Tax Preparation Engagement Letter

 Dear Client:

             Thank you for choosing To The Penny Accounting & Tax as your tax professional. We are pleased to have you as a client and look forward to working with you. In order to minimize any possible misunderstandings as to the scope of our work and the payment for such services, this letter confirms the terms of our engagement and clarifies the nature and extent of the services that we will provide.

Preparation: We will prepare your requested federal and state income tax returns from information provided by you. We may ask for clarification of some items, but we will not audit or otherwise verify the data you submit. Our work does not include any procedures designed to discover errors or other irregularities or fraud, should any exist. Since the returns will reflect the information that you have given us, you have the ultimate responsibility for their accuracy; therefore, you should review each line in the return carefully before you sign and file it.

We have questionnaires and worksheets available to guide you in gathering the necessary information and to avoid overlooking important documentation. As a general rule, we request all information be provided to us no less than 30 days prior to the due date of the return for timely preparation. If necessary, we will endeavor to file an extension, however, you may be subject to late filing penalties if the information is turned in too late.

We will use our judgment in resolving questions where the tax law is unclear or where there are different interpretations of the law. In order to avoid substantial penalties on tax preparers, any returns will be based upon the position which we believe the IRS is not likely to dispute. You agree to properly disclose all “reportable transactions” and to honor our decision regarding the need to attach any protective disclosures.

Fees & Payment: All payment is due on delivery of your completed returns. We accept cash, check or credit card or you may be eligible to have our fees deducted from your federal refund (restrictions apply). Our fees will be based upon hourly billing rates and the complexity of your tax return(s), including any out-of-pocket costs and processing fees. Any estimates given are non-binding and based upon your representation about the complexity of your return. Your actual fees may exceed original estimate without notification to you in advance. We do reserve the right to ask for retainer fees to be paid in advance, if needed. To the extent permitted by law, an interest charge may be added to all accounts not paid within thirty (30) days. If your account is turned over to a collection service, you agree to pay any and all collection costs. Any bookkeeping assistance we find necessary for your tax preparation will be at an additional charge.

Liability: Any negligent errors or omissions committed by us in the performance of this or any other engagement will be addressed promptly. Our maximum liability will be limited to the amount of fees paid to us for services in the preparation of your return. If there are errors on the returns prepared from the data you provided to us, or any questionable or unusual positions that you have taken in the preparation of your return, we cannot be held liable for the payment of the additional tax that would have been properly due on the original returns, or for the interest charged by the taxing agency as you have had use of the money. However, we may be liable for any penalties charged as a result of the incorrect payment of tax when the penalty results from an error on our part in the preparation of your return. Any tax planning advice given from us in which you will rely upon, must be in writing. In particular, you should not rely on oral discussions, telephone calls, email messages or voicemail messages as tax or business planning advice. In the event of a dispute between preparer and taxpayer, both parties agree to resolve through mediation.

Document Retention & Audit: Taxing authorities require you to retain information substantiating all items reported on your returns. You should retain and protect your tax returns, statements, receipts, and other supporting documents for a minimum of three (3) years and up to seven (7) years after the filing date. Your returns are subject to review (audit), or you may receive requests for additional information from the tax authorities. However, just because your return is selected does not mean there is a problem. In your interest, it is advisable to contact us immediately upon receiving correspondence from the taxing agency. We may be able to assist you if an examination occurs, but this will be done for additional fees based on a standard hourly rate then in effect. That audit is not part of this engagement. If your return is selected for audit, it is important for you to realize that you are solely responsible for providing the documents and other substantiation to the tax authorities. It is our policy to retain work papers related to this engagement for seven years. Upon the expiration of the seven-year period, you agree that we shall be free to destroy our work papers.

Privacy Notice: We collect information provided by you from your tax organizer, worksheets, documents, computer data files and discussions, information provided to us at your request by banks, and information that we develop as part of this engagement. We are committed to the safekeeping of your confidential information and we maintain physical and electronic safeguards to protect your information. We are required to keep all information about our engagement confidential. We will not disclose any information about you unless we have your approval, even if you are no longer a client. If you need an additional copy of your return or request that we fax/mail a copy of your tax return(s) or other data to another party (i.e. mortgage lender), we will require your permission in writing or via email. There is minimum charge of $20.00 for this service.

This firm is not a CPA firm. This engagement letter for tax preparation shall remain in force, and be reviewed, from year to year until canceled by your not using our services in a subsequent year, or by written notice from us prior to the end of the tax year for which return preparation is declined. We reserve the right to perform no work unless we have a signed engagement letter on file.