Sample Engagement Letter Template printable pdf download

ENGAGEMENT LETTER

This letter confirms the terms of our engagement with you and the nature and extent of services we will provide.

We will prepare the federal and state income tax returns you request using information you provide to us. We may

ask for clarification of some items, but we will not audit or otherwise verify the data you submit. It is your

responsibility to provide information required for preparation of complete and accurate returns. You should keep all

documents, canceled checks and other data that support your reported income and deductions, that may be necessary

to prove accuracy and completeness of the tax returns. You are responsible for the returns, so you should review

them carefully before you sign them. Our work will not include any procedures to discover defalcations or other

irregularities. The only accounting or analysis work we will do is that which is necessary for preparation of your

income tax returns.

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 you instruct us

otherwise, we will apply the “realistic possibility of success” standard to resolve such issues in your favor where

possible.

The law imposes a penalty when a taxpayer has a “substantial understatement” of tax liability. A substantial

understatement exists when the understatement for a year exceeds the greater of 10 percent of the tax required to be

shown on the return, or $5,000. The penalty is 20 percent of the tax underpayment. Taxpayers may avoid all or part

of the penalty by showing that (1) they acted in good faith and there was reasonable cause for the understatement,

(2) the understatement was based on substantial authority, or (3) the relevant facts affecting the item’s tax treatment

were adequately disclosed on Form 8275 or 8275-R attached to the return and there was reasonable basis for the

position. You agree to advise us if you wish disclosure to be made in your returns or if you desire us to identify or

perform further research with respect to any material tax issues for the purpose of ascertaining whether, in our

opinion, there is “substantial authority” for the position proposed to be taken on such issue in your returns.

If we are preparing a business tax return for you and that business is taxed as an “S Corporation” that entity is

required to pay employee/shareholders a “reasonable salary”. If the IRS determines that employee/shareholder

salary is unreasonably low the IRS may assess additional payroll taxes. If you have any additional questions

regarding salary requirements for employee/officers, please contact our office to review (refer to rev. rul. 59-221).

Your returns may be selected for audit by a taxing authority. Any proposed adjustments are subject to appeal. Our

fee for preparation of your tax returns will be based on the amount of time required at standard billing rates plus out-

of-pocket expenses. If we perform work for a business entity at your direction, both you and the business entity shall

be jointly and severally responsible to pay our bill. All invoices are due and payable upon presentation. You agree to

pay an interest charge of 1 ½ % per month on all accounts not paid within thirty (30) days. In the event of any

disputes over our billing, you agree to notify us in writing of the dispute within thirty days of your receipt of the bill,

and if you do not give us that timely notice, your bill is deemed accepted as an account stated. In the event

collection efforts are required, you agree to pay our attorneys fees and costs. Any lawsuits relating to our

relationship shall be brought exclusively in the Florida State Court situated in Broward County, Florida, and you

agree to both venue and jurisdiction in that state and county.

To indicate that this letter correctly summarizes your understanding of the arrangements for this work, please sign

the enclosed copy of this letter in the space indicated and return it to us in the envelope provided.

Accepted By:

_____________________________________

_____________________________________ Date_________________________

Print and Sign Names

____________________________

AvMar Accounting Services LLP

Sample Engagement Letter Template

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