Engagement Letter for Income Tax


This letter confirms the arrangements for your 2012 (tax year) tax return preparation services.




We will prepare your federal and/or state income tax returns in accordance with the appropriate income tax laws.  We will use our judgment in resolving questions where the law is unclear,or where there are conflicts between tax authorities’ interpretations of the law and other supportable positions.  Unless otherwise instructed by you,we will resolve such questions in your favor whenever possible.


It is your responsibility to provide us with all the information needed to prepare complete and accurate returns.  We will not audit or otherwise verify the data you submit, although we may ask for clarification.


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 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 yet 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.




If it is found that Personal Accountant Inc made an error in the preparation of your tax return we will respond to the tax authorities and/or prepare an amendment for you at no additional cost, and we will file an insurance claim for the penalties & interest (P&I) on your behalf, if incurred due to our mistake. Or we will issue a credit for tax preparation.


Personal Accountant Inc is not responsible for any items omitted from your tax return if the items or documents were not provided by you at the time of preparation. Any notices,requests,or adjustments by the tax authorities due to your omissions on your tax return will be an additional cost to you.




The IRS has become increasingly automated and is letting computers examine and input many of the tax returns that are submitted yearly. With automation come errors,and many of the letters and notices issued to taxpayers are not because the tax return was prepared wrong but because the IRS had a computer review it. Sometimes these letters disallow credits that are actually allowed,disallows parents to claim their own children,or simply the IRS wants more proof as to why a deduction or credit was included. Although nothing was wrong on the tax return, now, you the tax payer, must respond to the letter and explain yourself to the IRS – or hire Personal Accountant Inc to do the explaining, which incurs extra cost for you.


We are happy to assist you when the IRS has questions or attempts to alter the original tax return. Changes made by IRS do not usually constitute a “mistake” on the tax return,but rather a “verification” of what’s on the tax return. Service of this kind can cost $100 – $500,depending on the time involved,if you choose to have us help you.


Personal Accountant Inc includes a Prepaid Insurance Plan toward these services for just $50. If at any time, you receive an IRS letter asking for verification, correction, or response, (not incurred due to omitted tax documents), we will take care of the correspondence and research for you. We will NOT pay your tax, but we WILL request a removal of penalties and/or interest on the tax due, if any.