Free Tax Preparation Engagement Letter Template

[FIRM LETTERHEAD]

[DATE]

[CLIENT NAME]
[CLIENT ADDRESS]

Dear [CLIENT CONTACT NAME]:

ENGAGEMENT LETTER — TAX RETURN PREPARATION, TAX YEAR [YEAR]

Thank you for engaging [FIRM NAME] to prepare your tax returns. This letter confirms the terms of the engagement.

1. RETURNS IN SCOPE
We will prepare the following returns for tax year [YEAR]:
  a. [e.g., Federal Form 1040 and accompanying schedules]
  b. [e.g., [STATE] resident income tax return]
  c. [e.g., Federal Form 1120S and Schedules K-1 for [ENTITY NAME]]
  d. [ADDITIONAL RETURNS]

No other returns, entities, states or years are included. Additional returns, including amended returns for any year, require a separate engagement and are billed separately.

2. SERVICES NOT INCLUDED
This engagement does not include: bookkeeping or the preparation of financial statements; payroll or sales tax filings; tax planning or projections; representation before the Internal Revenue Service or any state or local authority; responses to notices, examinations or audits; foreign reporting analysis beyond the forms listed in section 1; or any assurance service. We do not provide legal or investment advice.

3. INFORMATION DEADLINE AND EXTENSIONS
To file by the original due date, we must receive all requested information by [DATE]. Information received after that date may require an extension.

Where an extension is filed, you understand that an extension of time to file is not an extension of time to pay. Any estimated payment we calculate will be based on the information available at the time, and interest and penalties may apply to amounts ultimately due.

4. YOUR RESPONSIBILITIES
You are responsible for:
  a. the accuracy and completeness of all information provided, including all income from all sources;
  b. maintaining documentation supporting the items reported, including records substantiating deductions, business expenses, travel, meals, charitable contributions and basis;
  c. disclosing all foreign accounts, foreign assets, foreign income, virtual currency transactions and any other reportable interests;
  d. reviewing the completed return before it is filed;
  e. signing the e-file authorization before we transmit any return.

We will not audit or otherwise verify the information you provide, although we may ask for clarification.

5. TAX POSITIONS
Where the treatment of an item is uncertain, we will explain the alternatives and the associated risk, and you will decide the position taken. You are responsible for any tax, interest or penalty assessed by any authority.

6. FEES
Our fee for the returns listed in section 1 is [$[AMOUNT] / based on our standard rates of $[RATE] per hour]. The fee assumes records are complete and organized as described in section 4. Disorganized or incomplete records, late information, additional entities, additional states and revisions after the return is finalized are billed in addition at $[RATE] per hour.

Payment is due [ON DELIVERY / WITHIN [NUMBER] DAYS OF INVOICE]. We do not transmit returns until fees are settled, unless agreed otherwise in writing.

7. NOTICES AND EXAMINATIONS
If you receive a notice from any taxing authority, forward it to us promptly. Assistance with notices, examinations or appeals is a separate engagement, billed separately at $[RATE] per hour.

8. RECORDS RETENTION
We retain copies of returns and supporting workpapers for [NUMBER] years. You should retain your own copies and all underlying records for at least the period during which they may be examined.

9. CONFIDENTIALITY
We will not disclose your information except as permitted or required by law and professional standards, or with your written consent.

10. TERMINATION
Either party may terminate this engagement on written notice. Fees for work performed through the date of termination remain payable. If we have not received the information described in section 3 by [DATE], we may withdraw from the engagement and will notify you in writing.

11. ACCEPTANCE
Please sign and return a copy of this letter. We will not begin work until it is returned.

Sincerely,

_______________________________
[PARTNER NAME], [CREDENTIAL]
[FIRM NAME]

ACCEPTED AND AGREED:

_______________________________      ____________________
[TAXPAYER SIGNATURE]                  Date

_______________________________      ____________________
[SPOUSE SIGNATURE, IF JOINT]          Date