To: << Your Name Here >>
From: Kiwi Tax Service
Thank you for selecting Kiwi Tax Service to assist you with your tax affairs. This letter confirms the terms of our engagement with you and the nature and extent of services we will provide.
Services Provided
We will prepare your 2008 federal and all state income tax returns required using information you provide to us. We suggest you use our “Organizer” to help you gather the information required for a complete return. It will help you avoid overlooking important information and contribute to efficient preparation of your returns. We can email it or you can download from the web site, in the Tax Info section.
We will use our judgment and experience in resolving questions where the tax law is unclear, or where there may be conflicts between the taxing authorities’ interpretations of the law and other supportable positions. Unless you instruct us otherwise, we will apply the “realistic possibility of success” standard to resolve such issues in your favor where possible.
Services Not Provided
If you provide us with income and expense reports from spreadsheets, accounting programs, or checkbook programs we will not include any procedures to discover irregularities in how you have classified or reported these items. We strongly suggest you double check your expense classifications against the items listed in our organizer. However, we are required by federal regulations to ask for clarification of information that is inconsistent or incomplete.
Other Information
We will retain electronic copies of records you supplied to us along with our work papers for this engagement for a period of five years minimum. We will destroy any copies of your information by shredding them. All of your original records will be returned to you after your returns have been filed. You should keep the original records in secure storage. It is our intention to keep your electronic files indefinitely if the cost to do so does not become prohibitive.
The law imposes a penalty when a taxpayer has a “substantial understatement” of tax liability. For individuals, a substantial understatement exists when the understatement for a year exceeds 10 percent of the tax required to be shown on the return. The penalty is 20 percent of the tax underpayment. One of the biggest problems we have encountered with preparing taxes is not reporting all income you have received during the year. Many times this is as simple as overlooking interest from a checking or savings account, gambling winnings, or earnings that you feel should not be reported. Please be advised that if the IRS discovers unreported income it potentially opens your return for audit and exposes all items on your return to strict substantiation rules.
The law imposes a penalty of 20 percent on any underpayment that results from negligence or disregard of rules or regulations. Negligence “includes any failure to make a reasonable attempt to comply with the tax law. Disregard “includes any careless, reckless or intentional disregard.” Taxpayers may avoid all or part of the penalty by showing that they acted in good faith and by demonstrating that they have a reasonable basis for the understatement:
According to law you are responsible for your returns, so it is very important, and a requirement by us that you review your returns before filing as to discover any missing information and for you to ask any questions and receive clarification concerning how your returns were prepared.
Your returns may be selected for audit by a taxing authority. Any proposed adjustments are subject to appeal. In the event of a tax examination, we will assist you with clarification of items that are being questioned up to filing any appeals. Kiwi Tax Service currently cannot provide representation beyond the appeals process. We need to be notified as quickly as possible when you receive a notice from the IRS or state taxing authority as your initial response usually has a thirty-day time limit
Fees and Return Information
Our fees must be paid before submitting your returns electronically or sent to you for paper filing. Our fees and a listing of the returns prepared will be given to you via an invoice. Once we have received your payment you are given the opportunity to review the returns. If after review you are not 100 % satisfied with the returns we will make any adjustments to ensure that you are completely satisfied.
If after making any adjustments you do not want us to file the returns and wish to have another firm prepare your returns we will refund the amount you paid to us upon presenting us with a paid invoice from the other preparing firm or individual and a copy of the page of the return showing where the firm or individual signed the return as the paid preparer. If you paid us by credit card your refund will be reduced by three percent, which is the processing fee we have paid.
Limits of Liability
It is your responsibility to provide information required for preparation of complete and accurate returns. You will not hold Kiwi Tax Service responsible or accountable for any penalties or interest imposed by the IRS or state taxing authorities due to your understatement of income or misrepresentation of deductions.
If Kiwi Tax Service fails to input on your returns any income information you provided to us we will pay you any penalties and interest incurred for this omission. Reimbursement of the penalty and/or interest will be subject to us first requesting abatement from the IRS or state authorities.
If it is determined that a mathematical error occurred from the software we use to prepare your returns our liability for penalties and/or interest imposed will be limited to the amount of our fee for preparing your return, subject to the request for abatement of the penalty and interest, and must be discovered during the period of one year from the due date of the return including extensions.
According to law and IRS policy mandated by Circular 230 the following statement is required and will be included in all communications, including email by our firm.
IRS regulations require us to advise you that, unless otherwise specifically noted, any tax advice given in communications (including any attachments, enclosures, or other accompanying materials, including information on the web site) was not written or intended to be used, and cannot be used for the purpose of avoiding penalties imposed by federal or state taxing authorities.
We appreciate your confidence in us. Please call if you have questions before accepting this engagement. If you accept the terms of this agreement please enter your Client ID given you and press the accept button, otherwise press the decline button. Client ID Number: << Enter Your Client ID >> You will press the accept or decline button. If you decline please contact us to discuss the terms of our engagement.
We appreciate your confidence in us. Please call if you have questions before accepting this engagement. If you accept the terms of this agreement please enter your Client ID given you and press the accept button, otherwise press the decline button.
Client ID Number: << Enter Your Client ID >>
You will press the accept or decline button. If you decline please contact us to discuss the terms of our engagement.