We are pleased to be able to serve you in preparing your 2021 federal and requested state income tax returns. This letter is to specify and confirm the terms of our engagement with you and to clarify the nature and extent of the services we will provide. Ethical guidelines and our professional liability insurance require this form to be completed- this is to your advantage.

ORCOM US. will prepare your 2021 federal and requested state income tax returns from information you will furnish us. We will not audit or otherwise verify the data you submit, although it may be necessary to ask you for clarification of the information provided through our required due diligence. We might furnish you an organizer and other worksheets to guide you in gathering the necessary information. Your use of an organizer and other worksheets will assist in keeping pertinent information from being overlooked.

The Individual (Form 1040) filing deadline is Friday, April 15, 2022. We will need all information at the earliest possible time but no later than Monday, March 21, 2021 to reduce late filing penalties and interest which are your responsibility. We will need your efile authorization no later than Friday, April 8, 2022. This is in order to meet the tax return filing deadline.

It is your responsibility to provide all the information required for the preparation of complete, comprehensive and accurate tax returns. You should retain all the documents, cancelled checks, and other data that form the basis of income and deductions. These may be necessary to support the accuracy of the tax returns to a taxing authority. Current tax laws state that you have the final responsibility for the income tax returns. You therefore should review them carefully before signing them.

Our engagement cannot be relied upon to disclose errors, irregularities, or illegal acts, including fraud and defalcations, which might exist. We will perform accounting and bookkeeping assistance only as determined to be necessary for preparation of the income tax returns. In addition, we will use professional judgment in resolving questions where the tax law is unclear, or where there may be conflicts between the taxing authorities’ interpretation of the law and other supportable positions. Unless otherwise instructed by you, we will resolve such issues with you and in your favor whenever possible.

If an extension of time to file your tax return(s) is required, any tax that may be due with the tax return(s) must be paid with the extension. Any amounts not paid by the filing deadline are subject to interest and late payment penalties. All costs in this regard are your responsibility but we will assist in verifying the accuracy. This includes any additional fees for the extension as well as any penalties and/or interest that may be due because of the late payment.

Tax law provides for various penalties that may be imposed when taxpayers understate their tax liability. If you would like information on the amount or the circumstances of these penalties, please contact us.

It is your responsibility to provide sufficient amounts of money to pay your taxes so that we can submit them in a timely manner on your behalf. You understand and acknowledge that you are solely responsible for defending any and all claims and paying any and all damages that may arise out of your failure to sufficiently fund your tax obligations in a timely manner; and/or your request that we delay submission of your taxes beyond the due date for any reason whatsoever. Moreover, you agree to defend and indemnify ORCOM US. against any and all claims arising out of or related to any such circumstances.

Your tax returns may be selected for review by the taxing authorities. Any proposed adjustments resulting from that review are subject to certain rights of appeal. In the event of such government review or tax examination, we will be available upon request to represent you and we might issue additional invoices for the time and expenses incurred.

As additional consideration for us to provide you these services, you agree that the extent of our liability for damages to you for any actions taken will not exceed the total amount actually paid by you for our services. You agree that this will be your only remedy and you hereby waive any other claims you have now or in the future for actual, incidental, and consequential damages, including, but not limited to, lost profits and third party claims.

On occasion there may be an opportunity to refer you to another organization for services or products that we believe could be beneficial to you. We may, or may not, receive some form of compensation for such referral. Your signed consent to this arrangement is appreciated.

Regardless of the location of your residence or business, the state of Florida, or the appropriate federal district court having venue, will have jurisdiction over all controversies that might arise regarding this agreement.

It is agreed by us that there are no other agreements or understandings between us relating to the subject matter of this engagement agreement and that it supersedes all prior income tax return engagement agreements and the like, either written or oral, that exist or may have existed for the 2019 tax year. Neither this engagement agreement nor its execution have been induced by any reliance, representation, stipulation, warranty, agreement, or understanding of any kind other than those expressed in this agreement. No change or modification of this engagement agreement shall be valid unless made in writing and signed by the parties.

Either of you or ORCOM US. may cancel this engagement at any time by any form of written or electronic notice. If you cancel and we have performed any work prior to our receiving your cancellation notice, you agree to pay us for such work performed based upon our current rate schedule. We may use any deposits or payments already received and apply them to your account.
 
Record Retention Policy
In accordance with ORCOM US.’s current record retention policy, we will retain our work papers and copies of your financial reports and other records for the engagement for seven years. We will provide you copies of all reports prepared that should be a part of your books and records. If you should need replacements, we will provide additional copies which might incur additional costs to you. All of your original records will be returned to you upon request only. After seven years, our records pertaining to this engagement will no longer be available. Physical deterioration or catastrophic events may shorten the term during which our records will be available. The work papers and files of our firm are not a substitute for your original records. It is agreed and understood that in connection with the performance of our engagement, the work papers prepared by us will remain property of ORCOM US.
 
Privacy Policy
This is being furnished to you as required by the Gramm-Leach-Bliley act of 1999, which addresses in part the protection of individuals’ privacy. This is the annual notice required by law.

ORCOM US. treats any information concerning our clients and former clients with strict confidentiality. Consistent with that policy, we restrict access to nonpublic personal information concerning you to staff members who must have it in order to provide you the products and services for which you have retained us. We do not disclose any personal or confidential information to anyone else without your express permission to do so, except as permitted or required by law. In addition, we maintain physical, electronic and procedural safeguards that comply with federal regulations to guard your nonpublic personal information. We may disclose any of your nonpublic personal information that we collect about our customers, former customers to our affiliates or to non-affiliated third parties as permitted by law. This policy will continue.

Thank you for permitting us to be of service. We value our relationship with you and hope you view us as your most trusted advisor. We will work to continue earning that trust.

ORCOM US.

 

Client Responsibilities 
Please note that it is your responsibility to ensure that all information necessary to prepare your tax return is included in your tax package. Since the returns will be prepared based on the information you provide, you should complete the income tax organizer we provide in assembling the required information. Income from all sources, including those outside the U.S., is required. You should retain all original documents, canceled checks, and other data that form the basis of income and deductions. These may be necessary to prove the accuracy and completeness of the returns to a taxing authority. As the taxpayer, you have the final responsibility for the income tax return(s) and, therefore, you should review them carefully before you have us file them on your behalf. 

 Online Access to Information. To the extent you provide our firm with access to electronic data via a local or online database from which we will download your tax or other information, you agree that the data is accurate as of the date and time you authorize it to be downloaded.

 

Documentation. 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 needed, to respond to any audit or inquiry by tax authorities. You agree to hold harmless our firm and its partners, principals, shareholders, officers, directors, members, employees, agents or assigns with respect to any additional tax, penalties, or interest imposed on you by tax authorities resulting from the disallowance of tax deductions due to inadequate documentation.

 Gift Tax Returns. The IRS considers a gift to be any transfer to an individual, either directly or indirectly, where full consideration (measured in money or money’s worth) is not received in return. Under federal tax law, certain gifts are taxable and subject to an annual gift tax exclusion amount, which is $15,000 per taxpayer for 2019. You are responsible for informing us if gift tax returns are required to be filed. If you ask us to prepare these returns, we will confirm this in a separate engagement letter and additional fees will apply.

Personal expenses. You are responsible for ensuring any personal expenses are segregated from business expenses. For example, meals, travel, vehicle use, client gifts, and related expenses are required by the IRS and other tax authorities to be supported by records. At your written request, we are available to provide you with written answers to your questions on the types of supporting records required for these expenses.

Bartering Transactions, Charitable Contributions, Travel and Phone Expenses, and Business Usage of Autos. IRS audit procedures will almost always include questions on bartering transactions and on deductions that require strict documentation such as charitable contributions, travel, and expenses for business usage of autos, computers, and cell phones. In preparing your returns, we rely on your representations that we have been informed of all bartering transactions and that you understand and have complied with the documentation requirements for your expenses and deductions. If you have questions about these issues, please contact us. 

Virtual Currency. The IRS considers virtual currency, such as Bitcoin, as property for US federal income tax purposes. As such, any transactions in or that use virtual currency are subject to the same general tax principles that apply to other property transactions. If you had virtual currency during the tax year, you may be subject to tax consequences associated with such transactions and may have additional reporting obligations. You agree to provide us with complete and accurate information regarding any transactions in or that used virtual currency during the 2019 tax year. 

ACA Compliance. The 2010 Affordable Care Act mandates additional reporting requirements for your Federal Individual Income Tax

Form 1040. If you have received tax forms (e.g. Form 1095) regarding health coverage or health insurance obtained from the Marketplace, we may require them to prepare your tax return. We will rely on, without independent verification, the information you have provided on the questionnaire to determine your eligibility for credits, application of penalties, and reconciliation of any advanced credit payments where applicable. Some states require verification of health insurance. If this is required for your return, this information must be provided.

State and Local Filing Obligations. 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 we believe you have additional filing obligations upon review of the information you have provided to us or information comes to our attention, 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 upon your written request.

U.S. filing obligations related to foreign investments

Based on the information you provide, you may have additional filing obligations including but not limited to:

·         Ownership of or an officer relationship with respect to certain foreign corporations (Form 5471);

·         Foreign-owned U.S. corporation or domestic disregarded entity (Form 5472);

·         Foreign corporation engaged in a U.S. trade or business (Form 5472);

·         U.S. transferor of property to a foreign corporation (Form 926);

·         U.S. person with an interest in a foreign trust (Forms 3520 and 3520-A);

·         U.S. person with interests in a foreign partnership (Form 8865);

·         U.S. person with interests in a foreign disregarded entity (Form 8858); or

·         Statement of specified foreign assets (Form 8938).

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.

Based upon the information you provide, we will 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”). The FBAR is not a tax return and its preparation is not within the scope of this engagement. If you ask us to prepare the FBAR, and we agree to prepare the FBAR, we will confirm this engagement in a separate agreement.

Failure to timely file the required forms may result in substantial civil and/or criminal penalties. By your signature below, 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.

Foreign filing obligations

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.

Virtual currency

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. You 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.

Ultimate responsibility

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 8879, IRS e-file Signature Authorization, and any similar state and local equivalent authorization form before your returns can be filed electronically.

Receipt of Notices from Tax Authorities. Please immediately provide any tax notices or letters received to our offices. In preparing your returns, we are not responsible for a taxing authority’s assessment of underpayment penalties or interest where this action results from erroneous, incomplete, inaccurate, or misrepresented information provided by you to us since we have no ability to audit your information or search for correct data.

Tax Liability. The client is responsible for the payment of all taxes, penalties, and interest due. 

Timing of the Engagement

We expect to begin our services upon receipt of this executed Agreement, the completed 2021 income tax organizer and all documents requested either in the organizer or by our office.

Our services will conclude upon the earlier of:

the filing and acceptance of your 2021 tax returns by the appropriate tax authorities and mailing or delivery of non-electronically filed tax returns (if any) to you for your review and your filing with the appropriate tax authorities,
written notification by either party that the engagement is terminated, or
one (1) year from the execution date of this Agreement.
Extensions of Time to File Tax Returns

The original filing due dates for your tax returns are April 15, 2022 for federal and. Due to the high volume of tax returns prepared by our firm, you must provide the information needed to prepare the tax returns no later than March 20th. Failure to do so may result in the inability to complete your returns by the original filing due dates.

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. All taxes owed are due by the original filing due date. Additionally, extensions may affect your liability for penalties and interest or compliance with governmental or other deadlines.

To the extent you 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. Our firm will not file these applications unless we receive an executed copy of this Agreement and your express written authorization to file for an extension. In some cases, your signature may be required on such applications 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.

Revisions. Should a tax return require revision after completion through no fault of ours, revision fees will apply. Any tax return requiring revision due to a legitimate preparation error will be revised at no charge. 

Fees & Legal Matters
Fees. Our fee for services will be based upon the extent of the tax forms required for us to properly file your tax return. If a federal, state, or qualified dependent return is requested, but actual preparation determines that there is no filing requirement, we will waive our fee for the no filing determination. We reserve the right to charge based on our standard charges if there is extensive research required to make the “no filing” determination. If additional services are provided which were not originally contemplated under this engagement but were imperative to the completion of the tax return(s) under this engagement, you are authorizing us to perform said services and bill appropriately for the time and/or schedules provided. 

All invoices are due and payable upon completion of the tax returns under this engagement. Tax returns will not be filed with the IRS without payment in full for our services. If you are paper filing or require us to ship your return to you, we will not release or ship your return to you until payment for our services has been received. All shipping costs will be the responsibility of the client. If we provide other services to you, we reserve the right not to begin processing your return until payment for all services rendered has been received.

Timing of the Engagement. We expect to begin our services upon receipt of your 2019 tax documents. If your return is electronically filed, our services will conclude upon the earlier of the filing and acceptance of your 2019 tax returns by the appropriate tax authorities; written notification by either party that the engagement is terminated; or one year from the execution date of this Agreement.  If your return is filed by mail, our services will conclude upon the earlier of delivery to you of your 2019 tax returns for your review and filing with the appropriate tax authorities; written notification by either party that the engagement is terminated, or one year from the execution date of this Agreement.

Paragraph Titles. The paragraph titles used in this agreement are for convenience of reference only and will not be considered in the interpretation or construction of any of the provisions thereof. 

Jurisdiction. Notwithstanding anything contained herein, both firm and client agree that regardless of where the client is domiciled and regardless of where this Agreement is physically signed, this Agreement shall have been deemed to have been entered into at the offices of ORCOM US in Florida, shall be the exclusive jurisdiction for resolving disputes related to this engagement. This engagement shall be interpreted and governed in accordance with the laws of Florida.

Dispute Resolution.  If a dispute arises out of or relates to this contract, engagement letter, or the breach thereof and the dispute cannot be settled through negotiation, the parties agree first to try in good faith to settle the dispute by mediation administered by the American Arbitration Association under Accounting and Related Services Arbitration Rules and Mediation Procedures before resorting to arbitration, litigation, or some other dispute resolution procedure. The costs of any mediation proceeding shall be shared equally by all parties.

 

Ultimate Responsibility. You have final responsibility for your income tax returns. We will provide you with a copy of your income tax returns and accompanying schedules and statements for review prior to filing with the IRS and applicable state and local tax authorities. You agree to review and examine them carefully for accuracy and completeness.

 

You are also required to verify and sign a completed Form 8879, IRS e-file Signature Authorization, and any similar state and local equivalent authorization forms before your return(s) are filed electronically. This is your authorization for us to file your return on your behalf. Under no circumstances will we submit any return without completed authorizations.

 

In the event you do not wish to have your income tax returns filed electronically, please contact our firm. Additional procedures and fees will apply. You will be responsible for reviewing the paper returns for accuracy, signing them, and filing them timely with the tax authorities.

 

It is our policy to initiate service after we receive the fully executed engagement letter. If you are filing as a married couple, both spouses are required to sign this document. If the foregoing correctly states your understanding, please sign and date the enclosed copy of this letter in the space indicated. Return this letter with your client tax organizer and supporting documentation to our office. We sincerely appreciate the opportunity to work with you.