Engagement Letter for Individuals

Technical topics regarding tax preparation.
#1
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I’m interested to hear what others are using for engagement letters with individual tax clients. The AICPA template letter, while I’m sure is great and comprehensive, is extremely long. I’m fine using the long letter with my more complicated clients who, inherently, involve more risk. However, I feel it is just to long, burdensome, and confusing for most of my low to mid complexity individual returns. I’m thinking of using a one or two page unilateral engagement letter (that only I sign) that will go out with the organizer and be delivered with the final tax return. Is anybody else doing this? Thoughts?
 

#2
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North Carolina
I would not use an engagement letter that only I sign. The engagement letter signed by the client indicates an agreement between you and the client. If client does not sign it, there is no agreement.
 

#3
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California
Agree with Seaside CPA
 

#4
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NC
Some practitioners believe no engagement letter is better than an abbreviated version that does not cover everything. Thoughts?
 

#5
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Gray, TN
I use the stock Eng Ltr provided by Drake.
 

#6
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I pull the AICPA templates and create my own templates based on them. (Looking forward to making new templates once they've been updated for the 2019 filing season :( )

Never had a complaint about the length of them. They usually end up being 8-10 pages long for a compliance engagement, which includes my letterhead, closing paragraph, signature, and closing logos.

Haven't had a complaint yet about length, burden, or confusing language. I tend to leave out any of the "optional" paragraphs, which I highlight yellow in my version of the template so I can evaluate on a case-by-case basis, if I have reasonable knowledge they're inapplicable to the particular client.

In a nutshell I'm less concerned with length and more concerned with protecting myself as far as engagement letters are concerned.

All my clients are reasonable and know they can ask me questions if something needs clarification.

The real fun in late December / early January will be figuring out the route I'm going to go with organizers...not that it will matter much.
 

#7
Bob A  
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I'd be interested to hear from someone who actually had to use their Engagement Letter, and how did it go? Did it work?
 

#8
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Northern MI and Coastal SC
I use engagement letters provided by my E&O (CNA). They provide optional language, and I have added additional language beyond their templates. Yeah, they're 8-10 pages but I do not care--it is my butt on the line. Also, I am pretty positive not a single client has even read the engagement letters they are signing, or care about the length. The only person that has ever complained about the length was my former partner (friggin' nightmare, complained about EVERYTHING).

I've attended the CNA seminars on risk mitigation and the number one thing stressed is obtaining engagement letters. I do not recall the statistics they threw out, but it was a high success rate in defending position when engagement letters existed. I do them with almost all engagements, unless there just really is not any risk involved.
 


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