1. Introduction and Scope of Engagement
Thank you for choosing Polaris Tax & Accounting to assist with the preparation of your partnership tax returns. This letter confirms the terms of our engagement and outlines the nature and extent of the services we will provide.
We will prepare your federal and state income tax returns for the tax year(s) specified. This engagement is limited strictly to tax preparation. Services such as tax planning, advisory, bookkeeping, payroll, international compliance (e.g., FBAR, BOI/CTA filings), or other regulatory filings are not included unless separately contracted in writing.
2. Completion, Authorization, and Billing
Substantial Completion: Your return is deemed substantially complete once a draft has been uploaded to our secure client portal along with IRS Form 8879-PE (e-file authorization). At this point, all agreed services for the return have been performed, and fees are considered earned regardless of whether you ultimately authorize filing.
Seven-Day Review Period: You will have seven (7) calendar days to review the draft and sign Form 8879-PE. Polaris will address reasonable clarifications based on information already provided. If you remain unresponsive after this period, Polaris may, at its discretion:
- Close your file without filing the return; and
- Charge the earned fee to the payment method on file.
Amendments and Re-Engagements: Any reopening, amendments, or further work requested thereafter will constitute a new engagement and be billed separately at prevailing rates.
Billing Method:
- Package Clients: If your tax return is included in a prepaid service package, no additional tax prep fees apply unless out-of-scope services (e.g., amendments, additional state returns, foreign forms) are required.
- Non-Package Clients: Fees are automatically processed once the return is deemed substantially complete, subject to the seven-day review window.
Initiating a chargeback for services rendered constitutes a breach of this agreement.
3. Responsibility for Information Provided
By signing Form 8879-PE, the partners confirm that they have reviewed the return in good faith and that, to the best of their knowledge, the information provided is true, correct, complete, and accurate.
You are solely responsible for full disclosure of all relevant information, including but not limited to: partner allocations, capital accounts, guaranteed payments, foreign financial accounts, foreign entities, and multi-state activity.
Polaris is not responsible for penalties, interest, or amendments caused by nondisclosure.
Amendments due to omitted or inaccurate information are treated as new engagements, billable separately.
4. Reliance on Information and Prior Records
Polaris may, in good faith, rely on information provided by the partnership, prior preparers, or third parties (such as Schedules K-1, Forms 1099, or capital account statements). We are not required to audit, review, or verify this information, though we may request clarification if something appears inconsistent.
The partners agree to hold Polaris harmless for any errors resulting from our reliance on prior records or incomplete disclosures. Amendments due to such reliance are separate engagements.
5. IRS Standards and Penalties
The IRS imposes penalties on taxpayers—and in some cases preparers—for failure to exercise due care. Polaris will meet all professional due diligence requirements but is not liable for penalties, interest, or assessments arising from your failure to provide accurate or complete information.
6. Multi-State and Foreign Reporting Obligations
Multi-State: We prepare only the returns disclosed to us and agreed upon in this engagement. If your partnership has taxable activity in another state but does not notify us, you remain solely responsible for any resulting tax, penalties, or interest.
Foreign Reporting: If the partnership or its partners have foreign income, financial interests, or signature authority in foreign accounts, you must disclose this truthfully and timely. Polaris can prepare related forms (e.g., FBAR, Form 8865, 5471, 5472, 3520, 8938, 8621) only if you disclose accurate details.
Client Responsibility: We will not independently investigate undisclosed foreign assets. Failure to disclose can lead to substantial civil and/or criminal penalties, for which the partners accept full responsibility.
7. Deadlines and Client Responsibilities
All information must be provided at least 30 days prior to the filing deadline. Information received after that date may result in an extension, and Polaris makes no guarantee of timely filing. We do not accept “rush” requests after the cutoff.
The partners remain responsible for the payment of all taxes, penalties, and interest regardless of whether Polaris prepares the return. You must remain engaged and responsive throughout the process. If you send documents but do not receive confirmation, you must follow up.
8. Privilege, Confidentiality, and Record Retention
Privilege: Polaris will not disclose communications unless legally compelled. If privilege is challenged, you agree to cover costs (including legal fees) in protecting it. Confidentiality may be waived if you disclose our communications to third parties.
Record Retention: We retain records for three (3) years from the later of the filing or due date. Originals are never retained; they remain your responsibility. After this period, we may securely destroy our records without notice.
Organizers: We provide an annual digital organizer through our secure portal, which must be completed before we prepare your return.
9. Electronic Communication
We may communicate electronically (email, portal, fax). While reasonable precautions are taken, electronic transmission carries risks of unauthorized interception. By engaging us, you consent to electronic communication and accept these risks. Sensitive documents must be sent only through our secure portal.
10. Investment Advice Disclaimer
Polaris is not an investment advisor. We do not provide recommendations regarding the risk, viability, or consequences of investment decisions. You should consult a qualified financial advisor for investment-related matters.
11. Fees, Payment, and Delinquency
Invoices are due upon presentation. Accounts are delinquent if unpaid after 30 days. At 60 days delinquent, Polaris may suspend work or withdraw from the engagement. We are not liable for damages caused by suspension/withdrawal due to nonpayment.
If work has been performed (including draft preparation) and you decline to authorize filing, the full fee remains earned and immediately payable.
12. Dispute Resolution, Governing Law, and Limitation of Liability
This agreement is governed by Florida law. Any disputes must first be submitted to mediation (AAA rules). If unresolved within 60 days, disputes proceed to binding arbitration (AAA). Venue is Broward County, Florida.
To the fullest extent permitted by Florida law:
- Polaris’s liability for any claim is limited to the fees actually paid.
- Polaris is not liable for indirect, consequential, or punitive damages.
13. Acknowledgment
By signing this engagement letter, the partners confirm that they understand and agree to these terms.