Free 2018 Engagement letters Sample

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#1
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I need an new engagement letter and found that you can download free engagement letters for 2018-2019 tax season from Camico.

http://cpa.camico.com/2018-tax-resources-web-122018/

P.S. I am not paid by Camico or any one.
 

#2
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Who is your E&O through? They may offer engagement letters for a variety of subjects. I know AON does and they are what I use, with some modifications.
 

#3
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The AICPA also offers free engagement letter templates if you are a member of their tax section.
 

#4
dsocpa  
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Just wondering if everyone uses engagement letters. I recently had lunch with a collegaue who said she does not use engagement letters and never has. Every year she puts down on her E&O app that she doesn’t use engagement letters and they never say anything about it. I personally use engagement letters and have had only one “potential” client balk at signing. When I told him I needed to get paperwork signed he asked me to mail his documents back to him. I did so immediately. I do not want a client that won’t sign.
 

#5
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Absolutely.

If a prospect or client balks at signing an engagement letter and refuses then we don't have an engagement and I can not move forward.
 

#6
makbo  
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dsocpa wrote: I recently had lunch with a collegaue who said she does not use engagement letters and never has. Every year she puts down on her E&O app that she doesn’t use engagement letters and they never say anything about it.

My E&O insurance application (from a major insurer) does not ask any such question, I wonder why hers does.

The shop that works on my automobile repairs makes me sign an agreement before they start work, stating what is to be done, the initial cost, how additional work will be handled for approval, guarantees, etc. If it's a good idea for auto repair, it's a good idea for tax prep.
 

#7
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I added them to my practice after buying out my partner. We had ONE client balk. He sent this email with such wonderful language as “hey friend” what’s this letter say “good buddy” I just want to know before I sign, “your brother in Christ.”

I said nothing has really changed, this just makes our insurance carrier happy (gets us a discount). Basically if we mess up we’ll make it right. But it says you’ll do your best to get us everything and look over the return. If you fail to provide us something then we aren’t responsible for penalties or interest.

“What? You crooks. I would never sign this if you aren’t going to warranty your work. It’s your job to make sure I gave you everything.”

“Yes we’ll do our best to make sure we have everything, but I’m not going to cover a penalty if you fail to tell me you had a new investment account, got paid for something in cash and keep it secret, etc.”

“What am I paying you for? I just can’t sign this if you can’t stand behind your work”

“I’m sorry for the misunderstanding. It seems we both need to move a new direction.”

Some clients just can’t be helped.
 

#8
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Some clients do not understand the scope of a compliance engagement and want you to be their administrative assist throughout the year as well.

Nor do they seem to understand they are one of many clients. It's not like you're Tom Hagen in The Godfather with a one client practice and complete time and energy to devote to that one client...
 

#9
Frankly  
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dsocpa wrote: I do not want a client that won’t sign.
Likewise, some clients don't want to work with a professional that gets all "legal" with them at the outset. It sets the wrong tone for the relationship.
 

#10
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Frankly wrote:Likewise, some clients don't want to work with a professional that gets all "legal" with them at the outset.


That's their prerogative. It's my prerogative to refuse service to someone who gets their feathers ruffled over an engagement letter and becomes a pain in my backside before we even have an engagement.

Frankly wrote:It sets the wrong tone for the relationship.


I tend to think it sets exactly the right tone. This is a business relationship and I'm being engaged for a service that has a beginning and an end. That needs to be understood from the beginning.

As makbo pointed out, if you take your car into a garage for a repair, you're going to read some legalese and sign off. If you have a $250 dishwasher delivered form Home Depot to your house, you will have to do the same. A legitimate business is going to have some paperwork when a contract is entered into that specifies cost, scope of work, and the terms of the engagement.
 

#11
Frankly  
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ManVsTax wrote:I tend to think it sets exactly the right tone. This is a business relationship and I'm being engaged for a service that has a beginning and an end. That needs to be understood from the beginning.
The objective is for both parties to have an understanding of what each party will contribute to the engagement. For me, I handle that with a conversation at the table. Sometime I might give a handout that recaps our agreement.

I see no point at all in getting a signed paper. It is the forcing of a client to sign a paper that sets the wrong tone. It's like preparing for battle, preparing for a lawsuit, preparing evidence to win a court case. Court cases are for clients or pros that failed to communicate.
 

#12
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The beauty of America is that we have relative freedom in the way we choose to run our businesses vs the guy down the street.

Engagement letters help me sleep at night. They're there for my protection and also the client's protection. They mitigate misunderstandings. As I'm sure you're aware, some clients remember things differently than they were actually told. The engagement letter can rein these clients in. It has many purposes.

I don't feel like I'm preparing for battle, but can understand how it may seem that way. Either way: "If you want peace, prepare for war."

Best of luck to you.
 

#13
dsocpa  
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There was a time when someone's word or handshake would suffice. But not now. I'm in business to make money. This is how I pay the mortgage and send my kids to college. I'm not about to jeopardize that for fear a signature on an engagement letter would offend or give the appearance I am unprofessional, or set a formal tone to the relationship. Quite the opposite, I believe as other's have stated, formalizing the arrangement establishes a level of professionalism in the way one conducts business. My clients expect professional work from me and I expect to be treated as a professional.
 

#14
makbo  
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It probably has a lot to do with the community in which you practice. Sure, if you are in a small town or rural area where "everyone knows your name", maybe a handshake will suffice. But if you are in a zip code where the number of lawyers is equal or greater than the number of tax practitioners, heed this wise lyrical advice:

"Don't let the handshake and the smile fool ya
Take my advice, I'm only tryin' to school ya
Smiling faces, smiling faces, sometimes
They don't tell the truth"
 

#15
Frankly  
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It doesn't really matter much if a client doesn't remember to what we agreed. I remember. I do his tax return. I don't do his bookkeeping, nor file his 1099s, nor pay his tax, etc. etc. He gets a professionally prepared product. He pays a reasonable fee. A signature, nor lack thereof on a paper changes nothing, which is why I don't demand it.
 

#16
jon  
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The engagement letters used to be a difficult to get back. It is now easy, we do not electronically file anything if we have not received all correspondence back and signed. It has been 20 years of bliss since then.
 

#17
Doug M  
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AICPA Value Plan (one of the biggest E&O carriers for smaller firms) offers no discount for using Engagement Letters. And there is a reason for it.
 

#18
dsocpa  
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That's interesting. AICPA tells us to use engagement letters every chance they get no matter what type of service we provide. My E&O carrier doesn't ask if I use them either. Not sure if they assume I am or not. In any event it makes no difference I will continue to use engagement letters.
 

#19
Taxaway  
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I think it risky not to use an engagement letter, and to assume all your clients will even remember or honor a verbal agreement. Or call it mutual understanding. Even if 99% will, what about that 1%? We're talking about issues that could arise maybe a year after tax prep occurs.

Aside from the requirement to provide your privacy policy in writing (as I recall that from somewhere), it lays out a professional expectation from and to both parties. One example I have, and the reason is IF it ever occurred, is I am not responsible for P&I if it results from a bank problem with a client's direct debit and not because of an input error. Will any of my current clients try to blame me? Highly doubtful. Will any FUTURE client blame me if it ever happened? How do I know...but I don't have to guess, everyone signs the engagement.
 

#20
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I agree that engagement letters are good idea, but it is just another document to prepare and logistics of getting it signed. Which is why we usually don't require it for tax returns. If we did, I guess we would sent them out in January, giving our tax clients plenty of time to think it over and fire us.

Getting them fro attest engagements was not a problem because all we had to say was that are required. The are not required for tax work.

Having said that, for very large returns are ANY form 706 Estate Tax return we get them.
 

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