Sample Tax Services Agreement

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Each year I’ve modified my tax services engagement agreement as circumstances and technologies change. This is the current version of the individual tax service engagement agreement. The primary goal of the engagement agreement remains the same: to document our mutual understanding or the work to be performed in a plainly worded format.

Thank you for choosing me to help you with your taxes. My goal is to give a stress-free tax filing experience. Clear communication plays a large part in this process. This letter confirms the terms of my engagement with you and outlines the nature and extent of the services I will provide.

“I” and “me” used throughout this agreement refers to Tony Novak, my supervised staff, service providers and contractors. “You” refers to you and your spouse, if applicable, and any dependent on the tax return or other person who provides tax information. “Writing” includes text messages and email communications.

COMMUNICATIONS: Non-secure communications about this service can be made through any of the following: Email:, Bus. Phone: (800) 609-0683, Cell/text: 856-723-0294, Fax: 888-581-0748, Skype: novak.tony, or Facebook messenger account: Onlineadviser.

Secure communications through a document portal are described separately in this agreement.

WORK TO BE COMPLETED: I will complete the following work as part of this engagement.

Prepare your 2016 federal and resident state income tax returns. Additional state tax returns, local income tax returns and other filings are included only if separately confirmed by us in writing.
Perform any bookkeeping necessary for preparation of the tax returns. This will include a summation of data for business income and expenses from the format that you provide into the format presented in the tax return.
Compare this year’s tax return with the prior year to look for inconsistencies, risks, and opportunities for potential savings.
Electronically file your tax return and provide you with evidence of acceptance of the electronic filing, unless paper filing or other arrangements are agreed.
Provide an electronic copy of all filings via secure private online document portal. A paper copy of the tax return is available on request at a standard fee.
Communicate with you directly in person, by telephone and email during the engagement but not in excess of twenty total communications, or one hour of total communication time, whichever is more.

LIMITATIONS OF WORK: My work in connection with the preparation of your income tax returns does not include any procedures or any tax return not listed above. I will perform accounting services only as needed to prepare your tax returns. My work is not designed to discover defalcations or other irregularities, should any exist. I will use my judgment in resolving questions where the tax law is unclear, or where there may be conflicts between the taxing authorities’ interpretations of the law and other supportable positions. Unless otherwise instructed by you, I will resolve such questions in your favor whenever possible.

RESPONSIBILITIES: We will depend on you to provide the information needed to prepare complete and accurate returns. I may ask you to clarify some items but will not audit or otherwise verify the data you submit. A Tax Organizer is provided to help you collect the data required for your return. The Tax Organizer will help you avoid overlooking important information. By using the Tax Organizer, you will contribute to efficient preparation of your returns and help minimize the cost of our services.

PRIVACY AND SECURITY: I follow a privacy and security policy that meets or exceeds industry standards. The policy is available online at and is not produced here. If you want an electronic or paper copy of the policy, please let me know. You are not required to adhere to any specified privacy and security standard. You may take the lead in modifying the standard and I may follow your lead. For example, if you ask a question about your taxes in a public area and I answer, then that changes the level of privacy. You may submit documents via text message and I may respond to the same text message number with personal tax information.

PASSWORD PROTECTED DOCUMENTS: Documents that I send may be protected by a password. The password may be sent separately through another method of communication. The usual password is the first four digits of your last name followed by the last 5 digits of your social security number or tax ID number.

FEE: The fee will be communicated in advance, in writing. Usually this is communicated by emailed invoice.

PAYMENT: Payment is due in advance at the time this engagement is signed or when I send the invoice. Payment may be made through the secure 3rd party payment processing system linked to the invoice. Most clients use the QuickBooks Payments “click and pay” from the electronic invoice. You may elect to initiate payment through another payment processor of your choice like PayPal or Venmo. Payment may be made from any bank account (using your bank routing number and account number), bank card or credit card for the payment.

ADDITIONAL FEES: Unless we have reached another fee arrangement in writing, an additional receivables management fee of $15 is applied if payment is made in cash, manual check, or if payment for my service is not made prior to the completion of my work. If a fee remains unpaid 3 days after the completion of my work or than additional receivables management $15 fee applies for the services of a receivables management firm that handles additional invoices. If payment is still outstanding after 30 days then an additional $15 fee applies. If a fee remains unpaid after 90 days then an additional fee of 40% of the balance is added to cover the cost of the collection service.

AUTOMATIC EXTENSION: If we enter into a tax services agreement but do not complete all of the requirements necessary for filing by the tax return due date, you authorize me to file an extension. An additional $75 fee will apply for the extension. This engagement will then extend to the extend to the actual tax filing date or the end of the extension period, whichever comes first.

COST-SAVING MEASURES: The lowest fee quoted in advance presumes the use of cost-saving measures including the use of a tax organizer document or online accounting software, online document storage and transfer, electronic invoicing and payment and electronic paperless fling. Cost-saving measures do not anticipate the use of paper records. You are not required to use these cost-saving tools, however, but I want you to know how these technologies affect the price of services. and we utilize the most efficient method of electronic transactions with no added accounting services or out-of-pocket expenses. If cost-saving measures are not used, my actual fee will be based on the time required at standard billing rates plus out-of-pocket expenses. Invoices are due and payable upon presentation prior to filing. A rebilling fee applies to open balances after the filing date. A collection fee applies to open balances after 150 days.

ONLINE DOCUMENT HANDLING: I will provide a private secure online portal as the safest and most reliable way to deliver electronic documents. The preferred and most common electronic document format is PDF. Other communication methods are accepted (fax, mail, email, text, etc.) however, you assume the additional security risk if you elect to use those less secure methods. I will retain electronic copies of your records and our work papers for your engagement for seven years. Copies of documents are available at a standard fee.

PAPER DOCUMENT HANDLING: If we accept any original paper records from you, they will be returned to you as soon as possible. You should store original paper records, along with all supporting documents, canceled checks, etc., as these items may later be needed to prove accuracy and completeness of a tax return. I recommend that you scan and save electronic copies of all original paper documents and I offer this service at a standard. Otherwise, I do not keep copies of original paper documents.

TIMING OF WORK: The work under this engagement starts when the agreement is signed and delivered and payment of the online invoice is received. The timing of completion of work is largely dependent on the date of delivery of requested information. I will communicate in writing of the expected completion of work date, review date and the filing date. I will also communicate any change in the expected dates in writing within 48 hours of any such change.

END OF ENGAGEMENT: Our engagement to prepare your 2016 tax returns ends with the delivery of the completed returns to you (for paper filings) or your signature and our subsequent submittal of your tax return (for e-filed tax returns). If you have not selected to e-file your returns with our office, you will be solely responsible to file the returns with the appropriate taxing authorities unless we make other written recommendations. Review all tax-return documents carefully before signing them.

EARLY END OF ENGAGEMENT: Either of us may opt to end this engagement before the time described above in the END OF ENGAGEMENT section by giving written notice. There may or may not be a reason stated for the early termination and we may recognize that a termination without stated reason is in our collective best interests. In the event of early termination, the fee for the engagement will be reduced to half of the amount listed in the FEE AND PAYMENT section below. All work will stop at the point of notice and provisions included in the WORK TO BE COMPLETED section above will no longer apply. Both of us acknowledge that the simple provisions in this EARLY END OF ENGAGEMENT agreement are intended to be used as a means to avoid conflict in the event that circumstances change for either of us.

IN THE EVENT OF AUDIT: Your returns may be selected for review by the taxing authorities. Any proposed adjustments by the examining agent are subject to certain rights of appeal. In the event of such government tax examination, I may be available upon request to represent you and will render additional invoices for the time and expenses incurred. The procedures and fees for representing you in an audit are not included in this agreement and no assurance is provided in this agreement that I will be available for representation in an audit.

PENALTIES: The law imposes penalties when taxpayers underestimate their tax liability. Please call me if you have concerns about such penalties. Should we encounter instances of unclear fact or tax law, or of potential conflicts in the interpretation of the law, we will outline the reasonable courses of action and the risks and consequences of each. We will ultimately adopt the alternative you select. I do not assume the cost or risk of tax penalties that may be imposed.

OTHER ADVICE: During the work of accounting I am likely to find other financial and accounting topics that we should discuss. The results of these possible additional discussion and any resulting work stemming from those discussions are not covered in this letter.

EXTRAORDINARY CIRCUMSTANCES: Unique circumstances affecting this engagement may be discovered after the signing of this agreement. These will be confirmed separately in writing and are incorporated by reference into the overall agreement.

To affirm that this letter correctly summarizes your understanding of the arrangements for this work, please sign the enclosed copy of this letter in the space indicated and return it to us in the envelope provided.


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