Letter of Engagement

[Peggy]

I have not been in business for too long and have not had clients sign engagement letters. Could someone give me a sample letter I could use? Thanks

[Bees Knees]

Engagement Letter

I use the following:

Letter of Engagement

I have engaged (preparer's name) to prepare my individual FEDERAL and
STATE of _______________ tax returns for tax year ended ______________.

1) I understand that my tax return will be prepared based on information I provide to the preparer. I will submit to the preparer all Forms W2, 1099, and any other documents relevant to completion of an accurate income tax return. If there are any amounts relative to my return that are not listed on an official form such as business mileage figures, other business expenses, cost basis of stock, noncash charitable contributions, or other itemized deductions, I understand that I am responsible for providing accurate amounts to the tax preparer. I will examine my tax returns before mailing to make sure that all amounts reported on my return are accurate.

2) I understand that federal, state, and local taxing authorities may audit or adjust the amounts reported on my tax return, and it will be my responsibility to produce documents or other means of verification supporting any items in question. I understand that I will be responsible for any additional taxes, interest or penalties resulting from disallowed deductions, unreported income, or other adjustments or assessments made by taxing authorities.

3) I understand that in the event of preparer error, I will be responsible for any additional tax due, and that the preparer’s responsibility for payment is limited to additional interest or penalties resulting from the error.

4) I understand that my tax returns will be prepared based solely on information I provide, and that the preparer has not audited or otherwise verified the information contained therein. If I present my tax return to any third party for any reason, I will notify that third party that the preparer holds no responsibility for accuracy of the amounts reported, and offers no assurance with respect to any item reported on the return.

5) I understand that the fee for the tax return covers the tax return only, and any other services provided by the preparer such as representation or preparation for audit, other communications with taxing authorities, or tax planning services will be billed at the rate of (insert your hourly fee) per hour.


Understood and Accepted by

Signature

Date

[Unregistered]

Engagement Letter

You know, I use the engagement letter that prints with CCH Profx's tax software and I have to say that yours is far more clear for the layman to understand than the one that I use. I may just copy yours and chuck the automatic one.

[Gretel]

Engagement Letters and other additional help

Brad,

I really like the generousity of all of you who give all the information and help so willingly and freely. No secrets left for someone else to make big bucks because people like me feel so intimidated by all the things you should have in writing and are afraid not using the proper wording.

Thank you.

Gabriele

[Brad Imsdahl]

Brad,

I really like the generousity of all of you who give all the information and help so willingly and freely. No secrets left for someone else to make big bucks because people like me feel so intimidated by all the things you should have in writing and are afraid not using the proper wording.

Thank you.

Gabriele

Thanks for the compliment. Actually, Paul and I use to do this prior to our being purchased. We use the message board to keep in touch with our colleagues. The old TMI from years ago was a tax preparation firm located in Hopkins. We had up to 30 tax preparers go around to various TCF Savings and Loan offices during tax season. I worked in the main office on 10th and Main Street in downtown Hopkins. Everyone would come in to ask each other questions on various tax situations they had with clients. It was normal for all of us to share information with each other. When Paul and I started the old message board about 6 years ago, that was the idea we were trying to re-create. An online tax office where pros can ask each other questions about client situations without the paid advice factor obscuring the process. We also get a feel for the types of questions others have and what will make our book better by covering those questions.

[Richard]

Our Engagement Letter

I have not been in business for too long and have not had clients sign engagement letters. Could someone give me a sample letter I could use? Thanks

Rather than type or copy-n-paste, here is a link to our letter.

http://www.themasterstaxservice.com/images/EngagementLetter.pdf

Our attorney suggested that we add an indemnity statement which I believe relates to someone else sueing us because of errors in their return. I'm still deciding what to do about that.

[Lion]

Letter

Thank you very much for sharing your letter with us. By the way, your whole site is nice.

[Steve]

Thank you

Thanks Peggy for sharing this letter I have been trying to get one of these letters for 4 years now and you are the first to actually share yours with anyone. Thanks again

[taxfun]

Our engagement letter

We are very pleased that you are considering our firm to provide services to you. This letter is to confirm our understanding of the terms and objectives for our engagement and the nature and limitations of the services we will provide. This engagement letter covers only such services specifically mentioned in it. We are required by our professional E&O insurance carrier to have an engagement letter on file for each client.

We will perform the following services:

Prepare the federal and state(s) income tax returns, with supporting schedules based on the information you furnish. We will not audit or verify the data you submit. In regard to your business, our procedures are not designed to disclose defalcations or other irregularities, should they exist.

We may need clarification on some issues, and we may need to do some bookkeeping, at our discretion, in order to develop complete and accurate returns. We are providing you with the attached organizer which may help you in gathering information needed to prepare your returns. Your completion and use of the organizer will aid us in finding as many allowable deductions and other favorable information as possible, which can be incorporated into your returns. We find that the organizer can remind you of income and deductions that you may have otherwise forgotten. However, it is up to you whether, or not, to use the organizer.

Perform any bookkeeping necessary for preparation of your tax returns. The amount of bookkeeping, if any, is dependent upon the completeness and accuracy of the data (business books and records) submitted to us.

Regarding certain business expenses, the law requires that any deduction for business meals and entertainment must be substantiated by records indicating the amount, time, place and business purpose of the expenses. The tax laws require that meals and entertainment be separately accounted for. Contemporaneous substantiation of business use of "listed" property, which includes vehicles, personal computers and cellular phones, is required. If you claim a deduction for those types of expenses, you represent, by submitting those expense items to us, that you have the required records and receipts.

We will use our judgment in resolving questions where the tax law is unclear or where there may be conflicts between the taxing authorities interpretations of the law and other supportable positions. Unless otherwise instructed by you, we will resolve such questions in your favor, wherever possible. Where major issues arise, we will coordinate with you.

You are responsible for advising us during the year of any significant changes in your income, so that estimated taxes can be adjusted accordingly. We are not responsible for situations where additional tax, penalties and interest accrue due to higher income than we estimated when your prior year tax returns were prepared. You are also responsible for the proper recording of transactions in any books of accounts and for the substantial accuracy of financial records and data furnished us. This includes acquisition dates and basis for stock and bonds.

If you have a substantial number of trades, please call us prior to setting up your preparation interview, as we have some suggestions that may be able to save you significant tax preparation costs.

You have the final responsibility for your tax returns and, therefore, you should review them carefully before you sign and file them.

Your returns may be selected for review by the taxing authorities. Any proposed adjustments by the examining agent are subject to certain rights of appeal. In the event of such tax examination, we will be available, upon request, to represent you. Our services and expenses incurred in the audit process are additional services and the cost of such are not included in your tax preparation fees. In the event that an audit results in additional taxes, interest or penalties, for an error of omission or commission by you, our company shall not be responsible for payment of such. Payment, if any, is your responsibility. In the event that additional tax, interest or penalty results from an error made by our company, we will be responsible for the reimbursement to you of the penalties; however, you are responsible for the payment of any taxes due, as well as the interest, since you had the use of the money in the interim.

Our fees for tax preparation are based on the number and type of forms, schedules and exhibits and states involved. If additional services are desired, such as developing personal or business financial statements, entering a large number of stock market trades, or bookkeeping (as in Schedule C businesses) in order to organize the data for tax preparation, or business consulting, charges will be based on the number of hours required to accomplish such, at our Standard Billing Rates for the personnel assigned to the engagement.

Fees are due and payable when your return is completed and full payment is required when delivery of your return is made. Our fees contemplate your active participation in the process and the appropriateness of our recommendations and work depend upon the reliability of the data you provide us. Our liability, if any, for the performance of the above services shall not, in any event, exceed the amount that you have paid us for fees for our services under this agreement.

Mediation: In the event of a dispute related, in any way, to our services, our firm and you agree to discuss the dispute and, if necessary, to promptly mediate in a good faith effort to resolve the issue. We will agree on a mediator, but if we can not, either of us may apply to a court having jurisdiction over the parties, for appointment of a mediator. We will share the mediator's fees and expenses equally, but otherwise, we will bear our own attorneys' fees and mediation cost.

Participation in such mediation shall be a condition to either of us initiating litigation. In order to allow time for the mediation, any applicable statute of limitations shall be tolled for a period not to exceed 120 days from the date that either of us first requests, in writing, to mediate the dispute. The mediation shall be confidential in all respects, as allowed or required by law, except our final settlement positions at mediation shall be admissible in litigation solely to determine the prevailing party's identity for purposes of the award of attorneys' fees.

If the foregoing fairly sets forth your understanding of our engagement, please sign this letter in the space provided below and provide us with one signed copy. You may bring the signed copy to your first tax preparation interview, or you may send it, as you wish; however, we cannot complete your return without a signed engagement letter.

Thank you very much for your business. We look forward to serving you.

Sincerely yours,