Engagement Letters for the Individual Tax Practitioner

[Elrod]

Tighten language limiting your professional liability...Professional liability insurance carriers and defense attorneys have always proclaimed that engagement letters are one of the first lines of defense in a malpractice cause of action against a CPA.

http://www.journalofaccountancy.com/Issues/2014/Jan/20137591.htm

[Mr. Pencil]

engagement letters are one of the first lines of defense in a malpractice cause of action

This is an excellent article with some new concepts. And the old concepts are important too, like limiting the scope of the engagement. Tax prep has become so very technical while retaining so many subjective choices, the information is used for so many purposes other than taxation, and communication has so many variables, that it seems impossible to avoid something being viewed askance by someone some time.

[michaelmars]

my letter [4 pages so far] includes estimated taxes, tax audits, record retention, business vs personal expenses, use of email, offsite storage, use of estimates, professional judgment, that I will not transmit until an authorization is in hand, that I am not auditing what they give me, assumption that all estimates are paid unless they tell me otherwise, nexus with other states and much more.

most liability carriers put out sample letters and you can pick and choose from theirs.