Tax Services Agreement
(Required by Professional Liability Insurer)
Updated January 1, 2010
I am required to provide you with this engagement letter by my insurance carrier. You are not required to sign and return the letter in order to be bound by its terms, but I suggest you review it and discuss it with me if you should have any questions. A copy will be available on my website as well.
This letter is to confirm and specify the terms of my engagement with you and to clarify the nature and extent of the services I will provide. In order to ensure an understanding of our mutual responsibilities, I ask all clients for whom returns are prepared to confirm the following understanding.
I will prepare your Federal and requested state and local income tax returns from information which you will furnish me. I will make no audit or other verification of the data you submit, whether verbal or written, although I may ask you for clarification of some of the information.
It is your responsibility to provide all the information required for preparation of complete and accurate returns. You represent that the information you are supplying to me is accurate and complete to the best of your knowledge. You should retain all the documents, canceled checks and other data that form the basis of income and deductions. These may be necessary to prove the accuracy and completeness of the returns to a taxing authority. You have the final responsibility for the income tax returns and, therefore, you should review them carefully before you sign and file them.
My work in connection with the preparation of your income tax returns does not include any procedures designed to discover defalcation or other irregularities, should any exist.
I will use my judgment in resolving questions where the tax law is unclear, or where there may be conflicts between the taxing authorities’ interpretation of the law and other supportable positions. I plan to perform reasonable research to support positions taken in your tax returns. Unless otherwise instructed, I will resolve such questions in your favor whenever possible.
The law provides for a penalty to be imposed on any underpayment that results from negligence or disregard for of rules and regulations. Negligence “includes any failure to make a reasonable attempt to comply…with the Code.” Disregard “includes any careless, reckless or intentional disregard”. The law also provides various other penalties that may be imposed when the taxpayers understate their tax liability. If the tax authorities assess penalties, you agree to be responsible for their payment and not to look to me for reimbursement.
Our fees will be based on the time required to complete the engagement. These fees are affected by our assistance in providing the necessary information and the complexity of unanticipated tax issues that may be discovered during our work. For the simpler personal and business tax returns, minimum fees may be charged to cover all expenses. All invoices sent to you are due upon delivery of the work product or completion of the returns. We reserve the right to retain the returns and our work product until paid if we deem it necessary. If you a history of late payment, we will require payment of our invoice before any returns are electronically filed or signed for manual filing.
Your returns or any part of your returns may be selected for review or examination by the taxing authorities. Any proposed adjustments by the examining agent are subject to certain rights of appeal. In the event of such governmental examination, I recommend that you hire a competent professional to represent you. I will be available, upon request, to represent you and will render additional billings for the time and expenses incurred.
We do not prepare
County
Personal Property
tax returns as part of the standard tax services or businesses, unless we are specifically asked to do so in writing and provided with the County return sent to the taxpayer. Such returns are a listing of business assets and their values and we do not have information about the current status or values of assets. If you are not sure whether you are required to file a business personal property tax return, you should consult with county officials or obtain information generally available on
County
websites
.
Due to the rush of returns received prior to the filing deadline of April 15th, we generally have a processing backlog of approximately three to four weeks during our busy season, which means that if your tax material is received by us after about March 20th, your return will not likely be completed by April 15th and will be automatically extended by us. We charge a processing fee ($75.00) for extensions we file to cover the cost of filing, including certified mail and processing fees we pay.
Returns are processed in the order received and we make every effort to process the returns as quickly as can be done accurately. If we have requested additional information from you to complete the return and have not received it, the return will be set aside without further processing until we receive the information requested.
If we have prepared your income tax returns for the prior year, we will automatically file a federal extension, Form 4868, by April 15, 2010 if we have not heard from you regarding your 2008 taxes or we have your nformation but are unable to complete the returns before the April 15th initial filing deadline. A tax return iling extension is only an extension of time to file, not an extension to pay. Paying any additional taxes due after April 15 (or any other earlier payment due date) will result in penalties and interest, which you will be responsible for. If you require assistance calculating the amount of taxes due by January 15, 2010 (the 4th quarter estimated tax payment due date) or April 15, 2010, we will assist you with computing those amounts upon request.
If you are subject to tax by a jurisdiction other than Oregon or the IRS, such as the City of Portland, Multnomah County or the Tri-Met or Lane Transportation Districts, they do not accept a federal tax extension and you will need to obtain and file a separate tax extension with them, and in most cases make a payment, in order to avoid any underpayment or late payment penalties and interest. In some instances, the late-filing penalties can be as high as 50% of the tax. Extension forms and payment coupons from those taxing authorities can be obtained online or by contacting the agency directly.
I am also available at your request to advise you on other tax matters that arise during the year. Our policy is to put significant tax research and planning advice in writing. Therefore, you should not rely on any unwritten advice because it may be tentative and not yet fully reviewed. Fees for such services would be invoiced separately or may be combined with tax preparation and other services, if not previously billed when taxes are prepared.
I will not be rendering any tax services that are not covered by this agreement. If you do not accept the above conditions, I will be unable to provide any tax compliance and consulting services. If you have any questions regarding anything in this letter, or disagree with the terms, please contact me immediately so that we may resolve any issues in advance of me performing any services.
Tax Services Agreement
Gregory J. McWade, CPA
