Minor Children & Engagement Letters

A shower thought...

All of the dependent returns that my practice handles are adult children who have reached the age of majority. They're usually attending college. I have these clients sign an engagement letter, and it usually contains a paragraph that authorizes me to discuss the return with the parent(s).

At prior firms, I was exposed to tax returns of minor children, who usually had a filing obligation due to investment income. Sometimes a high school kid that worked a W-2 and had income tax withheld.

I'm obviously not an attorney, but I think I read somewhere, at some point, that contracts are not binding on minors. Something about capacity and such and such.

For these clients, does one have the parent(s) sign the engagement letter for the minor child's engagement? Such as "John & Jane Smith, parent (or guardian) of Jimmy Smith"?

I only have engagement letters with clients that are of legal age. My engagement letter does have one sentence that tax returns of minor children will be the responsibility of the parents, such as kiddie tax etc. because often times people don't disclose that their kids have serious investment income.

I make parents sign, too, if they are not 18. I am hardly concerned about having to defend myself against a minor, though, with only W2 wages or SS death benefits. They're filing to get back withholding, most of the time, not because they actually have to file.

I always have the parent sign.

In the case of a minor, rather than an engagement letter, I have them sigh my "client service agreement ", which is very similar, when they sign their 8879. It says "by authorizing the tax preparer to file the return on my behalf, I also agree to the following..."

I also am not too worried about these returns in the way of liability.

Also, as discussed in other threads, an engagement letter helps with informal CS disputes, but when it comes down to getting sued, it may not mean very much. There are multitudes of preparers who do not use engagement letters or service agreements.