Engagement Notice

[JG EA]

I've been looking at engagement letters (many from the board - thank you very much for being so generous) and came to the conclusion I really don't want to do them except for Sch C clients, Corps, bookkeeping, and etc.

A new client that moved into the area had in last year's return a notice that a tax firm in another area puts into the client's completed package. It starts out by saying "if you accept this return, you agree...." or something like that. The client does not sign it. What do you think of that idea?

I do want to do something, but in reading over the variety of things that can be included in an engagement letter, I think it is impossible to put in everything. So, wouldn't just a phrase or two in the client letter be sufficient? "from the information you provide...I am preparing your tax returns only...I am not a financial planner..." things like that.

[taxmandan]

Engagement letter

I do a similar letter. Clients just didn't want to sign anything, so I print in a letter with the essence of: "This return was prepared with information provided by (TP) and has not been verified or audited by the preparer." "TP is responsible for the content and is advised to review the return for accuracy."

[Gretel]

Letter with tax return

Yes, I am one who refuses to save my but but anything that possible could happen. My engagement letter includes my privacy statement, which I am required to give to my clients each year. Besides one, no one had problems signing it.

I feel it's good to let the client know they have responsibilities as well as I do and make clear what they are upfront. Just putting it in a letter feels like doing something behind their back to me and looking for an easy way out. I would feel different if the letter is explained to the client, but I doubt that will be the case.

[Roberts]

Like it

I LOVE the idea of just putting the waiver into the tax return for their records. You could put a condition that once they sign the return or the e-file waiver that they agree to the conditions set forth as you described. Not sure it has the same legal weight if you don't put that condition in there.

A lot of emails have those notices at the bottom about privacy and the fact that if you open the email, you agree to the terms of the privacy agreement. A lawyer told me it was completely worthless because you can't read the terms or even see the warning unless you open the email which means it is worthless.

[jainen]

I don't understand

I don't understand most of this thread. We are all required to give clients our privacy policy in writing every year, but they don't have to sign it or even agree. I can't imagine what might be a problem, since none of us are selling client lists to telemarketers.

The engagement letter has little legal force in comparison to work actually performed. It doesn't give you any protection if you make a mistake, and it is totally irrelevant to the IRS. It's value is in setting up a professional relationship with your client, so you both are clear about your obligations.

[wsbjr]

Engagement Notice

Is there such a thing as a standard "privacy notice" that tax professionals are to provide clients, or does each tax preparer make their own?

[djack1040]

Standard Privacy Notice

Most all Tax & Accounting products companies sell such a mailer or brochure. There are two types: 1)Non-Disclosure (if you don't disclose any personal information) and 2) Disclosure (if you do disclose client's information for joint marketing purposes).

The rules state that you must notify clients in writing of your Privacy Policies at the beginning of your professional relationship and annually thereafter. (Graham-Leach-Bliley Regulations Act).

Requires all CPA's, accountants, and tax practitioners to be pro-active in protecting client information.

[jainen]

Gramm-Leach-Bliley

The Graham-Rudman Act required the federal government to not spend more money than it has. Two Republican administrations ignored it, so we threw them out and elected a Democrat who got it under control. But alas, well... never mind.

The privacy one is the Gramm-Leach-Bliley Act. For your further enlightenment (or perhaps my own) I will show you what I put on a green piece of paper with every return.

***
The privacy of your personal information has always been important to me. I treat client information in a confidential manner. I do not disclose any nonpublic personal information about my clients or former clients to anyone except with permission when needed to process transactions that a client requests or as required by law. I do not share personal client information with professional associates or third parties. I maintain physical, electronic, and procedural safeguards for your nonpublic personal information.

I receive nonpublic personal information about you from various sources including:
* Information that you give to me in direct interview, on tax preparation organizers and worksheets, and other forms and documents;
* Information that you direct me to obtain from family members, employers, banks, or other third parties;
* Information about your transactions with myself or others.

Information that I receive may relate to your finances, employment, health, family makeup, or other personal characteristics. I use this information in providing business services such as tax preparation and planning to you.

Your confidence and trust are important to me. If you have any questions or concerns about the way I handle your nonpublic personal information, please give me a call.

[JG EA]

Good comments

I think I'll add a few things into the client letter - just a bit. Gabriel, your "behind their back comment" made me think - so I'll explain what I will put into their final package before we get started. I'm planning to also tell them if they need tax or year-end planning to make an appointment after 10/15.

Jainen, good point about the purpose of any notice, signed or unsigned.