[Anonymous]

I started my practice 6 months ago, it was my first tax season all by myself! However, I did not have any of my clients ( I had about 70 clients) sign an engagement letter or anything that would cover my from any sort of liability.
I recently went to a tax seminar and they mentioned how we should provide our clients engagement letters for tax preparations.
Question: To those who work in tax, is this very common for tax preparation for individuals?
* I prepare more 85% individual tax returns.

CPA 2016 WI

[KaliKingz]

Yes, very common and important. I suggest you get a signed engagement letter before you provide your clients with a copy of the tax returns. Also, make sure you have a signed disengagement letter when you disengage with a client.

[Anonymous]

I worked in a micro firm (1 owner, 1 full-time employee, and 1 part-time employee), and we used engagement letters. It was customizeable through our tax prep software (Drake), and then it printed automatically with each return. So, when you went to print, you'd print the Form 8879 (since we did e-file) for the client to sign, the engagement letter for the client to sign, the state efile form for them to sign, the return for their records, etc. When customers came to pick up their returns, we'd give them the e-file forms and the engagement letter, they'd sign all 3, then we'd give them their return. I didn't have anyone in my time there question or have an issue with the engagement letter, and we had new customers that year as well as the old-timers who were already familiar with it. Some would ask me what it said, and I'd give a quick run-down, but I think most people just sign whatever their tax preparer hands to them (which isn't good, cause people should always read what they're signing, but…).

I think the ideal way to do it would be to print the engagement letter prior to doing the return (which could be done through Drake, too), and then when they come back they're just signing the efile agreements. But, that's an extra step, and probably not practical for everyone; there's times of tax season that it would've been very challenging for us!

[Anonymous]

Thank you all for your responses! I use Pro Series I am looking to see if they have that option and if they don't I still need to do that…

[NYSCPA]

https://www.journalofaccountancy.com/issues/2014/jan/20137591.html

“It and most of the following passages are from or based on a full sample engagement letter available here” You can click the “here” and it will link you to a Word Format Sample Engagement Letter.

[Author]

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