Engagement Letter – Individual

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  • Thank you for choosing Etrends Group to prepare your individual federal and state income tax returns for the year 2018. This letter is to confirm our understanding of the terms and objectives of our tax services engagement and to clarify the nature and limitations of the tax services to be provided.

    Our engagement will be designed to perform the following services:

    • Prepare your individual federal and the necessary state income tax returns with supporting schedules for the tax year 2018.
    • If requested, we will provide questionnaires and worksheets to guide you in organizing the information we need to prepare your tax return(s).

    It is your responsibility to provide us with all the information necessary for the preparation of complete and accurate income tax return(s). We will not verify the information you give us; however, we may ask for additional clarification of some information. Since the return(s) will reflect the information that you have given us, you have the ultimate responsibility for its accuracy; therefore you should review it carefully before you sign and file it. The information you have submitted is for the sole purpose of preparing your tax return(s). Each item can be substantiated by receipts, canceled checks, or other documents. This information is true, correct, and complete to the best of your knowledge.

    ETRENDS GROUP procedures in connection with the preparation of your income tax return(s) do not include any procedures designed to discover errors or other irregularities in the information you provide to us, should any exist. We will provide any tax and accounting assistance ETRENDS GROUP or you find necessary for the preparation of the return(s). In some cases third party providers may be used in the preparation of your tax returns. In all such cases, required due diligence regarding safeguarding of information will be followed.

    Because the tax law is not always clear, ETRENDS GROUP will use its professional judgment is assisting you to resolve questions affecting your return(s). Your return(s) are subject to examination by the taxing authorities, who may not agree with your positions. In the event of an audit, you may be requested to produce documents, records, or other evidence to substantiate the items of income and deduction shown on your tax return(s). Any requests or adjustments they propose are subject to certain rights of appeal. If an examination occurs, ETRENDS GROUP will generally be pleased to represent you if you so desire; however, these additional services are not included in our fee for preparation of your return(s).

    Because of the lack of clarity in the law, ETRENDS GROUP cannot provide assurance that positions asserted by taxing authorities will not ultimately be sustained. It is important for you to know that the law imposes a percentage penalty if a taxpayer makes a "substantial understatement" of tax liability.

    For individual taxpayers, a substantial understatement is when the understatement for the year exceeds the greater of 10% of the tax required to be shown on the return, or $5,000. The penalty is 20% of the underpaidtax. You should also know that IRS audit procedures will almost always include questions on bartering transactions and on deductions that require strict documentation such as travel & entertainment expenses and expenses for business usage of automobiles and computers. In preparing your return(s), we rely on your representations that we have been informed of all bartering transactions and that you understand and have complied with the documentation requirements for your expenses and deductions. If you have questions about these issues, please contact us before your return(s) is finalized.

    The IRS and some states have issued "tax shelter" rules that require taxpayers to disclose their participation in "reportable transactions" by attaching a disclosure form to their federal and/or state income tax return(s). These rules impose significant requirements to disclose transactions and such disclosures may encompass many transactions entered into in the ordinary course of business or in your personal investing activities. Failure to make such disclosures could result in substantial penalties. You are responsible for ensuring that you have properly disclosed all reportable transactions. ETRENDS GROUP will not be liable for any penalties resulting from your failure to accurately or timely file any required disclosure. Please note that any disclosure required by or made pursuant to the tax shelter rules is separate and distinct from any other disclosure that you might be required or choose to make with your return(s).

    If you are unclear about these tax shelter disclosure responsibilities or if you believe that you have engaged in transactions that may constitute a tax shelter or that could result in substantial understatements of income tax if the claimed tax position is not sustained, you should immediately discuss such transactions with our tax professionals.

    Our fees for this engagement are based upon an estimation of what it will cost to prepare a complete and accurate return based upon our normal billing rates, plus out-of-pocket expenses, and computer processing charges. It is understood that if it takes us more time to complete the return than has been prepaid at our hourly billing rates, or if additional services are required, there will be an additional charge equal to the time required to complete the task at our hourly billing rates. Hourly rates vary from $75 to $300 per hour depending on the individual providing the services. The cost of special request regarding delivery options will be charged to you. Otherwise, all tax returns will be available for pickup, secure online vault transfer, or mailed via the US postal service at standard ground rates. All invoices are due upon receipt prior to the beginning of our services. If you need a printed copy of prior year returns, the cost is $25.00 per return.

    Although we are available to provide you with tax planning advice, we are not obligated to do so unless you have paid specifically for this service. It is our policy to put all tax planning advice in writing. You should not rely on any advice that has not been fully reviewed and put in writing by our firm. This tax planning advice will be charged based upon our standard hourly rates, and usually must be paid in advance to any services being performed.

    Gift tax returns must be filed if you made gifts during 2018 exceeding $14,000 to any individual. The Internal Revenue Service may assert and assess tax and interest at any time due to any gift not disclosed in a gift tax return. You may also be required to file a gift tax return for certain gifts under $15,000 (e.g., gifts to trusts requiring an allocation of the generation-skipping transfer tax exemption, as an example). Failure to file a gift tax return to allocate generation-skipping transfer tax exemption to transfers in trust can result in substantial future tax liabilities. If you have questions or believe that you may need to file a gift tax return please speak with one of our tax professionals

    Certain communications involving tax advice between you and our firm may be privileged and not subject to disclosure to the IRS. By disclosing the contents of those communications to anyone or by turning over information about those communications to the government, you may be waiving this privilege. To protect your right to privileged communication between yourself and our firm, please consult with us or your attorney prior to disclosing any information about our tax advice.

    If, during our work, we discover information affecting your prior year tax return(s), we will make you aware of the facts. However, we cannot be responsible for identifying all items that may affect prior year return(s). If you become aware of such information during the year, please contact us to discuss the best resolution of the issue.

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