Thank you for choosing Polaris Tax & Accounting to assist you with your taxes. This letter confirms the terms of our engagement and outlines the nature and extent of the services we will provide.

Scope of Services:

We will prepare your federal and state income tax returns. Before electronically submitting the returns to the Internal Revenue Service and State Tax Authority, we will provide you with a copy for your review. We will discuss the information reported and how we determined your tax liability or refund. Please carefully review the information reported.

Once you sign Form 8879 (IRS e-file Signature Authorization) along with this agreement, we will assume that you have reviewed the information contained in your tax returns and, to the best of your knowledge, believe the information to be accurate, true, correct, and complete. Therefore, your signed Form 8879 and this agreement signify your authorization for us to submit your tax returns to the Internal Revenue Service and State Tax Authority. Upon review and signed authorization to e-file, you agree to hold us harmless for any misclassifications or misstatements. Our firm reserves the right to charge an additional fee should your tax returns require further modifications due to misclassifications or misstatements.

Reliance on Information:

Under general due diligence standards, we can rely in good faith on information provided by you or third parties and contained in previously filed returns. We may rely on advice, schedules, or other documents prepared by you, another adviser, or another preparer whom we believe was competent. We will not audit, review, compile, or verify the data you submit, although we may ask for some of the information. We are not required to audit, examine, or review books and records, business operations, documents, or other evidence to independently verify information provided by you or reported on previously filed returns. However, we will make reasonable inquiries if the information appears incorrect, incomplete, or inconsistent.

Third-Party Requests:

From time to time, third parties may request that we sign verifications of income, employment, or tax filing status. Since we are engaged only to prepare your income tax return without examination, review, audit, or verification, professional standards prohibit us from signing such documents. These returns are not intended to benefit or influence any third party.

Amendments and Additional Fees:

You agree to hold us harmless for any errors on tax returns prepared by us if we relied in good faith on information reported by you or your prior preparer, and this information was later deemed erroneous. Should we need to amend previously filed returns due to such errors, we reserve the right to treat these amendments as a separate engagement, subject to additional billing.

IRS Penalties and Compliance:

The Internal Revenue Service imposes penalties on taxpayers and return preparers for failure to observe due care in reporting. To ensure mutual understanding of our responsibilities, we ask you to confirm the following arrangements:

We will prepare your federal and state tax forms for the specified year. We do not use foreign third parties for tax preparation. We may ask you to clarify some information and may provide organizers and questionnaires to help you gather necessary information. We are responsible for preparing only the specified returns. If you have taxable activity in another state, you must inform us and provide all necessary information. Additional state returns will be prepared as a separate engagement.

Foreign Income and Assets:

If you have derived income from a foreign country, we will use the information you provide to calculate applicable federal or state foreign tax credits. However, you are responsible for meeting any foreign tax or reporting requirements. You must inform us of any foreign accounts exceeding $10,000 in value. Failure to disclose such information may result in substantial penalties.

Filing Jointly or Separately:

Filing a joint return may result in lower tax liability but renders both spouses jointly liable for the entire tax liability. If you choose to file separately, each spouse reports their own income, deductions, credits, and withholding on separate returns. By signing this engagement letter and Form 8879, you acknowledge the benefits and burdens of filing a joint return.

Extensions and Deadlines:

An extension to file your returns extends the filing deadline but does not extend the payment deadline. Failure to pay taxes or estimated payments on time may result in penalties and interest. We request your paperwork by March 15th to prepare your return without an extension. If received after March 15th, we cannot guarantee filing by the deadline. For extended returns, we request paperwork by October 4th.

Client Responsibilities:

You must provide all information necessary to prepare your returns in a timely manner. It is your responsibility to maintain documentation supporting your tax return data. If you have questions about required records, please ask us. Carefully examine and approve your completed tax returns before signing and mailing them. We are not responsible for disallowed deductions or unsupported documentation. We will rely on information from third parties without further verification.

Records Retention:

We keep records related to this engagement for four years, after which they are destroyed. We do not keep original client records and will return these to you upon completion of services. Retain and protect your records for future use, including potential examinations by government agencies.

Confidentiality and Professional Judgment:

We will use our professional judgment in preparing your returns. If applicable tax law is unclear or conflicting, we will explain possible positions and adopt your preferred position, provided it is consistent with regulations. We assume no liability for additional taxes, penalties, or assessments resulting from a contested position.

Electronic Communication:

We may communicate via facsimile or email. While we strive to maintain security, we cannot control unauthorized interception once sent. You accept the use of electronic communication during this engagement.

Investment Advice:

We are not investment advisors. For investment decisions, seek advice from qualified investment advisors.

Billing and Payment Terms:

  • Existing Clients: Your fee will remain the same as last year unless communicated otherwise before commencing work. Any changes will be communicated in advance and agreed upon.
  • New Clients: Fees will be communicated and agreed upon before starting work.
  • Invoices are due within 30 days. Non-payment may result in service suspension.

Dispute Resolution:

Disputes will first be attempted to resolve through mediation administered by the American Arbitration Association. If unresolved within 60 days, disputes may proceed to arbitration. Mediation costs are shared equally.

Electronic Questionnaire:

We require clients to complete an electronic questionnaire via TaxDome. By checking the acknowledgment box in the questionnaire, you confirm that you have read and agree to our Engagement Letter.

Thank you for the opportunity to be of service. If you have any questions, contact our office at 704-947-3178.


Polaris Tax & Accounting