Standard Engagement Terms and Conditions

Standard Terms and Conditions Applicable to Our Engagement for Professional Services

We will not audit or otherwise verify the information you provide for the purpose of preparing tax returns. You are responsible for the accuracy and completeness of that information. Any necessary adjustments we propose will be subject to your review and approval before you file the tax returns. You are also responsible for the timely filing of all necessary returns and reports with governing agencies and the timely payment of all taxes and similar fees or assessments.

You agree that in the event any tax returns cannot be completed by the due date, it may become necessary to apply to extend the due date. Extensions are required when we do not receive information needed to prepare a return on a timely basis. Applying for an extension of time to file may extend the time available for a government agency to undertake an audit of your return or may extend the statute of limitations. Additionally, extensions may affect your liability for penalties and interest or compliance with deadlines. We are available to discuss this matter with you at your request at our regular fee should the need arise.

You are responsible for determining your income and other tax filing/paying obligations for states other than your state of residence. While we may assist you in meeting those obligations, we have no responsibility for determining those filing and/or payment obligations unless you specifically request that we do so.

Each U.S. person who has a financial interest in or signature or other authority over foreign financial accounts must electronically file a Foreign Bank Account Report (FBAR) on Form 114 if the aggregate value of the accounts exceeds $10,000 at any time during the calendar year. A foreign financial account is a financial account located outside the U.S. An account maintained with a branch of a U.S. bank that is physically located outside of the U.S. is a foreign financial account. A financial account includes a securities, brokerage, savings, demand, checking, deposit, time deposit or other account maintained with a financial institution. A financial account also includes a commodity futures or options account, an insurance or annuity policy with a cash value, and shares in a mutual fund or similar pooled fund. In addition, a debit card account is a financial account, and a credit card account may be treated as a financial account under certain circumstances. The FBAR is due by April 15 following the calendar year for which it applies. Thus, FBARs for the 2021 calendar year must be electronically filed on or before April 15, 2022.

A specified individual or entity must file Form 8938 (Statement of Specified Foreign Financial Assets) if the individual or entity has an interest in one or more specified foreign financial assets having an aggregate value exceeding $50,000 on the last day of the tax year or $75,000 at any time during the tax year ($100,000 and $150,000, respectively, for married individuals filing a joint annual return). For a specified individual living outside of the U.S., Form 8938 must be filed if the aggregate value of the specified foreign financial assets in which the taxpayer has an interest exceeds $200,000 ($400,000 if a joint return is filed) on the last day of the tax year or $300,000 ($600,000 if a joint return is filed) at any time during the tax year. An individual isn’t required to file Form 8938 for any tax year for which he isn’t required to file an annual return.

We will be available to answer your inquiries on specific tax matters and to consult with you on income, estate or other business or personal financial planning. In this process, we may analyze proposed investments in terms of your financial position and goals as well as their tax aspects. However, we will offer no recommendations as to the investment quality of any specific investment. Although we are available to provide you with tax planning or other business and/or financial advice, we are not obligated to do so unless you specifically request it. Our policy is to put all advice in writing. Therefore, you should not rely on any unwritten advice because it may be tentative and not yet fully researched and reviewed.

You may request that we perform additional services not contemplated by our engagement letter. If this occurs, we will communicate with you regarding the scope of these additional services. Engagements for additional services may necessitate that we issue a separate engagement letter to reflect the obligations of both parties. In the absence of any other written communications from us documenting such additional services, our services will be governed by the terms of our annual engagement letter, including these standard terms and conditions.

Our engagement does not include responding to inquiries by any governmental agency or tax authority. If your tax return is selected for examination or audit, you may request that we assist you in responding to such inquiry. In that event, we will discuss providing assistance to you under the terms of a separate engagement for that specific purpose.

Management decisions on tax or accounting issues or on other matters with a significant and continuing effect on your company may be required during the engagement. Additionally, information about your company will be needed by us to render our services. Your representative for the purpose of conveying your company’s decisions or information to us is identified in our engagement letter. You authorize us to rely on your representative for answers to all of our inquiries, and you understand that your representative’s responses will be binding on you. If, during the course of our services, you experience any service problems or wish to change or expand the services we have agreed to perform, you agree to contact the firm representative identified in our engagement letter, who is in charge of your engagement.

In order to preserve our independence in providing accounting services for you, it is necessary that we not assume the responsibility for any management functions of your company. Such management functions include, but are not limited to:

  • Making management decisions,
  • Designating a competent employee to oversee our services,
  • Evaluating the adequacy and results of our services,
  • Accepting responsibility for the results of our services, and
  • Establishing and maintaining internal controls, including monitoring ongoing activities; and cover activities we perform for you including, but not limited to:
  • Determining and recording any adjusting journal entries, account codings, and/or classifications prior to preparing financial statements,
  • Preparing income and other types of tax returns, and
  • Assisting with the design, implementation, or operation of your computer and/or other accounting and information systems.

You and/or your company are solely responsible for all management functions. Our responsibility is to perform the services identified in our engagement letter in accordance with our professional standards. We will, of course, answer any questions or provide additional explanations that your personnel request so that they may properly perform the management functions. In the event that any client principal requests records you have submitted to us which are required to complete our engagement or copies of financial statements, tax returns, or other documents we have prepared, we are authorized to provide copies of the same in exchange for our standard copying fees. We will be required to release records and/or documents only if all fees and costs incurred for this engagement have been paid in full.

You are responsible for keeping copies of tax returns, financial statements and other reports and documents – including supporting records and information. At the conclusion of this engagement, we will return all original records you supplied to us. Your company records are the primary records for your operations and comprise the backup and support for your financial reports and tax returns. Our records and files are our property and are not a substitute for your own records. Our firm destroys our client files and all pertinent work papers after an appropriate retention period, after which time these items will no longer be available. Catastrophic events or physical deterioration could also result in our firm’s records being unavailable. When records are returned to you, it is your responsibility to retain and protect your records for possible future use, including potential examination by government or regulatory agencies. You acknowledge and agree that upon the expiration of the appropriate retention period, our firm shall be free to destroy our records related to this engagement.

Our engagement cannot be relied upon to disclose errors, fraud, or illegal acts that may exist. However, we will inform the appropriate level of management of any material errors, and of any evidence or information that comes to our attention during the performance of our procedures that fraud may have occurred. In addition, we will report to you any evidence or information that comes to our attention during the performance of our procedures regarding illegal acts that may have occurred, unless they are clearly inconsequential.

Any bookkeeping services will be performed based solely on information shown on the bank statement(s) and certain other documents that you make available to us. We will not verify or audit this information. We will not perform procedures designed to detect fraud or theft such as inspecting cancelled checks, substitute checks, electronic transactions, or any legal equivalent of checks if we reconcile your bank account(s). This engagement does not include reconciling of accounting records that you may maintain, and we will not be responsible to reconcile your internal data to match the records we maintain.

In connection with this engagement, we may communicate with you or others via email or facsimile transmission. We take reasonable measures to secure your confidential information in our email transmissions, including password protecting confidential documents. However, as email or facsimile can be intercepted and read, disclosed, or otherwise used or communicated by an unintended third party, or may not be delivered to each of the parties to whom it is directed and only to such parties, we cannot guarantee or warrant that email or facsimile from us will be properly delivered and read only by the addressee. Therefore, we specifically disclaim and waive any liability or responsibility whatsoever for interception or unintentional disclosure or communication of email or facsimile transmissions, or for the unauthorized use or failed delivery of email or facsimile transmitted by us in connection with the performance of this engagement.

In that regard, you agree that we shall have no liability for any loss or damage to any person or entity resulting from the use of email or facsimile transmissions, including any consequential, incidental, direct, indirect, or special damages, such as loss of sales or anticipated profits, or disclosure or communication of confidential or proprietary information.

In the unlikely event that circumstances occur which we in our sole discretion believe could create a conflict with either the standards of our firm or the standards of our profession in continuing our engagement, we may suspend our services until a satisfactory resolution can be achieved, or we may resign from the engagement. We will notify you of such conflicts as soon as practicable, and will discuss with you any possible means of resolving them prior to suspending our services.

In the event you fail to timely provide us with records that we request, or if the records you provide are incomplete or unusable, we reserve the right to terminate the engagement without completing our work. If we can assist you in preparing needed records, we will contact you to discuss the problem, the additional work needed, our fees for such work, and the anticipated delay in completing our engagement before rendering further services.

As tax return preparers, our firm is required to conform to certain standards when an undisclosed tax position is being taken on your tax return. Accordingly, by using our firm for tax preparation services, you acknowledge that you are aware of this requirement, and consent to our preparation of your federal income tax return in accordance with the standards applicable to our firm as tax preparers. If we conclude as a result of our research that you are required to disclose a transaction on your tax return, you consent to attach a completed Form 8275 or 8275R to your tax return after we discuss the situation with you. You agree to hold our firm harmless with respect to any and all actual and consequential damages (including but not limited to taxes, penalties, interest, and attorney’s fees and costs) that you incur as a result of including such disclosures with your filed tax returns.

Internal Revenue Service regulations requires us to advise you that, unless otherwise specifically noted, any federal tax advice in any communication (including any attachments, enclosures, or other accompanying materials from us to you) is not intended or written to be used, and it cannot be used, by any taxpayer for the purpose of avoiding penalties; furthermore, such communication is not intended or written to support the promotion or marketing of any of the transactions or matters it addresses.

Federal law has extended the attorney-client privilege to some, but not all, communications between a client and the client’s CPA. The privilege applies only to non-criminal tax matters that are before the IRS or brought by or against the U.S. government in a federal court. The communications must be made in connection with tax advice. Communications solely concerning the preparation of a tax return will not be privileged.

In addition, the confidentiality privilege can be inadvertently waived if the contents of any privileged communication are discussed with a third party, such as a lending institution, a friend, or a business associate. We recommend that you contact us before releasing any privileged information to a third party. As a corporation, you need to be especially careful about privileged communications. If a communication is made in the presence of a corporate employee who is not authorized to act or speak for the corporation in relation to the communication’s subject matter, then the communication will be deemed to be made in the presence of a third party and any privilege will be waived.

If we are asked to disclose any privileged communication, unless we are required to disclose the communication by law, we will not provide such disclosure until you have had an opportunity to argue that the communication is privileged. You agree to pay any and all reasonable expenses that we incur, including legal fees, that are a result of attempts to protect any communication as privileged.

In the event that we receive a subpoena or summons requesting that we produce documents from our engagement or testify about the engagement, we will notify you prior to responding to it if we are legally permitted to do so. You may, within the time permitted for our firm to respond to any request, initiate such legal action as you deem appropriate to protect information from discovery. If you take no action within the time permitted for us to respond or if your action does not result in a judicial order protecting us from supplying requested information, we may construe your inaction or failure as consent to comply with the request.

Both parties to our engagement agree that any dispute that may arise regarding the meaning, performance, or enforcement of this engagement will, prior to resorting to litigation, be submitted to mediation upon the written request of either party to the engagement. All mediations initiated as a result of this engagement shall be administered by the American Arbitration Association (AAA). The results of this mediation shall be binding only upon agreement of each party to be bound. Costs of any mediation proceeding shall be shared equally by both parties.

Fees for our services will be billed to you upon completion of the engagement or per the terms of the engagement letter. In the event of extended engagements (those taking more than one month to complete), we will invoice you as work progresses. The total fees and costs for your accounting services may exceed any estimates given to you. It is not possible to know in advance what the total fees and costs will be, because much of the work to be performed may be contingent on the activities of others and circumstances over which we have no control. From time to time, you may ask us to estimate what a specific portion, or the entirety, of the services will cost. To aid you in planning, we will attempt to assist you by providing estimates. You understand that all such estimates are approximations based on our experience as accountants, and they are not and should not be taken as promises or guarantees.

All invoices are payable on presentation. Your engagement letter may require that all invoices be paid through an ACH Debit, and in that case we will require your signed ACH Debit authorization to be on file. Any billings remaining unpaid 15 days after the original invoice date are considered delinquent and subject to a 2% per month (24% per year) service charge. We reserve the right to suspend or terminate our work due to nonpayment. You acknowledge and agree that we are not required to continue work in the event of your failure to pay on a timely basis for services rendered as required by this engagement letter. You further acknowledge and agree that in the event that our work is suspended or terminated as a result of your failure to pay on a timely basis for services rendered as required by this engagement letter, we shall not be liable for any damages that occur as a result of our ceasing to render services. You further acknowledge and agree that we will not be responsible for your failure to meet government and other filing deadlines, or for penalties or interest that may be assessed against you resulting from your failure to meet said deadlines.

If the company is provided a portal for document and file transfer and delivery, we reserve the right to discontinue access to the portal after termination of services, or if our account is more than 15 days past due on unpaid invoices.

In the interest of facilitating our services to your company, we may send data over the internet, store electronic data via computer software applications hosted remotely on the Internet, or allow access to data through third-party vendors’ secured portals or clouds. Electronic data that is confidential to your company may be transmitted or stored using these methods. We may use third-party service providers to store or transmit this data, such as providers of tax return preparation software. In using these data communication and storage methods, our firm employs measures designed to maintain data security. We use reasonable efforts to keep such communications and data access secure in accordance with our obligations under applicable laws and professional standards. We also require all of our third-party vendors to do the same. You recognize and accept that we have no control over the unauthorized interception or breach of any communications or data once it has been sent or has been subject to unauthorized access, notwithstanding all reasonable security measures employed by us or our third-party vendors. You consent to our use of these electronic devices and applications and submission of confidential client information to third-party services providers during this engagement.

In accordance with our professional responsibilities and confidentiality laws, we will not provide copies of any financial statements, tax returns, or similar information to any third parties including banks, attorneys, etc. At your request, we will provide additional copies of such information to you so that you can give it to such third parties.

Either party may modify or cancel our agreement at any time by providing advance written notification to the other party. In such an event we will be entitled to be paid for all time expended and services rendered prior to the date of cancellation.

The unenforceability of any provision of this Engagement Letter shall not affect the enforceability of any other provision hereof, and this Engagement Letter shall be considered in all respects as if such invalid or unenforceable provisions were omitted.

Updated: January 5, 2022

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