Engagement Letter
January 1, 2008
This letter confirms the arrangements for our tax return preparation services. We will prepare your individual Federal, state, and, when requested, local income tax returns for 2007. We will also prepare these returns for your dependent children at your request. In addition, and only if you request, we will prepare other applicable returns such as payroll, sales, business privilege, or mercantile tax returns. We will prepare all of these returns in accordance with the appropriate tax laws. We will use our judgment in resolving questions where the law is unclear, or where there are conflicts between taxing authorities' interpretations of the law and other supportable positions.
It is your responsibility to provide us with all the information needed to prepare complete and accurate tax returns. This includes disclosure of any reportable transactions (typically tax shelters offering losses and credit against tax). We will not audit or otherwise verify the data you submit, although we may ask you to clarify some of it.
Soon, the Internal Revenue Service will require all individual tax returns to be filed electronically. Our firm offers and encourages the use of this service. You will receive a positive notification by email (usually within 48 hours) that the return is accepted. We will provide this service for all qualifying 2007 Federal and State returns. As is the case with paper filing, you will receive your return for review and approval prior to electronic submission.
There have been changes to the Internal Revenue Code again this year. These changes may impact your return. As a result, it is important that we get your information as early as possible. When you have the majority of your information accumulated, please send it to us with a note detailing the missing information to be sent at a later date. This will allow us to begin the preparation of your return rather than waiting until all information is submitted. We hope to receive your information before February 29, 2008. Unless we have received all of your tax information prior to March 15, 2008, we cannot guarantee the completion of your tax returns prior to April 15, 2008. If necessary, we can apply for an automatic extension of time to file your tax returns.
Fees for our tax preparation services are due upon presentation of our invoice to you.
Your returns are subject to examination by the taxing authorities. In the event of an audit, you may be requested to produce documents, records, or other evidence to substantiate the items of income and deduction shown on a tax return. If an examination occurs, we will represent you if you so desire; however, these additional services are not included in our fee for the preparation of your returns.
Although we are available to provide you with tax planning advice, we are not obligated to do so unless you specifically request it. Our policy is to put all tax planning advice in writing. Therefore, you should not rely on any unwritten advice because it may be tentative and not fully reviewed.
Certain communications involving tax advice between you and our firm may be privileged and not subject to disclosure to the IRS. By disclosing the contents of those communications to anyone, or by turning over information about those communications to the government, you may be waiving this privilege. To protect your rights, please consult with us or your attorney prior to disclosing any information about our tax advice.
We may, on occasion, use the services of unaffiliated third party vendors or subcontractors to perform certain duties including, but not limited to, data organization, data entry, processing, or data storage. Should we elect to outsource such services when working on your engagement, all of your information and data would remain strictly confidential as any such party is prohibited by written contract from using the information other than for the purposes for which the information was provided by us to that party.
We will be preparing your tax returns based on information you provide and/or representations that you make. Regulations have recently been adopted that permit the Internal Revenue Service to penalize tax return preparers in the event a taxpayer does not have the evidence to support a position taken or sufficient documentation to support deductions claimed. By providing information to us regarding your circumstances or deductions, you are representing to us that those circumstances are true and that you have the documentation necessary to support your positions or deductions. In the event that you are unable to provide such evidence or documentation to the Service when requested, and if that failure results in the Service assessing penalties against Alpern Rosenthal that we are unable to have abated, you agree to indemnify Alpern Rosenthal to the extent of such penalty and related costs, including the cost to defend any action or assessment.
The American Jobs Creation Act of 2004 amended certain disclosure and penalty rules that apply to tax avoidance transactions for transactions with respect to which material aid, assistance, or advice is provided after October 22, 2004. The new rules require certain disclosures of reportable transactions by material advisors and list-maintenance with respect to advisees under Code §6112. Reportable transactions are defined as one of the following:
- A Listed Transaction (or a Transaction that Is Substantially Similar to a Listed Transaction) as defined by the Internal Revenue Service from time to time;
- A Transaction Offered under Conditions of Confidentiality (restricting your right to disclose the strategy to third parties);
- A Transaction with Contractual Protection (the fee you paid is refunded if the position with the Service is not successful);
- Certain Loss Transactions (for corporations, $10 million or more for any single taxable year or an aggregate of $20 million over the five succeeding years; for individuals, $2 million in any taxable year or an aggregate of $4 million for the year of the transaction and the five succeeding years;
- A Transaction Creating a Book/Tax Difference Exceeding $10 Million;
- A Transaction that results in a tax credit of more than $250,000 and wherein you hold the underlying asset giving rise to the credit for 45 days or less.
You are required to inform us of your participation in any such transaction. If you need assistance in determining whether or not these rules apply to you, please advise us at the inception of the engagement.
If the tax services and terms outlined above are in accordance with your understanding of our engagement, you should sign this letter in the space provided and return it to us with your Tax Information in the enclosed envelope. It is our desire that you sign and return this engagement letter to us. However, if you do not, we will assume that by sending the information to us necessary to prepare your returns, you agree to the terms of this letter.
This letter sets forth the entire understanding of the parties with respect to the specifics of the engagement undertaken by Alpern Rosenthal. Any previous description of available services in marketing pieces, brochures and the like and any previous agreements or understandings between the parties regarding the scope and subject matter of this engagement are superseded in their entirety by this engagement letter.
We appreciate this opportunity to serve you. If you have any questions regarding the completion of the Tax Organizer or your tax returns, please do not hesitate to contact us.
Sincerely,
Alpern Rosenthal
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