Tax Engagement Policy & Procedure

SERVICES TO BE PROVIDED

Simple Startup will prepare your federal and resident state income tax returns from the information you provide to us. We are under no duty to review the information you provide to determine whether you may have a filing obligation with another state, city, or other locality. 

If we become aware of any other filing requirement, we will tell you of the obligation and may prepare the appropriate returns at your request.

Tax engagement does not cover the preparation of any financial statements, or any other accounting or advisory services which, if we are to provide them, will be covered under an agreement based on our Terms of Service. 

However, under the rules of professional responsibility governing our practice, we may have to provide additional accounting or research services that are incidental to preparing our tax return. Incidental services of this nature will be included with the billing for your tax return. 

At your request, we would be pleased to consult with you regarding other income tax matters, such as proposed or completed transactions, income tax projections, and or research in connection with such matters. We will render additional invoices for such additional services at our standard billing rates.

You should note that in order to do proper tax planning work on your return, we require that all your information be provided to us no later than February 15 (although the sooner the better!). If we do not have all the information needed to complete your return by this date, it may be necessary to file an application for an extension, billed at the current billable rate. This may require a tax payment be made by you by April 15, in an amount approximating your unpaid tax liability. The exact final amount may differ upon receipt of any subsequent information necessary to complete the return. You assume responsibility for any differences in tax, including interest and penalties, arising out of the subsequently received information.

If we have filed an application for an extension for your individual tax return, we require that all your information be provided to us no later than August 15. If we do not have all the information needed to complete your return by this date, your return may be subject to additional fees.

Upon completion and receipt of the tax returns, you will be responsible for the timely signature on federal and state e-file authorization forms, as applicable. We will only e-file your returns after we have received these signed and dated forms. Electronic filing of your return does not affect your responsibility to review and approve the return before it is submitted.

It is your responsibility to provide us with all the information necessary for the preparation of complete and accurate returns. You should retain all the documents, receipts, canceled checks, and other data that form the basis of income and deductions for a minimum of seven years. These may be necessary to prove the accuracy and completeness of the returns to a taxing authority. You have the final responsibility for the income tax returns and, therefore, you should review them carefully before you sign them.

Unless we are informed of, and they are added to the proposal, we will not prepare any forms relating to foreign entities and foreign transactions. By signing a tax return proposal, you are confirming to us that any required tax compliance, if any, for foreign business or real estate holdings or foreign transactions has been reported by you and/or an outside party. This includes, but is not limited to, any required reporting of 1/5 financial interest in any foreign accounts on FinCEN Form 114, Forms 3520 and 3520-A for transactions with foreign trusts, including foreign real estate, and Form 5471 for reporting with respect to certain foreign corporations. Please be informed that failure to disclose the required information to the

U.S. Department of the Treasury may result in substantial civil and/or criminal penalties. By signing a tax return proposal, you are also confirming that you do not hold foreign financial assets with an aggregate value exceeding $50,000 (Form 8938).

We will use our professional judgment to resolve questions in your favor where tax law is unclear or if there is a reasonable justification for doing so. Whenever we are aware that a possibly applicable tax law is unclear or that there are conflicting interpretations of the law by authorities (e.g., tax agencies and courts), we will explain the possible positions that may be taken on your return. We will follow whatever position you request, so long as it is consistent with the codes and regulations, and interpretations that have been promulgated. If the IRS should later contest the position taken, there may be an assessment of additional tax plus interest and penalties. We assume no liability for any such additional penalties or assessments.

If during our work, we discover information that affects prior-year tax returns, we will make you aware of the facts. However, we cannot be responsible for identifying all items that may affect prior-year returns. If you become aware of such information during the year, or if you receive any letters from the IRS, state, or local taxing authorities, please contact us to discuss the best resolution of the issue. We will be happy to prepare appropriate amended returns as a separate engagement, which will be billed separately from the preparation of this year’s tax returns.

The IRS permits you to authorize us to discuss, on a limited basis, aspects of your return for one year after the return’s due date. Your consent to such a discussion is evidenced by checking a box on the return. Unless you tell us otherwise, we will check that box authorizing the IRS to discuss your return with us.

We will not file any federal, state, or local tax extensions unless you specifically request us to do so in writing, by fax, or by email. 

Our policy is to put all tax advice in writing. You understand that you will not rely upon any unwritten advice because it may be tentative, incomplete, or not fully reviewed.

In accordance with federal law, in no case will we disclose your tax return information to another tax return preparer outside of our firm for purposes of a second opinion, or to any other third party (except as specified below) for any other purpose without first receiving your written consent. We may use subcontractors, which may be located outside the U.S., to assist us in the process of preparing your tax returns. We have only one subcontractor located outside the U.S., who provides us with a dedicated team of professionals to assist in serving you. We are sensitive to concerns regarding the handling of personal and confidential information and can share further information regarding how we and our subcontractors protect your information upon request. To safeguard the confidentiality of client information, both Simple Startup and any subcontractors have established internal policies, procedures and controls designed to maintain data security and protect privacy. We will not utilize a subcontractor without a written confidentiality agreement in place to prevent the unauthorized release of client information.

Additionally, all information you provide us in connection with this engagement will be maintained by us on a strictly confidential basis according to our firm’s Privacy Policy.

TAX RETURN AMENDMENTS

If you require tax return amendments due to our error the cost will be incurred by Simple Startup. If you require a tax return amendment because of information not provided to Simple Startup, or information that changed since we filed your return, there will be a billable charge to prepare and file your tax return amendment, which will be determined depending on the extensiveness of the changes.

CLIENT RESPONSIBILITIES

We will provide you with an information checklist and questionnaire requesting specific information. Completing these forms will assist us in making sure you are well served for a reasonable fee. In providing this information to us, you represent that the information you are supplying is truthful, accurate, and complete to the best of your knowledge and that you have truthfully disclosed to us all income and other relevant factors affecting the returns. You further represent that you have provided us with true, correct, and complete information regarding amounts you claimed as tax deductions, and have maintained written documentation supporting all amounts, including log books and receipts.

The Internal Revenue Code and regulations impose preparation and disclosure standards with non-compliance penalties on both the preparer of a tax return and the taxpayer. These standards differ and are higher for return preparers than taxpayers. To avoid exposure to these penalties, it may be necessary in some cases to make certain disclosures to you and/or in the tax return concerning positions taken on the return that don’t meet these standards. 

Accordingly, we will discuss tax positions that may increase the risk of exposure to penalties and any recommended disclosures with you before completing the preparation of the return. If we conclude that we are obligated to disclose a position and you refuse to permit the disclosure, we reserve the right to withdraw from the engagement and you agree to compensate us for our services to the date of withdrawal. Our engagement with you will terminate upon our withdrawal.

TAX EXAMINATION

You understand that taxing authorities may examine the returns and that penalties may be imposed on returns that are late, underpaid, or incorrect. 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 a tax return. As such, you should know that IRS audit procedures will almost always include questions on bartering transactions and on deductions that require strict documentation such as all charitable contributions, travel, meals, and entertainment expenses and expenses for business usage of autos, computers, and cell phones. In preparing your returns, 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. We are not responsible for disallowed deductions, the inclusion of additional unreported income, or any resulting taxes, penalties, or interest. If you have questions about these issues, please contact us.

Any proposed adjustments by the examining agent are subject to certain rights of appeal. Our standard tax preparation fee does not include responding to inquiries or examinations by taxing authorities. However, we will be available, upon request, to represent you. You understand that you will be charged an additional fee if we are asked to assist or represent you in a tax examination or inquiry.

You understand that, in the event of a preparer error, you are responsible for the additional tax that may be due.

COMPENSATION

Please refer to our provided estimate to prepare your tax return. Our fees are not contingent on the results of our services. Fees for our tax return preparation services are based upon the appropriate market rate for the level and value of services rendered. We require a tax retainer in the amount of $750 for business tax returns. The remaining balance will be billed upon submission of your tax return. 

You can view our online business tax cost estimator tool. This is only an estimate and your final bill will be determined by the actual work performed. 

In the event that payment is not received when due, you will be held to our regular guidelines per our Terms of Service. The suspension or termination of our work may cause you to fail to meet deadlines imposed by creditors, governments, or other third parties. In that event, you agree that we will not be responsible for your failure to meet said deadlines. 

Additionally, if we elect to terminate our services for nonpayment, our engagement will be deemed to have been completed upon written notification of termination, even if we have not completed the services contemplated in this policy and procedure. You will be obligated to compensate us for all time expended and to reimburse us for all out-of-pocket expenditures through the date of termination. In the event that any collection action is required to collect unpaid balances due to us, you agree to reimburse us for our costs of collection, including attorney fees.

CONFIDENTIAL INFORMATION

Certain communications involving tax advice are 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 this right to privileged communication, please consult with us or your attorney prior to disclosing any information about our tax advice.

Should you decide that it is appropriate for us to disclose any privileged communication; you agree to provide us with written, advanced authority to make that disclosure.

SUBPEONAS AND OUTSIDE INQUIRIES

Should we receive any request for the disclosure of privileged information from any third party, including a subpoena or IRS summons, we will notify you prior to responding to it if we are legally permitted to do so. You may, within the time permitted for our firm to respond to any request, initiate such legal action as you deem appropriate to protect information from discovery. If you take no action within the time permitted for us to respond or if your actions do not result in a judicial order protecting us from supplying requested information, we may construe your inaction or failure as consent to comply with the request. In the event you direct us to not make the disclosure, you agree to hold us harmless from any expenses incurred in defending the privilege, including, by way of illustration only, our attorney’s fees, court costs, outside advisor’s costs, or penalties or fines imposed as a result of your asserting the privilege or your direction to us to assert the privilege. In the event we are required to respond to a subpoena, court order, or other legal processes for the production of documents and/or testimony relative to information we obtained and/or prepared during the course of this engagement, you agree to compensate us at our standard hourly rates, for the time we expend in connection with such response, and to reimburse us for all of our out-of-pocket costs incurred in that regard.

DISPUTE RESOLUTION

Potential errors may occur in your tax return(s) that can result in damages that may be many times the amount of the fees for this engagement. In order to induce us to accept this engagement, you, therefore, agree that our liability for any negligent errors or omissions committed by us in the performance of the engagement will be limited to the total amount of fees paid by you to us under the terms of this agreement.

Because there are inherent difficulties in recalling or preserving information as the period after an engagement increases, you agree that, notwithstanding the statute of limitations of the State of Colorado, any claims based on this engagement must be filed within twelve (12) months after performance of our service, unless you have previously provided us with a written notice of a specific defect in our services that forms the basis of the claim.

In the event that any portion of this policy and procedure is deemed invalid or unenforceable, said finding shall not operate to invalidate the remainder of this policy and procedure.

CONFIRMATION OF AGREEMENT

Signing a tax return proposal constitutes acknowledgement of the terms and conditions outlined in this policy and procedure, which is contractual in nature and includes all of the relevant terms that will govern the engagement for which it has been prepared. The terms of this policy and procedure supersede any prior oral or written representations or commitments by or between the parties. Any material changes or additions to the terms set forth in this policy and procedure will only become effective if evidenced by a written amendment to this policy and procedure, signed by all of the parties.

By signing a tax return proposal you signify your acceptance of the terms and conditions as outlined in this policy and procedure document as well as our general Terms of Service. 

We appreciate the opportunity to be of service to you. We will initiate services when we receive your signed tax return proposal. 

NOTE: if you live in a community property state (AZ, CA, ID, LA, NV, NM, TX, WA, and WI) both spouses are required to sign any proposal relating to personal tax returns.

CONTACT US

Simple Startup welcomes your questions or comments regarding the Terms:

Simple Startup

Email Address: operations@simplestartup.com

Last updated July, 2024