Dear Client:

We look forward to providing you with tax return preparation services this year! The purpose of this letter and attached “Additional Engagement Terms” is to specify the terms of our engagement and clarify the nature and extent of the services we will provide. This way, you know what to expect from us, and we can endeavor to delight you with high-quality, seamless services.

We strive to make our tax return process as straightforward and convenient as possible for you. Our goal is to minimize any hassle on your end while also making things as efficient as possible on our end. This allows us to deliver your returns expediently, while also bringing to bear a high level of technical expertise and personal service. It also helps us keep our costs down for all clients.

What Services Are Covered under This Engagement?

Preparation of U.S. Federal and State Returns

With this letter, you are engaging us to prepare your 2023 U.S. and state individual income tax returns. We will do so with the information you furnish to us in the process described below. If you have taxable income or loss in a state or locality other than your resident state, we will generally prepare your nonresident state or locality returns, as well, unless you indicate in advance that you prefer we not prepare these nonresident filings.

Preparation of Foreign Bank Account Reports (FBARs)

If based on the information you have provided to us, we believe that you have a requirement to file FinCEN Form 114 (otherwise known as a Foreign Bank Account Report or “FBAR”), the preparation of your 2023 FBAR(s) will be covered under this engagement. If you prefer that we not prepare your FBAR(s), you may opt out by checking the appropriate box in your annual tax questionnaire or notifying us in writing.

Preparation of Certain Dependent Tax Returns

In some cases, a dependent or minor child under your care and supervision may be required to file a U.S. income tax return, state income tax return, and/or International Informational Report (e.g., FinCEN Form 114 (FBAR)). Generally, if you request that we prepare such forms on your dependent’s behalf, we will consider that service to be covered under the current engagement as a “dependent tax filing,” and we will bill the preparation to you based on our most recent tax preparation fee schedule. However, in some circumstances, we may require that the preparation be handled under a separate engagement, with an additional Engagement Letter to be completed by you, the parent or guardian. In that case, we will notify you of the requirement for a separate engagement.

Preparation of Forms 3520 and 3520-A (Foreign Gifts, Foreign Inheritance, Certain Foreign Trusts & Foreign Pensions)

If based on the information you have provided to us, we believe that you have a requirement to file Form 3520 and/or Form 3520-A, the preparation of those forms will be covered under this engagement. We will prepare those forms in conjunction with your individual tax returns, under the same terms.

What Is the Scope of This Engagement?

This engagement is limited to the professional services outlined above. We will not prepare any tax returns other than those identified above, without your written request, and our written consent to do so. We will prepare the above-referenced tax returns solely to assist you with your tax filing obligations with the IRS and applicable state and local tax authorities. Our work is not intended to benefit or influence any third party, including any entity or investment which may seek to evaluate your creditworthiness or financial strength.

What Services Are Not Covered under This Engagement? (Most Are Offered as a Separate Engagement.)

The following services are examples of services that are outside the scope of this engagement. However, we regularly assist clients with many of these matters. Should you request these additional services, and we agree to provide them, we will send you a separate engagement letter for those services.

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 for 2023, is $17,000 per taxpayer. You are responsible for informing us if you have made any transfer of value for which you did not receive full consideration, such as, but not limited to, those made in trust, forgiveness of debt, or the use of property for which no or below-market rent was charged, as these may affect both income tax and gift tax returns.

Tax Planning

During the course of preparing the tax returns identified above, we may bring to your attention potential tax savings strategies for you to consider as a possible means of reducing your taxes in subsequent tax years. However, we have no responsibility to do so, and will take no action with respect to such recommendations, as the responsibility for implementation remains with you, the taxpayer. If you ask us to provide tax planning services, and we agree to provide them to you, we will confirm this engagement in a separate agreement.

Corporate Transparency Act Beneficial Ownership Information Disclosures

You may have a requirement to file beneficial ownership information (BOI) reports to comply with the Corporate Transparency Act (CTA). You have sole responsibility for your compliance with the CTA, including its BOI reporting requirements and the collection of relevant ownership information. We shall have no liability resulting from your failure to comply with CTA. Information regarding the BOI reporting requirements can be found at Consider consulting with legal counsel if you have questions regarding the applicability of the CTA’s reporting requirements and issues surrounding the collection of relevant ownership information. If you ask us to provide BOI services, and we agree to provide them to you, we will confirm this engagement in a separate agreement.

Prior-Year Returns

If for the preparation of your current-year returns, you provide us with a copy of your prior-year returns, our review of the prior year’s tax return will necessarily be limited and may not find all errors. If you become aware of any information impacting prior year tax returns, please contact us. If you ask us to prepare amended tax returns, and we agree, we will confirm this engagement in a separate written agreement.

Returns for a Spouse Filing Separately

In some cases, it may be determined that individuals who have filed or can file “married filing jointly” should in fact file “married filing separately.” If this is the case, then our firm would require both spouses to have separate paid engagements. Our full fee schedule would apply to both tax returns. Lastly, should the spouses want to discuss their respective tax returns with our firm, then we may require signed consent forms or signed conflict of interest waivers.

Foreign Tax Returns

You may have a filing requirement or tax liability in a foreign country. Generally, you are responsible for determining whether you must file and pay taxes in a foreign country and to comply with any requirements. In some cases, upon request, we may agree to assist in making these determinations. Should we agree, this would be covered under a separate engagement. We do not prepare foreign tax returns. Should you need assistance with your foreign tax filings, or with confirming filing requirements, we would be happy to refer you to a provider in that country. See information below on referrals.

Bookkeeping Assistance

We may determine that in order for us to prepare your tax returns, you first need accounting and bookkeeping assistance for your business activities, to make sure your financial data are in good order before we convert the financial data to their tax equivalents. In those cases, we will provide you with referrals to bookkeepers.

What Are Your Responsibilities during the Tax Preparation Process?

Timely Information and Clarifications

You must provide all the information required for the preparation of complete and accurate returns. Our team is committed to getting your return done as efficiently as possible, but to do so, we need you to deliver all records and information we request in a timely manner. You are responsible for fully and accurately disclosing to us all relevant facts affecting your returns.

To help you assemble the information needed for your returns, we will provide you with a questionnaire, organizer, and/or other document requesting specific information. Our questionnaires include deadlines for sending us your information, based on the type of return(s) you file and whether you hope to file by the original deadline, by the extended deadline, or after the deadlines.

Once your information is assembled and organizers and questionnaires are complete, you will submit your complete information to us. Please know that failure to provide information via completed questionnaires and organizers may require an extraordinary effort on our part, which may be reflected in our fee for service.

If, during the course of your tax return preparation, we determine that additional information or clarifications are needed in order to complete your returns, we will let you know. You are responsible for providing such additional information in a timely manner so that we can prepare your returns efficiently and timely. Please know that lack of responses on your part may result in extraordinary follow-ups and efforts on our part, which may be reflected in our fee for service.

We will provide you with guidance on the timeline for submitting your tax information to us. It is your responsibility to provide your complete tax information to us in a timely manner so that we can prepare your tax returns in time for you to file them by the due dates. You also have the final responsibility for the tax returns, and therefore, once you receive them, you should carefully review the returns (to determine that there are no omissions or misstatements) before signing them and submitting them to the tax authorities, or authorizing e-filing of the returns.

Please know that a fundamental term of this agreement is that you will provide us with all information relevant to the services to be performed and to provide us with any reasonable assistance as may be required to properly perform the engagement. You agree to bring to our attention any matters that may reasonably be expected to require further consideration to determine the proper treatment of any relevant item. You also agree to bring to our attention any changes in the information as originally presented as soon as such information becomes available. Unless otherwise indicated, any deliverables are solely for your internal use and benefit.

Personal Expenses

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

What Are Your Responsibilities Related to Foreign Assets, Foreign Ownership & Digital Assets?

Both U.S. tax residents and non-residents may be required to disclose ownership of, or transactions in, digital assets (such as Bitcoin, other cryptocurrency, NTFs, etc.), as well as certain foreign assets, transactions, or ownership.

We will send you an annual tax questionnaire, to identify the information, forms, and schedules that must be included in your U.S. tax return for the year. Please be aware that if we determine that you need to file certain forms, we may request further information needed to prepare the forms, including completion of specialized supplemental questionnaires specific to your forms. You are responsible for completing each questionnaire, in addition to any supplemental questionnaires we send you.

FinCEN Form 114 (FBAR)

Based on the information you provide, you may be required to file FinCEN Form 114, also known as the Foreign Bank Account Report or FBAR.

You are responsible for informing us of all foreign financial assets and interests, including any financial interest in, or signature authority over assets, or financial accounts located in a foreign country. This information includes but is not limited to savings accounts, checking accounts, current accounts, securities accounts, custodial accounts, certificates of deposit, time deposits, mutual funds, annuities, insurance policies with cash surrender values, retirement accounts, and pension accounts. In addition, any ownership interests you directly or indirectly hold in an entity or company located in a foreign country such as a corporation, partnership or trust must be reported. Please disclose all items that may possibly fall within this broad definition. You are responsible for asking us if you have any questions about what is required to be reported.

You are responsible for maintaining adequate documentation to substantiate the accuracy and completeness of your FBAR. Our records are not a substitute for yours. You should retain all documents that provide evidence and support for reported balances on your FBAR, as required under applicable laws and regulations. You represent that you have such documentation and can produce it, if necessary, to respond to any audit or inquiry by FinCEN, or other tax authorities. You will be responsible for any liability, including but not limited to, civil or criminal penalties, interest and related professional fees, due to inadequate documentation.

Failure to file an FBAR when required, or to fully and accurately disclose all information requested in the report, may result in the imposition of civil or criminal penalties, and interest charges on unpaid penalties. If you have income earned on your accounts outside of the United States, additional penalty and interest charges can be assessed by the IRS and other tax authorities on such income if it is not reported on your income tax returns. These penalties and related interest charges may be significant. You will be responsible for the payment of any additional tax, penalties, and interest charges imposed by tax authorities.

U.S. Filing Obligations Related to Foreign Financial Interests

Based on the information you provide, you may be required to file Foreign Informational Reports, either within your individual tax returns or separately. Examples include, but are not limited to, International Information Reports:

  • 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);
  • U.S. shareholders of controlled foreign corporations (Form 8992);
  • A U.S. person who owns stock (or holds an option to purchase stock) of a foreign corporation and elects to treat such stock as the stock of a qualifying electing fund (Form 8621);
  • Forms 1065, 1120-S, and 8865 Schedules K-2 and K-3; and
  • Ownership of specified foreign financial 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, so that we may accurately reflect them in the preparation of your tax returns. Once we identify a potential filing requirement, we may send you a follow-up questionnaire specific to that requirement. If we send you a follow-up questionnaire, you are responsible for completing it and returning it to us in a timely manner.

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.

Please note that these forms may be required to be included as part of your individual tax returns. If they are required and you decline to provide the necessary information or you prefer not to file the forms, we may no longer be able to proceed with the engagement.

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 penalty and interest charges associated with the failure to file or untimely filing of any of these forms.

Gifts or Inheritance from Foreign Persons

If you received a gift or bequest from a foreign person or trust (or may be entitled to receive one from a recently deceased individual), you may be required to file an IRS Form 3520, Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts. You are required to inform us of any such transactions with foreign persons or entities. We will then prepare the Form 3520 as part of the current engagement.

Schedules K-3

If you are a partner or shareholder in certain pass-through entities, you may be required to obtain Schedules K-3, “Parter/Shareholder’s Share of Income, Deductions, Credits, etc. – International,” in addition to Schedules K-1. It is your responsibility to make sure that your pass-through entities are aware of your correct status (as a foreign or domestic partner/shareholder). It is also your responsibility to notify your pass-through entity timely (generally more than 30 days before the due date for the pass-through tax return) of your requirement to receive a Schedule K-3, if you are a foreign partner/shareholder or if you are a domestic partner/shareholder with foreign reporting requirements on your tax returns.

Digital Assets

There are specific tax implications of investing in digital assets (e.g., virtual currencies such as Bitcoin, non-fungible tokens, virtual real estate and similar assets). The IRS considers these to be property for U.S. federal income tax purposes. As such, any transactions in, or transactions that use, digital assets are subject to the same general tax principles that apply to other property transactions.

If you transacted in digital assets during the tax year, you may have tax consequences and/or additional reporting obligations associated with such transactions. You agree to provide us with complete and accurate information regarding any transactions in, or transactions that have used, digital assets during the applicable tax year. If you have any questions regarding your digital assets and/or transactions, please ask us, and we will respond in writing.

Our firm reserves the right to use our internal company policies and procedures to report income, expenses, credits, deductions, and foreign financial asset declarations should there not be an expressly stated method in the Internal Revenue Code, Regulations, or IRS Frequently Asked Questions (FAQs).

How Long Should You Keep Your Records?

You should retain all documents, canceled checks, and other data that are used when preparing your tax return. These may be necessary to prove the accuracy and completeness of the returns to a taxing authority. It is your responsibility to keep your tax records for 7 years in the event of an audit. Additionally, any records related to the purchase or sale of real property should be kept permanently.

What Are Our Responsibilities under This Engagement?

As a CPA firm, our work is held to high standards. We will prepare your returns in accordance with leading industry standards from the Statements on Standards for Tax Services (SSTSs), issued by the American Institute of Certified Public Accountants (AICPA), and the U.S. Treasury Circular 230.

We will perform our services based on the information you have provided, taking into account applicable federal, state or local laws, regulations, and associated interpretations relative to the appropriate jurisdiction as of the date the services are provided.

We will not audit or otherwise verify the information you provide us; however, we may ask for additional clarification of some information. You should maintain the documentation necessary to support the data used in the preparation of your tax returns should you be required to produce them upon examination by the taxing authorities.

Pursuant to the standards prescribed in Circular 230 and IRC §6694, we, as tax return preparers, are prohibited from signing a tax return unless we have a reasonable belief that there is substantial authority for a tax position taken on the tax return or we have a reasonable basis for the tax return position taken in the return.

What Positions Do We Take When Tax Law Is Not Clear?

We will use our judgment to resolve questions in your favor where a tax law is unclear, provided that we have a reasonable belief that there is substantial authority for doing so.

If there are conflicting interpretations of the law, we will explain the possible positions that may be taken on your return. We will follow the position you request, provided it is consistent with our understanding of tax reference materials. Tax reference materials include but are not limited to, the Internal Revenue Code (IRC), tax regulations, Revenue Rulings, Revenue Procedures, Private Letter Rulings, court cases, and similar state and local guidance. If the IRS, state or local tax authorities later contest the position you select, additional tax, penalties, and interest may be assessed. We assume no liability, and you hereby release us from any liability, including but not limited to, additional tax, penalties, interest, and related professional fees.

Reliance on Others

There may be times when another tax advisor is engaged to assist us in providing services. If you wish to take a tax position based upon the advice of another tax advisor, we must comply with Circular 230, §10.37(b) and AICPA SSTS No. 1 and related Interpretations 1-1 and 1-2, which require the position to meet the “realistic possibility,” “substantial authority,” or “more likely than not” standard, as applicable. You agree to obtain a written statement from the advisor confirming the standard that should apply so the position may be properly disclosed. If additional research or disclosure is required, you agree to pay for the additional charges necessary to complete the disclosure or research. Moreover, you understand that the IRS, state, or local tax authority could disagree with the position taken on the return. If this occurs, you will be responsible for any additional tax, penalties and interest, as well as any related professional fees, you may incur.

IRS Disclosure Statements, Form 8275 and 8275-R

The IRS and many states impose penalties for substantial understatement of tax. To avoid the substantial understatement penalty, you must have substantial authority to support the tax treatment of the item challenged by the IRS or have an adequate disclosure of the item. To fulfill the adequate disclosure requirement, you may be required to attach to your tax return a completed Form 8275, Disclosure Statement, or Form 8275-R, Regulation Disclosure Statement, which discloses all relevant facts.

You agree to advise us if you wish to disclose a tax treatment on your return. If you request our assistance in identifying or performing further research to ascertain if there is substantial authority for the proposed position to be taken on the tax item(s) in your returns, and we agree to perform the research, we will confirm this engagement in a separate agreement. It is your responsibility to contact us if additional assistance is required.

If we conclude as a result of our research that you are required to disclose a transaction on your tax return, you consent to attach Form 8275 or Form 8275-R to your tax return for filing after we discuss the matter with you. If the IRS, state or local tax authorities later contest the position taken, additional tax, penalties, and interest may be assessed. We assume no liability, and you hereby release us from any liability arising from such contest, including but not limited to, additional tax, penalties, interest, and related professional fees for the position taken.

Aggressive Tax Strategies

Certain tax positions or strategies, while not currently identified as a reportable transaction by the IRS, may ultimately be determined to be so in the future. Consequently, you agree to advise us of any transaction you enter into that entitles you to disproportionate tax benefits (deductions, credits, or refunds), that generates significant income deferral or non-recognition, or that generates significant tax losses without corresponding cash impacts (“aggressive tax strategy”). If you fail to timely notify us, in writing, of any aggressive tax strategy you have entered into, you will be responsible for any liability, including but not limited to, additional tax, penalties, interest and related professional fees.

Reportable Transactions

The law imposes substantial penalties on taxpayers and tax advisors for failure to disclose listed and other reportable transactions on Form 8886, Reportable Transaction Disclosure Statement and, in some cases, extends the statute of limitations tax authorities have to contest any tax return claiming those tax positions. In general, reportable transactions are potentially abusive transactions identified by the IRS that have a primary purpose of tax avoidance, including but not limited to listed transactions, confidential transactions, transactions with contractual protection, loss transactions, and transactions of interest (a definition of “reportable transactions” is located at and includes a link to a summary of listed transactions).

If you do not consent to a required disclosure, we may be unable to proceed.

What Do We Do with Your Information? What Don’t We Do?

We take care to safeguard your information. In addition, we are prohibited by law and by professional standards from sharing your information (subject to certain limitations, described below) and from using it for unauthorized purposes.

In some cases, you may wish to grant us a specific legal authorization that enables us to share your tax information with a family member, investment advisor, or other party, for a specific purpose. If we agree, we will send you the requisite form to sign. (There is a separate fee for this service.)

Federally Authorized Practitioner – Client Privilege

IRC§7525, Confidentiality Privileges Related to Taxpayer Communication, provides a limited confidentiality privilege applying to tax advice embodied in taxpayer communications with federally authorized tax practitioners in certain limited situations. This privilege is limited in several important respects. For example, the privilege may not apply to your records, state tax issues, state tax proceedings, private civil litigation proceedings, or criminal proceedings.

While we will cooperate with you with respect to the privilege, asserting the privilege is your responsibility. Inadvertent disclosure of otherwise privileged information may result in a waiver of the privilege. Please contact us immediately if you have any questions or need further information about this federally authorized practitioner-client privilege.

Financial Comfort Letters

We will not respond to any request from banks, mortgage brokers, or others for verification of any information reported on these tax returns. We do not communicate with such third parties or provide them with copies of tax returns.

Sharing of Information with Spouse on Joint Tax Returns

If the tax returns prepared in connection with this engagement are filed using the married filing jointly filing status, both spouses are deemed to be clients of the firm under the terms of this agreement. Both spouses acknowledge that there is no expectation of privacy from the other concerning our services in connection with this agreement. We are at liberty to share with either of you, without prior consent of the other, documents and other information concerning the preparation of your tax returns.

Method of Communication

Our firm may utilize electronic communications (e.g., fax and e-mail) during this engagement. You consent to our firm’s use of electronic communications and recognize and accept the inherent risks related to these forms of communication (including the security risks of interception of or unauthorized access to such communications, the risks of corruption of such communications, and the risks of viruses or other harmful intrusions).

Electronic Data Communication and Storage

In the interest of facilitating our services to you, we may send data over the Internet, temporarily store electronic data via computer software applications hosted remotely on the Internet, or utilize cloud-based storage. Your confidential electronic data may be transmitted or stored using these methods. In using these data communication and storage methods, our firm employs measures designed to maintain data security. We use reasonable efforts to keep such communications and electronic data secure in accordance with our obligations under applicable laws, regulations, and professional standards.

You recognize and accept that we have no control over the unauthorized interception or breach of any communications or electronic data once it has been transmitted or if it has been subject to unauthorized access while stored, notwithstanding all reasonable security measures employed by us. You consent to our use of these electronic devices and applications during this engagement.

Newsletters and Similar Communications

We may send newsletters, emails, explanations of technical developments or similar communications to you. These communications are of a general nature and should not be construed as professional advice. We may not send all such communications to you. These communications do not constitute a client relationship with you, nor do they constitute advice or an undertaking on our part to monitor issues for you.

Brokerage, Investment Advisory or Digital Asset Statements

If you provide our firm with copies of brokerage, investment advisor, or digital asset statements Form 1099-DA, we will use the information solely for the purpose described in the scope section of this agreement. We will rely on the accuracy of the information provided in the statements and will not undertake any action to verify this information. We will not monitor transactions, investment activity, provide investment advice, or supervise the actions of the entity or individuals entering into transactions or investment activities on your behalf. We recommend that you receive and carefully review all statements upon receipt, and direct any questions regarding account activity to your banker, broker or investment advisor.

How Do We Handle Extensions of Time to File Tax Returns?

Extensions of Time to File Tax Returns

Each year, the tax package we send you includes the original filing deadline for your tax return(s), the extended due date, and other important dates. We also include the dates by which we need to receive your complete information, in order to complete your returns by the deadlines.

If you would like us to file an extension on your behalf, or if you need more time to gather your information and thus require an extension, just let us know. If you have not yet sent your tax information, then we require that you at least send us an executed version of this agreement, as well as your express written authorization to file an extension, before we can file one on your behalf. 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.

If you submit your information to us after the information submittal cut-off date indicated in your tax questionnaire but before the original deadline, we will automatically file an extension on your behalf. If you prefer to file your own extension, then be sure to let us know at the time you submit your information. In some years, we can begin (and sometimes complete) returns that come in after the cut-off date, by the original filing deadline. However, we make no guarantees, and we often file protective extensions for these returns as a matter of course, typically soon after we receive your tax information.

If you prefer to file by the original due date of your returns (without an extension), then be sure to send your information early, and no later than the information submittal cut-off date indicated in your tax questionnaire. Our firm works on a first-in, first-out basis. The cut-off dates each year are set based on historical volumes. If you send your complete information by that date, then we typically finalize your returns in time to file by the original deadline. However, your submittal by the cut-off date is not a guarantee that we will complete your returns by the original due date.

In some cases, you or we may determine that additional time is needed to file your returns. For example, your return may include complexities that require further analysis or clarifications; you may be waiting on missing forms or other information after the cut-off; we may discover close to the deadline that additional information is needed; we may experience unprecedented high volumes; or you may want to take additional time to answer questions, review your returns, or send your e-file authorizations back to us.

We reserve the right to unilaterally file and place any client on extension if we determine that our firm will be unable to complete a true, accurate, and complete tax return by the filing deadline.

We also may file “protective” extensions at our discretion, during the last week of the filing deadline, to allow our clients more time to review their returns, ask questions, and submit their e-file forms, and to allow our team the necessary time to make any updates, complete reviews, and e-file.

Please note that a tax return extension typically will not bring you higher on the IRS’s radar. In fact, the majority of returns historically selected for audit come from those filed by the original deadline, and many CPAs extend their returns as a matter of course. Applying for an extension of time to file may, however, 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. Additionally, extensions may affect your liability for penalties and interest or compliance with governmental or other deadlines. See below.

Extension Payments

Even if your tax return filing deadline is extended, all taxes owed must still be paid by the original filing due date. Otherwise, the tax authorities will charge penalties based on the amount owed and the date you ultimately pay it.

It is often difficult to know how much to pay, as your tax return has not been completed yet, and U.S. tax returns have many factors that increase or decrease the final tax liability.

You have several options for estimating and making extension payments:

  1. Make a rough, conservative (high) estimate, pay it by the original filing deadline, and expect a refund when the return is filed. This approach is common among our clients. It allows clients to avoid interest and penalties, while also knowing that if they have paid too much, the rest will be refunded when they file their returns (or can be applied to next year’s taxes, if they prefer). To calculate their estimated payment, clients consider their historical trends and changes from the prior year, and make a rough estimate. States typically apply higher interest rates than the IRS, so we advise being especially conservative (high) when making state payments.
  2. Skip the extension payment and just pay any tax due, with interest and penalties, when the return is filed. Some clients prefer this approach for its simplicity. It generally makes sense when they do not anticipate large balances due, and their situation is similar year-to-year.
  3. Engage us to calculate your estimated balances due (an additional fee applies). If you would like us to calculate the estimated amount you should pay by the original due date of your return, then you can let us know. We charge an additional fee for this service, as it often involves preparing a draft tax calculation based on draft tax numbers. Typically, extension calculations make sense for first-time filers, first-time residents, clients whose tax situations have changed substantially from the prior year, and clients who have high levels of income that fluctuate significantly year-to-year. Otherwise, our fee may exceed any penalties and interest you would likely incur.

To request that we prepare an extension payment calculation for you, simply check the box in your tax questionnaire to request an extension payment calculation, and be sure to submit your tax information by the Extension Calculation Deadline in your tax questionnaire. If you submit your information (or request a calculation) after the Extension Calculation Deadline, then we may not see your request in time or have the capacity to prepare a calculation. In these cases, we assume no responsibility for assisting with extension estimates.

Penalties and Interest Charges

Federal, state, and local tax authorities impose various penalties and interest charges for non-compliance with tax laws and regulations, including failure to file extensions or returns, late filing of returns, and underpayment or late payment of taxes. You will be responsible for the payment of any additional tax, penalties, and interest charges imposed by tax authorities.

How Do We Handle Calculation of Estimated Tax Payments?

Estimated Tax Payments

You may be required to make quarterly estimated tax payments in various tax jurisdictions. Our organizer/questionnaire allows you to indicate whether you would like us to prepare these estimates and on what basis (“safe harbor” or tailored). We will calculate these payments for the 2024 tax year based upon the information you provide to prepare your 2023 tax returns. Updating recommended quarterly estimated tax payments to more closely reflect your actual current year’s income is not within the scope of this engagement, unless requested by you, and agreed to by us, in writing. These services will be billed at our standard hourly rates and will be subject to the terms of this agreement.

What Happens Once We Deliver Your Returns to You?

Ultimately, you have the final responsibility for your income tax return. Once we send it to you, you should review your return carefully before signing it. If you have questions, you should reach out to your preparer timely, and we would be happy to assist.

When we deliver your returns to you, we will send you filing instructions. If your returns qualify for e-filing, you are responsible for timely signing the e-file authorization forms and returning them to us by the cut-off times specified in our communications. You are also responsible for making any tax payments directly to the tax authorities. If we receive your signed e-file authorization forms, we will send you confirmation of e-file acceptance. You are responsible for maintaining proof of timely filing.

If part or all of your forms or return(s) must be paper filed, you are responsible for timely signing those forms/returns and mailing the returns by the deadlines. You are also responsible for maintaining proof of timely filing. To be timely filed, any mailed returns must be U.S. postmarked by the deadline (or clear U.S. customs by the deadline). In some cases, the IRS disregards the postmarked date and will issue late-filing penalties if they do not receive your returns by the deadline. Although you can fight these penalties by showing proof of timely mailing, we recommend sending your returns as early as possible to avoid any uncertainty. In addition, we recommend that you make copies of any final signed returns and mail your returns certified mail with return receipt (or your country’s equivalent), so that you have proof for your records. We are unable to mail your returns or send payments to the tax authorities on your behalf.

Additional Information Provided after the Fact

In reviewing their returns, some clients discover that they forgot to send us certain forms or information or inadvertently sent us incorrect information. We highly encourage you to be thorough in the original data you provide to us. If you provide us additional information after we send you your returns, we must re-do already completed work. Given our heavy workload, we understandably do not want to re-do work that we have already completed.

If you provide additional information after we have delivered your return, we will assess a fee to update your return with the new information. If you provide such information close to a deadline, we may not be able to update your return by the deadline. In such a case, we may advise you to may payments before the deadline, to minimize interest and penalties, and we will update your returns as soon as we are able to do so.

What Are Our Fees for This Engagement? When and How Are They Charged?

Fees for our services will be charged according to our standard fee schedule for tax return preparation services, unless you have a special arrangement through Wolf Group Capital Advisors. Any special fee arrangement applies to the tax return preparation fee, per our standard fee schedule. Tax planning questions and tax technical research or advice that is unrelated to your investment portfolio managed by Wolf Group Capital Advisors is generally not covered by such special arrangements.

Our fee schedule is designed so that our fees reflect the complexity of your returns (number and type of required forms and schedules and other circumstances). Beginning in 2023, some forms that are billed hourly are also subject to minimum fees. Please contact our office if you have not received, and would like a copy of, our current fee schedule.

Fees are considered earned when payment is received, or services concluded, whichever is earlier. Invoices are due and payable on presentation. Past due balances may be subject to finance and collection charges. The Wolf Group reserves the right to progress bill (on an hourly basis) any returns that are delinquent (past the original or extended due date), as well as any returns where our incurred time charges exceed $5,000. Overdue or outstanding invoices may result in work being put on hold.

Many clients prefer to pay their tax preparation fees via credit card. We are now retaining credit card information on file so that you need not call us or separately log in to our website to pay your invoice. Instead, upon completion of your tax returns, your invoice can be charged directly to your credit card on file. If your returns qualify for e-filing (and we receive your signed e-file authorizations within 2 weeks of delivery), we will charge the balance of your invoice to your credit card upon receipt of your signed e-file authorization forms. If your returns must be paper filed or e-filed later, we will charge the balance of your invoice to your card upon delivery of your returns to you.

If you already have a credit card on file with us, we will charge your 2023 tax preparation fees to your card, per the timeline indicated above.

If you would like the convenience of having your credit card information on file with us and having your tax preparation fees charged to your card, please complete the payment page to authorize us to charge tax preparation fees to your credit card upon completion of the returns.

When and How Do Our Services Conclude under This Engagement?

Timing of the Engagement

We expect to begin our services upon receipt of this executed agreement, the completed 2023 income tax questionnaire/organizer, and all documents requested either in the questionnaire/organizer or by our office.

Our services will conclude upon the earlier of:

  • For e-filed returns, the e-filing and e-acceptance of your 2023 tax returns by the appropriate tax authorities and mailing or delivery of non-electronically filed tax returns (if any) to you, or
  • For paper-filed returns, mailing or delivery of your 2023 tax returns to you, or
  • Written notification by either party that the engagement is terminated, or
  • Eighteen (18) months from the execution date of this agreement.

Changing Tax Laws, Regulations, and Guidance

Tax laws and regulations and/or their interpretation are subject to change at any time, and such changes may be retroactive in effect and may be applicable to advice given or other services rendered before their enactment dates. We do not assume responsibility (and will have no liability) for such changes occurring after the date we have completed our services.

Any advice we may provide is based upon tax reference materials, facts, assumptions, and representations that are subject to change. We will not update our advice after the conclusion of the engagement for subsequent legislative or administrative changes or future judicial interpretations. To the extent we provide written advice concerning federal tax matters, we will follow the guidance contained in Circular 230, §10.37, Requirements for Written Advice.

Disassociation or Termination of Engagement

Either party may terminate this agreement at any time upon written notice of termination to the other party. In the event of termination, you will be responsible for fees earned and expenses incurred through the actual date of termination. Should termination occur prior to the completion and delivery of the tax returns, then we will invoice you (on an hourly basis) for any work conducted between the time services were authorized (by the signing of this engagement letter) and the termination of the engagement. We will also return any original documents to you.

What Happens If You Are Later Audited?

As you may be aware, tax returns and other filings are subject to examination by taxing authorities. We will generally be available to assist you in the event of an audit or any issue for which we have provided services under this agreement. However, unless otherwise indicated, our fees for these additional services are not included in our fee for the services covered by this agreement.

Audit Insurance

If you purchase audit insurance, we will provide up to 5 hours of professional services free of charge in response to an examination or notice; it does not cover identity theft matters. Additional work beyond 5 hours will be charged at our standard hourly rates. If you have not purchased audit insurance for the tax year that is being examined, we may nevertheless assess and/or reply to correspondence or represent you in front of tax authorities, but we will do so only at your request and any such services will be provided under a separate engagement letter. We reserve the right to deny audit insurance for any reason.

Support for Examinations by Tax Authorities

Not every interpretation of promulgated tax rules is straightforward and/or without uncertainty. Accordingly, we will use our professional judgment in preparing your returns. If a tax authority should later contest a position taken, or otherwise impose penalties and/or interest for non-compliance with tax laws and regulations, there may be an assessment of additional tax plus interest and/or penalties. We assume no liability for any such additional assessments. Any items resolved against you by the examining agent are subject to certain rights of appeal. In the event of an examination, we may be available to represent you. Since the selection of your return for review or examination is beyond our control, our fee to prepare your returns does not include responding to inquiries or examination by tax authorities, unless you have opted for, and are eligible to obtain, audit insurance as part of your tax return preparation services.

In the event we are required by law, government regulation, subpoena, or other legal process, to produce documents or testimony with respect to this engagement, so long as we are not a party to the proceeding in which the information is sought, you agree to reimburse us for our professional time and expenses, as well as the fees and expenses of our counsel incurred in responding to such demands.

Additional Legal Terms

Engagement Limitations

You agree to indemnify and hold us harmless from any and all claims arising from the use of the tax returns for any purpose other than complying with your tax filing obligations regardless of the nature of the claim, excepting claims arising from our gross negligence or intentional wrongful acts.

The services performed under this agreement do not include the provision of legal advice, and we make no representations regarding questions of legal interpretation. You should consult with your attorneys with respect to any legal matters or items that require legal interpretation, under federal, state or other type of law or regulation.


In the course of providing services to you, you may request referrals to products or professionals such as attorneys, brokers, foreign tax preparers, or investment advisors. We may identify professional(s) or product(s) for your consideration. However, you are responsible for evaluating, selecting, and retaining any professional or product and determining if the professional or product meets your needs. You agree that we will not oversee the activities of and have no responsibility for the work product of any professional or the suitability of any product we refer to you or that you separately retain. Further, we are not responsible for any services we perform that fail to meet the intended outcomes as a result of relying on the services of other professionals or products you may retain.

Limitation of Liability

Except to the extent finally determined to have resulted from the gross negligence or other intentional misconduct of The Wolf Group, The Wolf Group’s liability to pay damages for any losses incurred by the client as a result of breach of conduct, negligence or other tort committed by The Wolf Group, is limited to the total amount of fees charged by The Wolf Group for the particular service provided under this agreement to which such claim relates.

Limitation of Actions (Statue of Limitations)

In accordance with the Code of Virginia § 59.1-508.5, you agree to a modified Statute of Limitations to bring an action for breach of contract. The action for breach of contract must be commenced within the later of three years after the right of action accrues or one year after the breach was or should have been discovered, but not later than three years after the right of action accrues.

Other Provisions

Neither party shall be liable to the other for any delay or failure to perform any of the services or obligations set forth in this agreement due to causes beyond its reasonable control.

This agreement shall be governed by and construed, interpreted and enforced in accordance with the laws of the State of Virginia, without giving effect to the provisions relating to conflict of laws.

The Wolf Group, PC is a member of Nexia International, an international network of independent accounting and consulting firms. Nexia International does not accept any responsibility for the commission of any act, or omission to act by, or the liabilities of, any of its members. Membership of Nexia International, or associated umbrella organizations, does not constitute any partnership between members, and members do not accept any responsibility for the commission of any act, or omission to act by, or the liabilities of, other members.

Acceptance of Engagement Terms

If you authorize The Wolf Group, PC to prepare your 2023 individual income tax returns pursuant to the terms set forth above, please sign below and pay the $500 retainer. Retain a copy of this letter for your records.

We want to express our appreciation for this opportunity to serve you.

Very truly yours,

The Wolf Group, PC