationship of the taxpayer to the person being entertained or receiving the gift. Although not required, the government prefers that the information be kept in a diary, or in some chronological order. There is a strong need for this information to be kept current. Where possible, charge cards should be used and the above information shown on the back of the slip you maintain.
In our relationship, we are often advisors, not advocates, with regard to investment advice. We will advise you on the implications, if any, of specific matters you bring to our attention. From time to time during our relationship, you may seek our advice with regard to potential investments. We are not investment advisors. Accordingly, we suggest that you seek the advice of qualified investment advisors appropriate to each investment being considered. Unless otherwise specifically agreed to in a separate engagement letter or in a written addendum or amendment to this engagement letter signed by the parties, we will not advise you regarding the economic viability or consequences of an investment or whether you should or should not make a particular investment.
Federal law has extended the attorney-client privilege to some, but not all, communications between a client and the client's CPA. The privilege applies only to noncriminal tax matters that are before the IRS or brought by or against the U.S. Government in a federal court. The communications must be made in connection with tax advice. Communications solely concerning the preparation of a tax return will not be privileged. In addition, your confidentiality privilege can be inadvertently waived if you discuss the contents of any privileged communication with a third party, such as a lending institution, a friend, or a business associate. We recommend that you contact us before releasing any privileged information to a third party.
If we are asked to disclose any privileged communication, unless we are required to disclose the communication by law, we will not provide such disclosure until you have had an opportunity to argue that the communication is privileged. You agree to pay any and all reasonable expenses that we incur, including legal fees, that are a result of attempts to protect any communication as privileged.
When records are returned to you, it is your responsibility to retain and protect your records for possible future use, including potential examination by any government or regulatory agencies.
Our prices for this work will be at our regular hourly rates for the individuals involved plus direct out-of-pocket expenses including computer charges. Hourly rates are assigned, ranging from $130 to $295 per hour depending on the staff level and experience of the individual. Payments for services are due when rendered, and interim billings may be submitted as work progresses and expenses are incurred. We reserve the right to issue tax returns C.O.D. if there has been a past history of delinquency in payments.
If any dispute arises among the parties, they agree first to try in good faith to settle the disputes by mediation administered by an association such as the American Arbitration Association (AAA) under its Commercial Mediation Rules. All unresolved disputes shall then be decided by final and binding arbitration in accordance with the Commercial Arbitration Rules of an association such as the AAA. Fees charged by any mediators, arbitrators or an association such as the AAA shall be shared equally by all parties.
As your CPA, we collect:
1. Information provided by you from your tax organizer, worksheets, documents, and discussions
2. Information that we develop as part of the engagement
As your CPA, we are required to keep all information about our engagement confidential; so, we will not disclose any information about you unless we have your approval or are required/permitted by law. This applies even if you are no longer a client. As your CPA, we are committed to the safekeeping of your confidential information and we maintain physical, electronic, and procedural safeguards to protect your information.
We are pleased to have you as a client and look forward to a long and mutually satisfying relationship.
Sincerely,
KROWNE & PERAZZO
Certified Public Accountants
ACCEPTED:
By:_____________________
Date: ___________________
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