Form 8879
If you have accepted payment with a signed Form 8879, then you may have some exposure if you fail to file the return. Can you "hold off"? Probably. Waiting for the signed engagement letter is not "stacking" the returns in a file cabinet until you "get around" to submitting the e-file batch.
But once you get paid with a signed Form 8879, the IRS may take the position that you have to file the return. You could argue that the client has failed to properly retain you, and has not agreed to your general terms of service. But at a bare minimum, you end up in the same boat as BHoffman. With the due date approaching, if you can't get a hold of the client, you probably have a fiduciary duty to at least file an extension. Once that's done, you can confront the client, and say, "Look, I'm not signing your tax return unless you sign the engagement letter. So I couldn't file the return. I filed an extension for you."
If they won't sign the engagement, then you have to make a choice. Either tear up the return that you did and refund the money, or agree to do the work without them signing the engagement letter.
It sounds like you're fairly certain that in this case the client's failure to sign the engagement letter is an oversight, and not an objection. So all this is somewhat academic.
But my final answer is: You can't do nothing. You have to do one of three things:
(i) File the return, without the signed engagement letter;
(ii) File an extension, or
(iii) Return the payment, and inform the client that you cannot proceed until they sign the engagement.
But I really don't like (iii) when we're so close to April 18.
How did get yourself into this situation?
[LOL]
Get them to sign the engagement letter when they drop everything off... or was this all by mail, with no face-to-face contact?
BMK
If you have accepted payment with a signed Form 8879, then you may have some exposure if you fail to file the return. Can you "hold off"? Probably. Waiting for the signed engagement letter is not "stacking" the returns in a file cabinet until you "get around" to submitting the e-file batch.
But once you get paid with a signed Form 8879, the IRS may take the position that you have to file the return. You could argue that the client has failed to properly retain you, and has not agreed to your general terms of service. But at a bare minimum, you end up in the same boat as BHoffman. With the due date approaching, if you can't get a hold of the client, you probably have a fiduciary duty to at least file an extension. Once that's done, you can confront the client, and say, "Look, I'm not signing your tax return unless you sign the engagement letter. So I couldn't file the return. I filed an extension for you."
If they won't sign the engagement, then you have to make a choice. Either tear up the return that you did and refund the money, or agree to do the work without them signing the engagement letter.
It sounds like you're fairly certain that in this case the client's failure to sign the engagement letter is an oversight, and not an objection. So all this is somewhat academic.
But my final answer is: You can't do nothing. You have to do one of three things:
(i) File the return, without the signed engagement letter;
(ii) File an extension, or
(iii) Return the payment, and inform the client that you cannot proceed until they sign the engagement.
But I really don't like (iii) when we're so close to April 18.
How did get yourself into this situation?
[LOL]Get them to sign the engagement letter when they drop everything off... or was this all by mail, with no face-to-face contact?
BMK
Yeah it was a mail in return. Actually I don't have any of my clients sign the engagement letter until they pick their returns up. I believe I have been told here to get them to sign it when they drop off their info.
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