We will rely on the accuracy and completeness of the information you provide.
You are responsible for maintaining all records required to support the accuracy and completeness of your tax return(s), including documentation for income, deductions, credits, and other reported items.
You confirm that such documentation exists and can be produced if requested by tax authorities. You agree to hold us harmless from any liability—such as additional tax, penalties, interest, or professional fees—resulting from disallowed items due to insufficient documentation.
Our work is not designed to detect errors, fraud, or illegal acts. However, if we identify any material issues in the course of our work, we will inform you—unless they are clearly inconsequential. We may also request clarification regarding the information you submit, however we are not obligated to do so.
Federal, state, and local tax authorities impose various penalties and interest charges for non-compliance with tax laws and regulations including failure to file or late filing of returns, and underpayment of taxes. You, as the taxpayer, remain responsible for the payment of all tax, penalties, and interest charges imposed by tax authorities.
We rely on the accuracy and completeness of the information you provide to us in connection with the preparation of your tax returns. Failure to disclose or inadequate disclosure of income or tax positions may result in the imposition of penalties and interest charges.
Our engagement cannot be relied upon to disclose errors, irregularities or illegal acts, including fraud or defalcations, which may exist. We may inform you of any matters that come to our attention. We cannot be responsible for the acts, omissions, or solvency of any broker, agent, or independent contractor or other advisor or professional engaged to work with you on any part of your business and/or personal tax and accounting.
We rely upon you to provide us with accurate information to advise you in your business and/or personal tax and accounting. Our signature upon your business and/or personal tax return indicates we have prepared the return in accordance with all applicable laws.
Unless you indicate otherwise, our firm may transmit confidential information that you provide to us to third parties in order to facilitate delivering our services to you. Examples of such transmissions may include the access to your contact information by members of our team (independent contractors such as consultants, administrative assistants, or third-party developers), transfer of accounting information and other data files via the internet, online back-up services, website developer and hosting services (for newsletter and order processing), credit card processing company, etc.
We only work with established, reputable companies that have demonstrated their commitment to safeguarding your data. Please feel free to inquire if you would like additional information regarding the transmission of confidential information to entities outside the firm. We will ensure that third-party service providers who we share information with agree to protect your confidential information and to use it only in connection with the services they perform for us.
In connection with this engagement, we may communicate with you or others via email transmission. As emails can be intercepted and read, disclosed, or otherwise used or communicated by an unintended third party, or may not be delivered to each of the parties to whom they are directed and only to such parties, we cannot guarantee or warrant that emails from us will be properly delivered and read only by the addressee. Therefore, we specifically disclaim and waive any liability or responsibility whatsoever for interception or unintentional disclosure of emails transmitted by us in connection with the performance of this engagement. In that regard, you agree that we shall have no liability for any loss or damage to any person or entity resulting from the use of email transmissions, including any consequential, incidental, direct, indirect or special damages, such as loss of revenues or anticipated profits, or disclosure or communication of confidential or proprietary information.
All original documents you provide to us in connection with this engagement remain your property. We reserve the right to make and retain a reasonable number of copies for our records.
Additionally, we reserve the right to charge a fee for the handling, organization, or return of physical documents, especially where such handling requires significant administrative time or secure delivery methods.
We are not a host or custodian of your data. You are solely responsible for maintaining your own records, including copies of any materials we may provide. Any client portal we provide access to is intended solely as a file transfer mechanism and not a long-term storage solution. Information may be removed at any time without notice.
If you choose to transmit or request delivery of confidential information by means other than a secure portal, you do so at your own risk. You agree that we bear no liability for any resulting damages, including but not limited to:
During our work, we may use third-party applications—including internet-based providers—to deliver certain services . We are not liable for data retention, access, or any other aspect of the third party’s performance, even if we subsidize their cost.
You are responsible for deciding whether to maintain hard copies of your original documents or rely solely on digital versions. We retain records for at least one (1) year following and engagement's completion; however, these are not a substitute for your originals, and unforeseen events may limit their availability.
We will return any original paper documents you provide once our work is complete. Our firm does not retain physical documents as a matter of policy, although we may keep select copies essential to our records. You are responsible for securing your original documentation for future use.
To enhance our services to you, we will utilize client portals as a means to promote a collaborative, virtual workspace in a protected, online environment.
Client portals are a tool that permits real-time collaboration across geographic boundaries and time zones and allows Elizabeth Bystrom CPA, Ltd. and you to share data, engagement information, knowledge, and deliverables in a protected environment.
In order to use client portals, you may be required by the provider of our client portal software to execute a client portal agreement and agree to be bound by the terms, conditions and limitations of such agreement.
You agree that we have no responsibility for the activities of third-party client portal software, and agree to indemnify and hold us harmless with respect to any and all claims arising from or related to the operation of such third-party software products.
In conducting this engagement, information acquired by us in the course of the engagement is subject to strict confidentiality requirements. That information will not be disclosed by us to other parties except as required or allowed for by law, or with your express written consent. This applies even if you are no longer a client.
We are committed to safekeeping of your confidential information, and we maintain physical, electronic, and procedural safeguards to protect it. However, we may be required by law to disclose what may otherwise be considered confidential information of yours if requested by the IRS or federal government, or if you disclose that information to a third party.
You assume all responsibility relating to adherence with privacy and disclosure requirements relating to the use and sharing of information in your industry. If your business or industry requires greater privacy or security protections than those provided in this letter, it is your responsibility to ensure that your disclosure of information to us is in compliance with such requirements, and you agree to indemnify and hold us harmless in connection with any claims arising from your failure to do so.
You acknowledge that the proprietary information, documents, materials, management techniques, and other intellectual property we use are a material source of the services we perform and that these were developed prior to our association with you. Any new forms, software, documents, or intellectual property we develop in this engagement for your use shall belong to us, and you shall have the limited right to use them solely within your business. All report templates, manuals, forms, checklists, questionnaires, letters, agreements (including this one), and other documents, which we make available to you, are confidential and proprietary to us.
Any and all new documents created as a result of our work will automatically become our property. Neither you, nor any of your agents, will copy, electronically store, reproduce, or make available to anyone other than your personnel, any such documents. This agreement will apply to all materials whether in digital or "hard copy" format.
Services may be billed on a fixed rate or hourly billing rate, as outlined in your engagement letter.
Our bills are due and payable upon receipt.
If an extension of our services is requested, we will discuss our fee arrangements at that time.
If you choose to extend or add additional services, a separate engagement letter will be provided. These services will be billed separately.
We reserve the right to suspend our services or to withdraw from this engagement in the event that any of our invoices are deemed delinquent. In the event that any collection action is required to collect unpaid balances due to us, you agree to reimburse us for our costs of collection, including lawyers' fees.
We reserve the right to update our Terms and Conditions. Any material changes will be communicated to you in writing or posted on our website.
Our services will be performed in accordance with the AICPA's Statements on Standards for Tax Services (SSTSs) and U.S. Treasury Circular 230.
We are committed to exercising the level of care expected of a reasonable tax return preparer.
In cases of unclear tax law, we will use professional judgment to resolve questions in your favor when substantial authority supports the position. If multiple interpretations exist, we will explain the available options. We will follow your selected position if it aligns with authoritative tax guidance, such as the Internal Revenue Code, regulations, rulings, and relevant case law.
If tax authorities later dispute your position, additional tax, penalties, or interest may apply.
You agree to release us from liability related to such outcomes, including professional fees.
If your tax returns are filed jointly, both spouses are considered clients under your service Agreement.
Accordingly, neither spouse should expect privacy from the other regarding services rendered.
We may share documents and information related to the tax return with either spouse, without separate consent.
If you are married, and subsequently pursue filing for divorce, both spouses will both be required to sign a conflict-of-interest waiver, as you may have conflicting interests with your spouse.
We will not be able to advise either spouse independently of the other unless one of you is released as a client from our firm.
Determination of filing status while during the divorce process can be complicated. Electing a filing status of married filing jointly establishes joint liability for taxes owed and requires that certain tax-related decisions be made prior to the preparation of income tax returns.
Consequently, we may require a letter of instruction from both of your divorce attorneys [or, if the spouse(s) is/are unrepresented, we will require a letter of instruction from the unrepresented spouse(s)] identifying items needed to prepare your tax return and your agreement to same before the tax returns can be prepared.
In the event that you elect to file separate tax returns, you will both be required to sign new engagement letters prior to the preparation of your returns.
We do not respond to direct inquiries from banks, mortgage brokers, or other third parties regarding your tax return information.
We also do not release copies of tax returns or provide confirmations to any third party unless the request is initiated and authorized by you.
If you wish for us to communicate with a third party, you must submit a written authorization that clearly identifies the recipient, the information to be shared, and your signature.
Upon receipt of this authorization, we may, at our discretion, provide the requested materials in accordance with firm policy and applicable regulations
Our advice is based on current tax reference materials, facts, assumptions, and representations, all of which may change over time. Reference sources include the Internal Revenue Code, Treasury regulations, rulings, procedures, court decisions, and related guidance.
We do not update our advice after the engagement ends for later legal, administrative, or judicial developments. When providing written advice on federal tax matters, we comply with the standards of Circular 230 §10.37.
If you intend to take a tax position based on advice from another advisor, you must obtain their written statement confirming the position meets the applicable standard—such as “realistic possibility,” “substantial authority,” or “more likely than not.”
In preparing your return, we are required under Circular 230 §10.22(b) and AICPA SSTS No. 1 to exercise due diligence and maintain a good faith belief that the position has, at minimum, a realistic possibility of being sustained if challenged.
Additional research and related charges may apply.
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 on the return and we disclose this tax position in a separate attachment to the tax return.
The law imposes substantial penalties on taxpayers and tax advisors for failure to disclose listed and other reportable transactions on Form 8886, Reportable Transaction Disclosure Statement. In general, reportable transactions are potentially abusive transactions identified by the IRS that have a primary purpose of tax avoidance, including but not limited to listed transactions, confidential transactions, transactions with contractual protection, loss transactions, and transactions of interest (a definition of "reportable transactions" is located at https://www.irs.gov/instructions/i8886 and includes a link to a summary of listed transactions).
The law imposes substantial penalties on taxpayers and tax advisors for failure to disclose tax shelters on Form 8271, Investor Reporting of a Tax Shelter Registration Number. A tax shelter is defined in IRC §6662((d)(2)(C) as a partnership or other entity, investment plan or arrangement, or any other plan or arrangement if a significant purpose of such partnership, entity, plan or arrangement is the avoidance or evasion of Federal income tax.
Please see your engagement letter for details on our Limitations of Responsibility.
Our signature on your tax return confirms preparation in accordance with applicable laws, based solely on the data you furnish.
You have final responsibility for the accuracy of your tax returns.
We will provide you with a copy of your electronic tax returns and accompanying schedules and statements for review prior to filing with the IRS, state and local tax authorities, as applicable. You agree to review and examine them carefully for accuracy and completeness.
You will be required to verify and sign a completed form authorizing us to file your return electronically
In the event that you do not wish to have your tax returns filed electronically, please contact our firm.
Additional procedures will apply. You will be responsible for reviewing the paper returns for accuracy, signing them, and filing them timely with the tax authorities.
It may become necessary to apply for an extension of the filing deadline if there are unresolved issues or delays in processing, or if we do not receive all of the necessary information from you on a timely basis.
Applying for an extension of time to file may extend the time available for a government agency to undertake an audit of your return or may extend the statute of limitations to file a legal action.
An extension is an extension of time to file, not an extension of time to pay. All taxes owed are due by the original filing due date of your return. Additionally, extensions may affect your liability for penalties and interest or compliance with governmental or other deadlines.
If we deem it necessary to extend your return, and you do not wish to engage our firm to apply for extensions of time to file tax returns on your behalf, you must notify us of this request in writing. We reserve the right to withdraw from the engagement if we disagree on the filing of an extension of your return.
In some cases, your signature may be needed on such applications to extend prior to filing. 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.
If the tax returns prepared in connection with our work are filed using the married filing jointly, and you subsequently pursue filing for divorce, we require that you inform us of this change as soon as is reasonably possible.
You are responsible for maintaining adequate documentation to substantiate the accuracy and completeness of your tax returns.
You should retain all documents that provide evidence and support for reported income, credits, deductions, and other information on your returns, as required under applicable tax laws and regulations.
You represent that you have such documentation and can produce it, if necessary, to respond to any audit or inquiry by tax authorities.
You agree to hold our firm harmless from any liability including but not limited to, additional tax, penalties, interest and professional fees resulting from the disallowance of tax deductions due to inadequate documentation.
You are responsible for informing us of all foreign assets owned directly or indirectly, including but not limited to financial accounts with foreign institutions, other foreign non-account investments, and ownership of any foreign entities, regardless of amount.
If upon review of the information you have provided to us, including information that comes to our attention, we believe that you may have additional filing obligations, we will notify you.
These assets include any ownership interests you directly or indirectly hold in businesses located in a foreign country, and any assets or financial accounts located in a foreign country over which you have signature authority.
Based upon the information you provide, this information will be used to calculate any applicable foreign tax credits.
We will also use this data to inform you of any additional filing requirements, which may include FinCEN Form 114, Report of Foreign Bank and Financial Accounts ("FBAR").
Failure to file required forms can result in the imposition of both civil and criminal penalties, which may be significant.
The FBAR is not a tax return and its preparation is not within the scope of a tax return engagement.
If you ask us to prepare the FBAR, we will confirm this representation in a separate engagement letter.
Failure to timely file the required forms may result in substantial civil and/or criminal penalties.
By your signature on your engagement letter, you agree to provide us with complete and accurate information regarding any foreign investments in which you have a direct or indirect interest, or over which you have signature authority, during the above referenced tax year.
The foreign reporting requirements are very complex. If you have any questions regarding the application of the reporting requirements for your foreign interests or activities, please ask us and we will respond in writing.
Only advice that is in writing may be relied upon.
We assume no liability for penalties associated with the failure to file or untimely filing of any of these forms.
You are responsible for complying with the tax filing requirements of any other country.
You acknowledge and agree that we have no responsibility to raise these issues with you and that foreign filing obligations are not within the scope of this engagement.
The IRS considers virtual currency (e.g., Bitcoin) as property for U.S. federal income tax purposes.
As such, any transactions in, or transactions that use, virtual currency are subject to the same general tax principles that apply to other property transactions.
If you had virtual currency activity during the tax year, you may be subject to tax consequences associated with such transactions and may have additional reporting obligations.
Your agree to provide us with complete and accurate information regarding any transactions in, or transactions that have used, virtual currency during the applicable tax year.
The IRS and many states impose penalties for substantial understatement of tax.
To avoid these penalties, a position must be supported by substantial authority or adequately disclosed using Form 8275 or 8275-R, as appropriate.
You agree to inform us if you wish to disclose a position on your return.
If you request assistance in determining whether substantial authority exists and we agree to conduct research, this will be confirmed in a separate agreement.
It is your responsibility to reach out if further guidance is needed.
If we determine that disclosure is required, you consent to attach the appropriate form after we consult with you.
Should the position be challenged, you acknowledge and accept responsibility for any resulting tax, penalties, interest, or related professional fees.
You agree to advise us of any tax shelters and/or reportable transactions identified in tax reference materials.
Unless a reportable transaction is more likely than not to be sustained on its merits, IRC §6662A, Imposition of Accuracy-Related Penalty on Understatements with Respect to Reportable Transactions, requires us to disclose the reportable transaction in a separate attachment to the tax return.
Similarly, unless a tax shelter is more likely than not to be sustained on its merits, IRC §6662(d)(2)(C), Imposition of Accuracy-Related Penalty on Underpayments, requires us to disclose tax shelters in a separate attachment to the tax return.
If you do not consent to a required disclosure, we may be unable to prepare your tax returns.
You agree to hold our firm harmless with respect to any liability including but not limited to, additional tax, penalties, interest and professional fees resulting from your failure to timely notify us, in writing, of any tax shelters and/or reportable transactions identified in tax reference materials in order to facilitate the timely preparation and filing of your tax returns.
The due date of your business return depends on the type of entity.
S Corporation
C Corporation
Partnership
Sole Proprietorship as reported on Schedule C of your Individual Return
It may become necessary to apply for an extension of the filing deadline if there are unresolved issues or delays in processing, or if we do not receive all of the necessary information from you on a timely basis.
Applying for an extension of time to file may extend the time available for a government agency to undertake an audit of your return or may extend the statute of limitations to file a legal action.
An extension is an extension of time to file, not an extension of time to pay. All taxes owed are due by the original filing due date of your return. Additionally, extensions may affect your liability for penalties and interest or compliance with governmental or other deadlines.
If we deem it necessary to extend your return, and you do not wish to engage our firm to apply for extensions of time to file tax returns on your behalf, you must notify us of this request in writing. We reserve the right to withdraw from the engagement if we disagree on the filing of an extension of your return.
In some cases, your signature may be needed on such applications to extend prior to filing. 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.
You have final responsibility for the accuracy of your tax returns.
We will provide you with a copy of your electronic tax returns and accompanying schedules and statements for review prior to filing with the IRS, state and local tax authorities, as applicable.
You agree to review and examine them carefully for accuracy and completeness.
You will be required to verify and sign a completed form authorizing us to file your return electronically
And any similar state and local equivalent authorization form before your returns can be filed electronically.
In the event that you do not wish to have your tax returns filed electronically, please contact our firm. Additional procedures will apply. You will be responsible for reviewing the paper returns for accuracy, signing them, and filing them timely with the tax authorities.
You are responsible for ensuring that personal expenses, if any, are segregated from business expenses and that expenses such as meals, travel, vehicle use, gifts, and related expenses are supported by necessary records required by the IRS and other tax authorities.
At your written request, we are available to provide you with written answers to your questions on the types of supporting records required.
You are responsible for determining your tax filing obligations with any state or local tax authorities, including, but not limited to, income, franchise, sales, use, property or unclaimed property taxes.
You agree that we have no responsibility to research these obligations or to inform you of them. If upon review of the information you have provided to us, including information that comes to our attention, we believe that you may have additional filing obligations, we will notify you of this responsibility in writing and ask you to contact us.
If you ask us to prepare these returns, we will confirm this representation in a separate engagement letter.
On June 21, 2018, the U.S. Supreme Court reversed the long-standing physical presence nexus standard in South Dakota v. Wayfair, Inc. et. al.
This decision significantly changes the landscape of sales and use tax compliance, especially for online sellers. If you wish to understand the impact of the decision on your business, we will confirm this in a separate engagement letter.
You are responsible for maintaining adequate documentation to substantiate the accuracy and completeness of your tax returns.
You should retain all documents that provide evidence and support for reported income, credits, and deductions on your returns, as required under applicable tax laws and regulations.
You are responsible for the adequacy of all information provided in such documents. You represent that you have such documentation and can produce it if necessary, to respond to any audit or inquiry by tax authorities.
You agree to hold our firm harmless from any liability including but not limited to, additional tax, penalties, interest and professional fees resulting from the disallowance of tax deductions due to inadequate documentation.
If you realized income, loss or expense from a business or supplemental income or loss, the reporting requirements of federal and state income tax authorities apply to such income, loss or expense.
You are responsible for complying with all applicable laws and regulations pertaining to such operations, including the classification of workers as employees or independent contractors and related payroll tax and withholding requirements.
You acknowledge and confirm that you, in consultation with other professional advisors, as needed, are responsible for determining the correctness of any worker classification.
Payroll tax withholding and related employer payroll tax implications result from this determination.
We cannot advise you with respect to worker classification and will rely upon your determination of same.
We recommend obtaining a signed contract and signed Form W-9, Request for Taxpayer Identification Number and Certification, or Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals,) from all independent contractors.
You should provide all independent contractors with both forms and let them decide which form (W-9 or W-8BEN) is reflective of their status.
You should also issue a Form 1099-NEC, Nonemployee Compensation, to all unincorporated independent domestic contractors to whom you pay $600 or more for services.
For those who provided a completed Form W-8BEN, a Form 1042-S must be issued to individuals if any payment is made from U.S. sources that would be deemed to be fixed or determinable annual or periodical income or other types of income included in the instructions, even if these payments are subject to a reduced income tax withholding rate or are exempt from income tax withholding due to an income tax treaty.
In addition, state rules should also be reviewed to determine if state taxes are required to be withheld and separate returns completed for any independent contractor.
At your written request, we are available to provide written answers to your questions on required documentation and only written responses from us may be relied upon.
Some of these filings are due as early as January 31st, and significant penalties are assessed for late filing, non-filing and filing of incorrect information.
If you fail to adhere to the filing deadlines, you will be responsible for any penalties, interest and related professional fees for the improper filing.
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