Accounting Strategies Group, LLC | Certified Public Accountants
This letter is to confirm and specify the terms of our engagement for the tax year 2020, and to clarify the nature and extent of the tax services we will provide.
We will prepare the 2020 federal and requested state income tax returns from the information you provide us. We are under no duty to review the information you provide to determine whether you may have a filing obligation with another state. If we become aware of any other filing requirement(s), we will inform you of the obligation and may prepare the appropriate return(s) at your request as a separate engagement.
This engagement letter does not cover the preparation of any financial statements, which, if we are to provide, will be covered under a separate engagement letter.
It is your responsibility to provide all the information required for the preparation of complete and accurate returns. You are responsible for the safeguarding of assets, the proper recording of transactions in the books of accounts, the substantial accuracy of the financial records, and the full and accurate disclosure of all relevant facts affecting the return(s) to us. You should retain all the 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. You have the final responsibility for the income tax returns and, therefore, you should review them carefully before you sign them, or authorize them to be filed electronically.
We may provide you with a questionnaire or other document requesting specific information. Completing those forms will assist us in making sure you are well served for a reasonable fee. You represent that the information you are supplying to us is accurate and complete to the best of your knowledge and that you have disclosed to us all relevant facts affecting the returns. This will include the ownership of or signature authority over any foreign bank accounts and the ownership of any other foreign financial assets. We will not verify the information you give us; however, we may ask for additional clarification of some information. As part of this engagement, we may also recommend year-end adjusting entries be made to your records, and may assist you in doing so.
You should also know that IRS audit procedures will almost always include questions on bartering transactions and on deductions that require strict documentation such as contributions, travel expenses, and expenses for business usage of autos and home offices. 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.
It is important for you to know that the Internal Revenue Code provides for a penalty known as the accuracy-related penalty to be imposed where a taxpayer is determined to show negligence or disregard to rules and regulations, or if the taxpayer makes a substantial understatement of his tax liability. For individual taxpayers, a substantial understatement exists when the understatement for the year exceeds the greater of 10% of the tax required to be shown on the return, or $5,000. The penalty is imposed at a rate of 20% and applies to the underpayment portion.
If, during our work, we discover information that affects prior-year tax returns, we will make you aware of the facts. However, we cannot be responsible for identifying all items that may affect prior-year returns. If you become aware of such information during the year, please contact us to discuss the best resolution of the issue. We will be happy to prepare appropriate amended returns as a separate engagement.
Our work in connection with the preparation of the tax return(s) does not include any procedures designed to discover defalcations or other irregularities, should any exist. The returns will be prepared solely from information provided to us without verification by us.
Your returns are due on the date set by the Internal Revenue Service for your return type, and while it is possible to apply for an automatic extension, generally the full amount of your tax liability must be paid by the due date, to avoid interest and/or penalties. In order to ensure the completion of your tax returns by the due date, we will require receipt of all of your information no later than three (3) weeks prior to the specified date.
Due Dates are as follows:
elect not to make estimated payments
- March 1, 2021
- March 15, 2021
Individual and Gift Tax returns
- April 15, 2021
- April 15, 2021
- May 15, 2021