1099 Letter Of Engagement, Review

[geekgirldany]

Would you guys please review this letter of engagement I made up when processing 1099s for customers:

This letter is to confirm my understanding of the terms and objectives of my engagement and the nature and limitations of the services I will provide.

I will perform the following services:

I will compile, from information you provide (name, address, tax identification numbers, amounts), 1099-MISC forms for Tax Year 2007. I will not audit or review any information you provide. You are solely responsible for the information reported on the 1099-MISC forms. It is also your responsibility to mail the forms to the appropriate taxing authorities and to the subcontractors. The 1099-MISC forms will be prepared as
Non-Employee Compensation, Box 7, unless otherwise notified in writing that they should not.
Failure to file may occur if you do not file the forms by February 28, 2008. The penalty per form is $15 if you file within 30 days after the due date. If you are later than the due date but before August 1 the penalty is $30 per form. If you file after August 1 or don't file at all, the penalty is $50 per form. The penalty is $50 per statement, no matter when the correct statement was furnished, with a maximum penalty of $100,000. As stated before you are responsible for the mailing of the tax forms.

My engagement cannot be relied on to disclose errors, irregularities, or illegal acts, including fraud or defalcations that may exist.

If the foregoing is in accordance with your understanding, please sign the copy of this letter in the space provided and return it to me.

[ChEAr$]

Your letter sounds fine and dandy to me

howsomeever, I don't use any kind of letter for these types of work.

Simple, they furnish me the information in writing, email for instance, I keep a copy in my
files in case I have to say 'I told you sol"

IOW, we don't have to draw up a letter for everything or every case.

[KJ Judd]

I generally add a line in my business clients engagement letter, "I will prepare necessary 1099s." I also list the rest of the items I'll do (tax return preparation for business, shareholders returns, personal property tax, etc.). If there's something I'm not doing, I usually list that out as well (i.e. you will be responsible for making all payroll deposits timely).

Then I have the caveats - based on info you provide, you are responsible for maintaining your records, you certify you've reported all income, and have substantiation to support expenses, etc.

Otherwise I found I spent more time doing the engagement letters in some cases than doing the actual work.

[geekgirldany]

Yeah I know I usually include it with my regular engagement letters. But for this person I am only doing their 1099s and will not be doing any other work for them. So I thought I had better cover myself. It concerns a post I made awhile back here about telling someone I wouldn't do their tax returns. I thought I would help out and do the 1099s but yeeeee should have washed me hands of the whole thing.

Thank you all for reading it