Reducing Your Risk: Documentation and Engagement Letters

By Randy R. Werner, J.D., LL.M./Tax, CPA

CPA liability exposures during tax season are always a concern, regardless of economic or professional conditions. CAMICO’s claims experience shows that many high-exposure tax claims have certain characteristics in common, primarily as follows:

  • The services for which the client had engaged the CPA were unclear.
  • The CPA had not clarified his or her role or the client’s expectations, usually because an understanding between the CPA and the client had not been reached or adequately documented.

Tax Engagement Letters Updated for 2017

All tax letters on the CAMICO Members-Only Site are current for the 2016 tax filing year. The following CAMICO sample engagement letters have been updated for the deadline changes for FBARs (Report of Foreign Bank and Financial Accounts) due in 2017 for calendar year 2016:

Individual Income Tax Preparation — Expanded
Corporate Income Tax Preparation — Expanded
S-Corporation Income Tax Preparation
Partnership Income Tax Preparation — Expanded
Income Tax Preparation for a Single-Member LLC
Preparation of Estate Tax Returns

Return Due Dates Change

The Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 ("Highway Act") changed the due dates for partnership and corporate income tax returns as well as for FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR), among other items.

For taxable years beginning after Dec. 31, 2015, the Act changed certain return due dates. These changes did not impact payments made during calendar year 2016, but do impact payments to be made in 2017 and beyond.

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