office (206) 682-9200
fax (206) 292-9272
toll-free (800) 579-5233


Engagement Letters

The standards of the Accounting Profession, good business practices, and the insurance companies require the client to sign an engagement letter prior to the CPA providing services for the client. The purpose of the engagement letter is to provide a clear understanding of the services to be provided or not to be provided, and to disclose other matters appropriate to the engagement. The goal is to minimize the potential for misunderstanding. Engagement letters are tailored to the engagement. The following is a typical engagement letter that must be signed before any services are rendered:

Tax Engagement Understanding 

This letter is to confirm the terms and objective of this tax services engagement, and to clarify the nature and limitations of the tax services to be provided.

I will prepare your 2014 (and other returns, if applicable) from information you furnish. Tax return preparation may require other tax and accounting services. I will depend on the information you are supplying as being accurate and complete to the best of your knowledge. I will rely on your representation that you have maintained the documentation required by law to support the information you are providing, including your expenses for meals, entertainment, travel, gifts, vehicle use, and charitable contributions.  I will not verify the information you provide, but I may ask you for clarification of some data. I will furnish you with a questionnaire to guide you in gathering the necessary information.

I will use my judgment in resolving questions where the tax law is unclear, or where there are conflicts in interpreting the law.  Unless otherwise instructed by you, I will resolve such questions in your favor whenever possible.

My work in connection with the preparation of your income tax returns does not include any procedures designed to discover fraud or other irregularities, should any exist. In addition, I reserve the right to terminate this engagement should there be ethical conflicts concerning the preparation of your tax returns.

The law provides various penalties that may be imposed when taxpayers understate their tax liability. If you would like information on the amount or circumstances of these penalties, please ask. You should review your income tax returns carefully before you sign and file them, as you have the final responsibility.

If needed, I will prepare on your behalf necessary extensions of time for filing your tax returns. I will use the information available to me at the time to prepare the application for extension. An extension only provides you with an extension of time to file, and not an extension of time to pay your tax. Taxes paid after the original due date will result in the imposition of interest, and may result in penalties being imposed by the taxing authorities.

Your tax returns will be prepared for electronic filing, unless extenuating circumstances dictate the preparation of a manually filed paper tax return.

I use a third-party software vendor for the processing of certain tax information, including the transmittal of all tax returns that are filed electronically. This vendor is subject to the same confidentially and privacy rules of the Internal Revenue Service that I am subject to.

Your tax returns may be selected for review by the taxing authorities. Any proposed adjustments by the examining agent are subject to certain rights of appeal. If the government chooses to examine your tax return, I will be available upon request to represent you; I will render additional invoices for the time and expenses incurred.

Where a joint tax return is prepared, tax returns and supporting information will be made available to either spouse without the consent of or notification to the other spouse.

The Firm generally retains for seven years, in paper or electronic form, the final work product generated for its clients. After the retention period, the documents are destroyed. The Firm does not keep any original client records--they will be returned to you at the completion of the engagement.  It is your responsibility to retain and protect your records for possible future use, including potential examination by the taxing authorities.

Fees over thirty days past due will incur a late charge of 1.5% per month, which is an annual rate of 18%.  I may, in my judgment, cease work on an engagement where delinquent fees are outstanding. If I elect to cease work for nonpayment, my engagement will be deemed to have been completed, even if I have not completed your tax return. You will be obligated to compensate me for all time expended and to reimburse me for all out-of-pocket expenditures through the date of termination.

Please sign and return this letter with your tax organizer.  Work cannot commence until a signed copy of this document is returned to the Firm.