This page contains the full terms of our tax preparation engagement. All clients are required to review and agree to these terms prior to the preparation of their tax return.

 

Thank you for choosing Smith Tax Service to assist you with your taxes. This letter confirms the terms of our engagement with you and outlines the nature, extent, as well as terms and conditions of the services we will provide.

 

A Quick Summary

1. We will prepare your taxes for the year stated above. No other services are included in this agreement.

2. Our fee is based on the forms required to be submitted for your return. You agree to pay at the end of our services.

3. You are responsible for providing all documentation/clarifications we request. Any delays in providing correct documentation will result in delays/ possible incompletion of your return. We will make reasonable efforts to follow up a few times, but ultimately this is your responsibility.

4. We use the information that you provide to prepare your return. We may ask for additional documentation or clarifications to properly document reasonable basis for your return. We will not sign a return unless we know that it is true, correct, and of reasonable basis.

5. We reserve the right to extend your file at any time. We work hard to get as many customers completed by the deadline, but make no guarantees completion will be by the filing date.

6. You are responsible for reviewing and signing your final return before we e-file. We cannot send without an approval signature & payment for services.

7. If your return is paper-filed, you are responsible for making sure that it is submitted and received by the tax deadline.

8. Errors and omissions can happen, let us know and we can address it. Our liability is limited to the amount of fees paid to Smith Tax Service.

9. You are responsible for submitting any payments owed to the proper taxing authorities.

10. If you get a letter from the IRS or CA FTB, let us know. If it requires a response, we charge for our time to compile the response letter.

​

What Services are Covered under this Engagement?  

Preparation of Federal and State Returns: This engagement is only for the preparation of your US federal and state tax returns for the tax year stated above. If you have taxable income or loss in a state or locality other than your resident state, we will generally prepare your nonresident state or locality returns, as well, unless you indicate in advance that you prefer we not prepare these nonresident filings.

​

Preparation of Dependent Tax Returns: In some cases, a dependent or minor child under your care and supervision may be required to file a U.S. income tax return and/or state income tax return. Generally, if you request that we prepare such forms on your dependent’s behalf, we will consider that service to be covered under the current engagement as a “dependent tax filing,” and we will bill the preparation to you based on our most recent tax preparation fee schedule.

​

Services Not Covered by This Engagement: The following services are examples of services that are outside the scope of this engagement. However, we regularly assist clients with many of these matters. Should you request these additional services, and we agree to provide them, we will send you a separate engagement letter for those services. Services not included in this contract: prior-year returns, returns for a spouse filing separately, auditing, tax planning advice beyond the current return, audit representation. Smith Tax Service is an income tax preparation service. No attorney client relationship exists from the tax services provided by Smith Tax Service and its preparers. We legally cannot represent you during an audit with the IRS, as we are only licensed to provide return preparation services. Finally, our work will not include procedures to find defalcations or other irregularities. Accordingly, our engagement should not be relied upon to disclose errors, fraud, or other illegal acts, though it may be necessary for you to clarify some of the information you submit. We will inform you of any material errors, fraud, or other illegal acts we discover.

 

What are the Fees for Our Services?

Tax Preparation Fees: Fees for our services will be charged according to our standard fee schedule for tax return preparation services, which are based on the complexity of your returns (number and type of required forms and schedules and other circumstances). Some returns with self-employment and rentals may incur a bookkeeping fee of $50/per 30 minutes of work. If bookkeeping is needed on your return, the preparer will reach out before starting work to confirm that you agree with the additional charges. You agree to pay the fee charged, and final balance is due and payable upon presentation of your completed tax return.

 

Additional Service Fees: Consultations, help filling out forms, responding to IRS letters, accounting & bookkeeping services, and other miscellaneous communications and tasks are billed at a rate of $50 per 30 minutes. 

 

Late Fees: For clients submitting current tax year information after September 15, there will be a 10% late fee included on your return.

 

Past Year Tax Preparation: All past tax years prepared are billed at our current fee schedule.

 

Extension Fees: If you have not dropped off your documents, and need an extension, we charge a $25 fee. Once your taxes are completed, we credit the $25 back onto your final bill.

​

What Are Your Responsibilities during the Tax Preparation Process?

Timely Information: It is your responsibility to provide all the information that we require for the preparation of complete and accurate returns. This includes, but is not limited to, all tax forms received from employers, financial institutions, and investment vehicles, as well as substantiation of all other income and expenses. We cannot and do not conduct investigations or audits of income and expenses. We rely on you to provide full disclosure of your income and expenses. You should retain all documents, canceled checks, receipts, and other data that form the basis of income and deductions. You are responsible for ensuring that personal expenses, if any, are separated from business expenses and that expenses such as meals, travel, vehicle use, gifts, and related expenses are supported by documentation and records required by the IRS and other tax authorities. 

​

To help you identify important information and collect the data that we need to prepare your tax return, our staff will go through a basic organizer and interview during your drop off time and will contact you with any other questions. There is also an online list of documentation on our website and secure document upload that our clients have access to as well to assist with their data collection.

 

Missing Documentation & Follow Up: If, during the course of your tax return preparation, we determine that additional information or clarifications are needed in order to complete your returns, we will let you know. You are responsible for providing such additional information in a timely manner so that we can prepare your returns. Please know that lack of responses or documentation on your part may result in a delayed or incompletion of your return.

​

Reviewing Final Returns: You have the final responsibility for your tax returns, and therefore, once you receive them, you should carefully review the returns (to determine that there are no omissions or misstatements) before signing them and submitting them to the tax authorities, or authorizing e-filing of the returns.

​

What Are Our Responsibilities under this Engagement?

We will perform our services based on the information you have provided, taking into account applicable federal, state or local laws, regulations, and associated interpretations relative to the appropriate jurisdiction as of the date the services are provided.

We will not audit or otherwise verify the information you provide us; however, we may ask for additional clarification of some information. You should maintain the documentation necessary to support the data used in the preparation of your tax returns should you be required to produce them upon examination by the taxing authorities.

​

Pursuant to the standards prescribed in Circular 230 and IRC §6694, we, as tax return preparers, are prohibited from signing a tax return unless we have a reasonable belief that there is substantial authority for a tax position taken on the tax return or we have a reasonable basis for the tax return position taken in the return.

​

Due Diligence: Due to the extremely high liability on our preparers for returns with credits and dependents claimed, we do maintain high standards for verifying information needed to claim credits. Our due diligence for these circumstances may include: asking for additional documentation and/or asking questions to verify that you do meet the criteria for claiming these credits. We record information received and then will have you sign copies of our due diligence records with your final return.

​

Professional Judgment: We use professional judgment in resolving questions where the tax law is unclear if there is a reasonable justification for doing so. Should we encounter instances of unclear tax law, or of potential conflicts in the interpretation of the law, we will outline the reasonable courses of action and the risks and consequences of each. We will ultimately adopt, on your behalf, the alternative you select.

​

However, under no circumstances may we sign a tax return with a tax position that has no reasonable basis. If the tax authority should later contest the position taken, there may be an assessment of additional tax plus interest and penalties. We assume no liability for any such additional penalties or assessments.

​

Errors and Omissions: We cannot be aware of all omissions, defalcations, or other irregularities, should any exist for any of the services that we provide to you. In the event you receive a tax adjustment, please send it to us to confirm the accuracy of the adjustment and to determine your ability to appeal before paying or signing off on the adjustments.

​

If you or Smith Tax Service becomes aware of an error or omission on your tax return, and an amendment is necessary, we will prepare the appropriate amendments based upon the information and/or supporting documentation provided to us. It will be your responsibility to file the return and pay any additional tax that is due. As the taxpayer, you will be responsible for any additional taxes that result from an amendment or adjustment to your tax return, even if the error is a result of our error. Any penalties and interest that are a result of us omitting or misstating information on your initial return based upon the initial information provided to us will be refunded by Smith Tax Service, up to the amount of fees paid for the return preparation. Any claim for damages will expire within one year of the filing date of your return. Our liability for any errors or omissions will be limited to the amount of fees paid and will not include liability for any consequential damages.  Our liability is also limited to you, and any recommendations provided to you may not be used or relied upon by any other parties. Disputes with the IRS regarding the interpretation of the tax law will not constitute an error or omission if you have been advised of the difference in opinion.

​

What is our Completion Timeline/ Policy for Extensions of Time to File Tax Returns?

Filing Deadline: The filing deadline for tax returns for most partnerships and S corporations is March 15, and the deadline for tax returns for most individuals and C corporations is April 15. If you do not provide us full documentation by March 15, we may be required to file an extension for your return, and complete the processing of your return as time permits.

​

If you prefer to file by April 15 (without an extension), then be sure to send your information early – we recommend by March 15. Our firm works on a first-in, first-out basis. If you send your complete information by that date, then we typically finalize your returns in time to file by the original deadline. However, your submittal by the cut-off date is not a guarantee that we will complete your returns by the original due date.

​

In some cases, you or we may determine that additional time is needed to file your returns. For example, your return may include complexities that require further analysis or clarifications; you may be waiting on missing forms or other information after the cut-off; we may discover close to the deadline that additional information is needed; we may experience unprecedented high volumes; or you may want to take additional time to answer questions, review your returns, or send your e-file authorizations back to us.

We reserve the right to unilaterally file and place any client on extension if we determine that our firm will be unable to complete a true, accurate, and complete tax return by the filing deadline.

​

We also may file “protective” extensions at our discretion, during the last week of the filing deadline, to allow our clients more time to review their returns, ask questions, and submit their e-file forms, and to allow our team the necessary time to make any updates, complete reviews, and e-file.

​

If you submit your information to us after March 15, we will automatically file an extension on your behalf. In some years, we can begin (and sometimes complete) returns that come in after the cut-off date, by the original filing deadline. However, we make no guarantees, and we often file protective extensions for these returns as a matter of course, typically soon after we receive your tax information.

If you would like us to file an extension on your behalf, or if you need more time to gather your information and thus require an extension, just let us know. If you have not yet sent your tax information, then we require that you at least send us an executed version of this agreement, and we will invoice you for the extension. Once it is paid, we will file for you. Failure to timely request an extension of time to file can result in penalties for failure to file tax returns, which accrue from the original due date of the returns, and can be substantial.

​

Extension Payments: Even if your tax return filing deadline is extended, all taxes owed must still be paid by the original filing due date. Otherwise, the tax authorities will charge penalties based on the amount owed and the date you ultimately pay it. Options for estimating and paying extension payments:

1. Make a rough, conservative (high) estimate, pay it by the original filing deadline, and expect a refund when the return is filed. It allows clients to avoid interest and penalties, while also knowing that if they have paid too much, the rest will be refunded when they file their returns (or can be applied to next year’s taxes, if they prefer). To calculate their estimated payment, clients consider their historical trends and changes from the prior year, and make a rough estimate. States typically apply higher interest rates than the IRS, so we advise being especially conservative (high) when making state payments.

2. Skip the extension payment and just pay any tax due, with interest and penalties, when the return is filed. Some clients prefer this approach for its simplicity. It generally makes sense when they do not anticipate large balances due, and their situation is similar year-to-year.

​

Penalties and Interest Charges: Federal, state, and local tax authorities impose various penalties and interest charges for non-compliance with tax laws and regulations, including failure to file extensions or returns, late filing of returns, and underpayment or late payment of taxes. You will be responsible for the payment of any additional tax, penalties, and interest charges imposed by tax authorities.

​

What Happens Once We Deliver Your Returns to You?

Sign & E-File Your Return: Review all tax-return documents carefully before signing them. Once you sign and deliver to us the e-file authorization for your return, your return will be considered final and we will send your file to the IRS and/or state. Tax returns will not be filed electronically until fees are paid. Once it is sent, it cannot be undone and any changes or additional information will necessitate the filling of an amended return. Once we receive it, we will send you confirmation of e-file acceptance. You are responsible for maintaining proof of timely filing.

​

Paper Filed Returns: If part or all of your forms or return(s) must be paper filed, you are responsible for timely signing those forms/returns and mailing the returns by the deadlines. You are also responsible for maintaining proof of timely filing. To be timely filed, any mailed returns must be U.S. postmarked by the deadline (or clear U.S. customs by the deadline). In some cases, the IRS disregards the postmarked date and will issue late-filing penalties if they do not receive your returns by the deadline. Although you can fight these penalties by showing proof of timely mailing, we recommend sending your returns as early as possible to avoid any uncertainty. In addition, we recommend that you make copies of any final signed returns and mail your returns certified mail with return receipt, so that you have proof for your records. We are unable to mail your returns or send payments to the tax authorities on your behalf.

​

Pay Any Taxes Owed: You are responsible for making any tax payments directly to the tax authorities. We provide current information on how to pay the tax authorities in your tax return, as well as information on setting up payment plans on our website.

When you file electronically, you have the option to have your refund directly deposited to, or amounts owed withdrawn directly from, one or more bank accounts. If you elect direct deposit/ withdrawal or refunds/ amounts owed, we cannot change the bank information after filing your return.

​

Additional Information Provided After Filing: In reviewing their returns, some clients discover that they forgot to send us certain forms or information or inadvertently sent us incorrect information. We highly encourage you to be thorough in the original data you provide to us and before signing your return.

​

If you provide additional information after we have delivered your return, we will assess a fee to update your return with the new information. If you provide such information close to a deadline, we may not be able to update your return by the deadline. In such a case, we may advise you to make payments before the deadline, to minimize interest and penalties, and we will update your returns as soon as we are able to do so.

​

How Long Should You Keep Your Records?

You should retain all documents, canceled checks, and other data that are used when preparing your tax return. These may be necessary to prove the accuracy and completeness of the returns to a taxing authority. It is your responsibility to keep your tax records for 7 years in the event of an audit. Additionally, any records related to the purchase or sale of real property should be kept permanently. We will return your original records and a copy of your completed return (either physical or PDF) to you at the end of this engagement. Store these records, along with all supporting documents, in a secure location.

 

How Do We Store Your Information?

We take care to safeguard your information. In addition, we are prohibited by law and by professional standards from sharing your information (subject to certain limitations, described below) and from using it for unauthorized purposes.

​

Sharing with Third Party: In some cases, you may wish to grant us a specific legal authorization that enables us to share your tax information with a family member, investment advisor, or other party, for a specific purpose. We will not disclose any of your privileged information, unless required by law, without written instructions from you. If you wish for us to disclose tax records to anyone, you must sign and date a Consent to Disclosure of Information before we can legally share that information.

​

File Maintenance: We retain copies of your records and our work papers from your engagement for up to four years, after which these documents will be destroyed. We also retain electronic copies of completed tax returns for seven years, after which these documents are destroyed. All documents retained by Smith Tax Service are stored in compliance with IRS publication 4557, as well as the FTC safeguard rules.

​

Sharing of Information with Spouse on Joint Tax Returns: If the tax returns prepared in connection with this engagement are filed using the married filing jointly filing status, both spouses are deemed to be clients of the firm under the terms of this agreement. Both spouses acknowledge that there is no expectation of privacy from the other concerning our services in connection with this agreement. We are at liberty to share with either of you, without prior consent of the other, documents and other information concerning the preparation of your tax returns.

​

Method of Communication: Our firm may utilize electronic communications (e.g., call, text, and e-mail) during this engagement. You consent to our firm’s use of electronic communications and recognize and accept the inherent risks related to these forms of communication (including the security risks of interception of or unauthorized access to such communications, the risks of corruption of such communications, and the risks of viruses or other harmful intrusions). We provide a secure portal for providing any documentation electronically to protect your information.

​

In the interest of facilitating our services to you, we may send data over the Internet, temporarily store electronic data via computer software applications hosted remotely on the Internet, or utilize cloud-based storage. Your confidential electronic data may be transmitted or stored using these methods. 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 electronic data secure in accordance with our obligations under applicable laws, regulations, and professional standards.

​

You recognize and accept that we have no control over the unauthorized interception or breach of any communications or electronic data once it has been transmitted or if it has been subject to unauthorized access while stored, notwithstanding all reasonable security measures employed by us. You consent to our use of these electronic devices and applications during this engagement.

​

When and How Do Our Services Conclude under this Engagement?

We expect to begin our services upon receipt of this executed agreement, the completed tax questionnaire/organizer (either online or via drop off), and all documents requested either in the questionnaire/organizer or by our office.

Our services will conclude upon the earlier of:

• For e-filed returns, the e-filing and e-acceptance of your tax returns by the appropriate tax authorities, or

• For paper-filed returns, delivery of your tax returns to you (you are required to sign & mail them yourself), or

• Written notification by either party that the engagement is terminated, or

• Twelve (12) months from the execution date of this agreement.

 

Disassociation or Termination of Engagement: Either party may terminate this agreement at any time upon written notice of termination to the other party. In the event of termination, you will be responsible for fees earned and expenses incurred through the actual date of termination. Should termination occur prior to the completion and delivery of the tax returns, then we will invoice you (on an hourly basis) for any work conducted between the time services were authorized (by the signing of this engagement letter) and the termination of the engagement. We will also return any original documents to you.

​

We reserve the right to terminate this Agreement for failure to provide accurate documentation within a timely manner after requested by us; inconsistencies between your verbal or written statements and the documentation provided, unless explained to our satisfaction; repeated missed or late appointments without at least 24 hours’ notice; or if we determine, in our professional judgment, that a tax position has no reasonable basis, we inform you of this, and you instruct us to take such position notwithstanding our determination. In the event that we terminate this Agreement for any of the above-stated reasons, you agree to pay for all work performed to the date of termination. We further reserve the right to terminate this Agreement if, in our professional judgment, we are not competent to prepare your return due to the complexity of your tax issues. In the event that we terminate this Agreement due to the complexity of the tax issues involved, we will return any amounts paid to date, and you will not be responsible for payment for any work performed.

 

Other Provisions

Neither party shall be liable to the other for any delay or failure to perform any of the services or obligations set forth in this agreement due to causes beyond its reasonable control.

​

Limitation of Liability: Except to the extent finally determined to have resulted from the gross negligence or other intentional misconduct of Smith Tax Service, Smith Tax Service’s liability to pay damages for any losses incurred by the client as a result of breach of conduct, negligence or other tort committed by Smith Tax Service is limited to the total amount of fees charged by Smith Tax Service for the particular service provided under this agreement to which such claim relates.

​

Agreement of Terms

By signing below, you agree that you have read and fully understood the terms of engagement with Smith Tax Service.  Furthermore, you declare that the forms and information provided to Smith Tax Service are to the best of your knowledge true, correct, and complete. It is also the client’s responsibility to review and understand the information shown on the returns prior to signing and filing them.

​

Thank you for the opportunity to be of service. If you have any questions, contact our office at 559-381-4476.

Smith Tax Service    

          

Accepted By: (Both spouses must sign for preparation of joint returns.)