Our Billing & Engagement Policy

Our Billing & Engagement Policy

1. Information and data. You are responsible for management decisions and functions, and for designating an individual who possesses suitable skill, knowledge, and/or experience, preferably within senior management, to oversee any bookkeeping services, payroll services, tax services, profit-sharing plan services, and other services we provide. You are responsible for evaluating the adequacy and results of the services performed and accepting responsibility for such services. You are responsible for establishing and maintaining internal controls, including monitoring ongoing activities.

Our engagement cannot be relied upon to disclose errors, fraud, or illegal acts that may exist. However, we will inform an individual or person(s) you specifically identify of material errors and of evidence or information that fraud or other illegal acts may have occurred to the extent we have ascertained those matters and if the material errors, evidence or information come to our attention during the performance of our engagement.

During the course of our engagement, we may obtain from you certain brokerage or other account statements or information. We utilize these documents obtained from you for tax reporting and planning or support for financial statement preparation. We do not examine them for accuracy. We do not examine them for propriety of investments in your portfolio. In short, you have no expectation that we have analyzed or otherwise rendered any opinion about the investments or the portfolio.

You agree to provide us with all necessary information and accurate data in a timely manner. Please be aware that delayed responses to our requests for information can result in increased fees, as repeated efforts to collect data force us to address your matters multiple times. We have the right to withdraw from this engagement, at our discretion, if you do not provide us with any information we request in a timely manner, refuse to cooperate with our reasonable requests, or misrepresent any facts. Our withdrawal will release us from any obligation to complete your returns and will constitute completion of our engagement. You agree to compensate us for the time and out-of-pocket expenses through the date of our withdrawal.

2. Tax preparation. We may provide you with a questionnaire or other document requesting specific information. Completing those forms will assist us in making sure you are well served for a reasonable fee. You represent that the information you are supplying to us is accurate and complete to the best of your knowledge and that you have disclosed to us all relevant facts affecting the returns. This will include the ownership of or signature authority over any foreign bank accounts and the ownership of any other foreign financial assets. We will not verify the information you give us; however, we may ask for additional clarification of some information.

Our work in connection with the preparation of your income tax returns does not include any procedures designed to discover defalcations or other irregularities, should any exist. We will use our judgment in resolving questions where the tax law is unclear or where there may be conflicts between the taxing authorities’ interpretations of the law and other supportable positions. Unless otherwise instructed by you, we will resolve such questions in your favor, whenever possible.

In the preparation of those returns, we may become aware that you have a filing requirement with another state or other governmental entity. We are not obligated to investigate the information you provide to determine if such a filing requirement exists. If we determine that you have a filing requirement with another state or other governmental entity, we will advise you of this requirement and may prepare such returns for you at your request. Any services related to such filing requirements would be the subject of a separate engagement for which we will execute a separate engagement letter.

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 charitable contributions, travel 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. If you have questions about these issues, please contact us.

If during our work, we discover information that affects your 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, please contact us to discuss the best resolution of the issue. We will be happy to prepare appropriate amended returns as a separate engagement for which we will execute a separate engagement letter.

The law provides various penalties that may be imposed when taxpayers understate their tax liability. If you would like information on the amount or circumstances of these penalties, please contact us. As a reminder:

A Disregarded Entity requires all tax work to be prepared at the individual member (i.e., owner, shareholder, etc.) level. Please refer to the appropriate tax engagement.
A Subchapter S Corporation is an entity whose tax attributes flow through to its shareholders, thus the penalty for substantial understatement of tax relating to shareholder items may be imposed on the shareholders.
A Limited Liability Company taxed as a Partnership is an entity whose tax attributes flow through to its members, thus the penalty for substantial understatement of tax relating to member’s items may be imposed on the members. In addition, other circumstances can cause potential partner-level exposure to penalties. In some cases, it may be necessary to make certain disclosures in the partnership tax return to avoid exposure to penalties.

The Internal Revenue code and regulations impose preparation and disclosure standards with noncompliance penalties on both the preparer of a tax return and on the taxpayer. 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.

It may be necessary to prepare an application for extension of time to file your return when we do not receive your tax information 30 days prior to the due date of your return. Applying for an extension of time to file may extend the time available for a tax authority to undertake an audit of your return or may extend the statute of limitations. An extension only allows additional time to file a tax return; it does not extend the time to pay any taxes that are due.

Additionally, extensions may affect your liability for penalties and interest or compliance with government deadlines. We are available to discuss this matter with you at your request.

You have the final responsibility for the income tax returns and, therefore, you should review them carefully before you sign and file them.

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.
Your returns may be selected for review by the taxing authorities. 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. Any proposed adjustments by the examining agent are subject to certain rights of appeal. In the event of such government tax examination, we will be available upon request to represent you and will render additional invoices for the time and expenses incurred. A separate engagement letter may be required.

3. U.S. Filing Obligations Related to Foreign Financial Assets. As part of your filing obligations, you are required to report the maximum value of specified foreign financial assets, which include financial accounts with foreign institutions and certain other foreign non-account investment assets that exceed certain thresholds. You are responsible for informing us of all foreign assets, so we may properly advise you regarding your filing obligations.

These assets include any ownership interests you directly or indirectly hold in businesses located in a foreign country, and any assets or financial accounts located in a foreign country over which you have signature authority. Based upon the information you provide, this information will be used to calculate any applicable foreign tax credits. We will also use this data to inform you of any additional filing requirements, which may include FinCEN Form 114, Report of Foreign Bank and Financial Accounts (“FBAR”). Failure to file required forms can result in the imposition of both civil and criminal penalties, which may be significant. The FBAR is not a tax return and its preparation is not within the scope of this engagement. If you ask us to prepare the FBAR, we will confirm this representation in a separate engagement letter.

4. Foreign Filing Obligations. You are responsible for complying with the tax filing requirements of any other country. You acknowledge and agree that we have no responsibility to raise these issues with you and that foreign filing obligations are not within the scope of this engagement.

5. Fees and Billing. Our fee for these services will be based upon the amount of time required at standard billing rates plus expenses. These standard hourly rates differ based upon the experience and expertise of the firm staff. Administrative and clerical rates are $50 to $120; Accountants and Managers $100 to $220; Senior Managers and Partners $220 to $400 per hour. Rates may increase from time to time. Fees may be adjusted by us to appropriately reflect the value of the services rendered.

Depending on the scope of the engagement, we reserve the right to require a retainer before beginning work on your project. All invoices are due and payable upon presentation. You will be billed on a monthly basis for services rendered and costs incurred during the preceding month. This results in progress billings on most projects.

Interest will be charged on balances outstanding for more than 30 days at a rate of 1% per month or 12% per annum. We reserve the right to cease work on any project or not begin an additional project if billings to you or your company are outstanding for more than 45 days past the invoice date or if the information provided is not adequate to complete the work we are engaged to perform.

6. Third-party Service Providers. The firm may from time to time, and depending on the circumstances, use thirdparty service providers to assist in preparing your return, but these preparers will not make substantive decisions concerning your return. We may share your tax return information with these service providers, but remain committed to maintaining the confidentiality and security of your information. Accordingly, we maintain internal policies, procedures, and safeguards to protect the confidentiality of your personal information. In addition, we will secure confidentiality agreements with all service providers to maintain the confidentiality of your information and we will take reasonable precautions to determine that they have appropriate procedures in place to prevent the unauthorized release of your confidential information to others. In the event that we are unable to secure an appropriate confidentiality agreement, you will be asked to provide your consent prior to the sharing of your confidential information with the third-party service provider. Futhermore, the firm will remain responsible for the work provided by any such third-party service providers.

7. Termination of Services. You may terminate our services at any time by giving us notice. Johnson Goff, PLLC shall have at all times, the right to terminate our services upon written notice to that effect in the event you fail to cooperate in any reasonable request from us, or if we determine in our reasonable discretion that to continue our services would be unethical or impractical. In that event, you will be charged only for the work done and any expenses incurred up to the time such notice is received, and the unused balance of any retainer will be refunded to you.

8. Dispute Resolution. If any dispute arises between the parties hereto, the parties agree first to try in good faith to settle the dispute through non-binding mediation. We will agree on a mediator, but if we cannot, either of us may apply to a court having personal jurisdiction over the parties for appointment of a mediator. We will share the mediator’s fees and expenses equally, but otherwise will each bear our own attorneys’ fees and mediation cost. Participation in such mediation shall be a condition to either of us initiating litigation. In order to allow time for the mediation, any applicable statute of limitations shall be tolled for a period not to exceed 120 days from the date of either us first requests in writing to mediate the dispute. The information shall be confidential in all respects, as allowed or required by law, except our final settlement positions at mediation shall be admissible in litigation solely to determine the prevailing party’s identity for purposes of the award of attorneys’ fees.

If any party thereafter institutes suit or arbitration against the other party to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to all taxable and non-taxable costs, consultant and expert witness fees, and prejudgment and post-judgment reasonable attorneys’ fees incurred as a result of such action, with such amounts to be set by a court and not a jury. In the event of such suit, the parties acknowledge that they have each caused events to occur in the State of Arizona out of which this Agreement arose and thus the parties consent to exclusive jurisdiction in any court of competent jurisdiction in Maricopa County, Arizona.

9. Limitation of Damages/Liability. Our maximum liability to you arising for any reason relating to services rendered under this letter shall be limited to the amount of fees you paid for these services. In the event of a claim by a third party relating to services under this letter, you will indemnify us from all such claims, liabilities, costs and expenses, except to the extent determined to have resulted from our intentional or deliberate misconduct.

10. Record Retention and Destruction. It is our general policy to keep files, work papers, and other records relating to an engagement for seven years. However, we do not keep any of your original records, so we will return those to you upon the completion of the engagement. Upon expiration of the seven year period you agree that we shall be free to destroy our work papers in a manner consistent with our professional standards. It is your responsibility to retain and protect your records, electronic or otherwise, for possible future use, including potential examination by any government or regulatory agencies. You should retain all the documents, canceled checks, and other data that form the basis of income and deductions. These may be necessary to prove the accuracy and completeness of the returns to a taxing authority.

11. Conflict of Interest. There are times when our engagement with you may result in a real or perceived conflict with another person or entity for whom we provide services. In such instances, our engagement will be suspended until the conflict is addressed, either in the form of a signed waiver by both parties or a disengagement with one or both parties. With respect to married couples, you acknowledge that any information our firm receives from one party that may impact the other party will be made known to all parties; and for that purpose, waive the requirements of confidentiality among yourselves and the firm.

12. Disclosure. In accordance with federal law, in no case will we disclose your tax return information to any location outside the United States, to another tax return preparer outside of our firm for purposes of a second opinion, or to any other third party for any purpose other than to prepare your return without first receiving your consent.

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, your partners, or the partnership’s employees or agents 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 potentially privileged communication, you agree to provide us with written, advance authority to make that disclosure.

In the event that we receive a subpoena or summons requesting that we produce documents from this engagement or testify about the engagement, we will notify you prior to responding to it. 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 action does not result in a judicial order protecting us from supplying requested information, we may construe that inaction or failure as consent to comply with the request. In the event you direct us not to make the disclosure, you agree to hold us harmless from any expense 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.

13. Third Party Proceeding. Unless expressly provided for, our Services do not include giving testimony or appearing or participating in discovery proceedings, in administrative hearings, in court, or in other legal or regulatory inquiries or proceedings. Moreover, our costs, expenses and time spent in legal and regulatory matters or proceedings to which we are not a party and the Services are not at issue, such as subpoenas, testimony, bankruptcy filings or proceedings, consultation involving private litigation, arbitration, government or industry regulation inquiries, whether made at your request, the request of a third party or by subpoena or equivalent, will be billed to you separately at our then current rates. The terms of this paragraph shall also apply to any third party proceedings that arise after the termination of this Agreement.

14. Privacy. Johnson Goff, PLLC recognizes that protecting the privacy and security of the personal information we obtain about our clients is an important responsibility. As your CPA we collect information provided by you from your tax organizer, worksheets, financial statements, documents and discussions, as well as information that we develop as part of the engagement. Besides using your information to perform our defined engagement, occasionally information about you may be used to offer you other services we provide. As your CPA, we are required to keep all information about our engagement confidential. As such, we will not disclose any information about you unless we have your written approval or are required/permitted by law. This applies even if you are no longer a client. As your CPA, we are committed to safekeeping of your confidential information and we maintain physical, electronic and procedural safeguards to protect your information. Should our policy about obtaining and disclosing information change, we will notify you in writing before we implement such change.

15. Use of Firm’s Name. You agree that you will not use our firm’s name or the name of an employee of the firm in a communication containing a financial presentation without the written permission of our firm. If you do use our firm name or the name of an employee of the firm in a communication containing a financial presentation, you agree to include an “accountants report” or a “disclaimer” on the financial presentations that we so specify. Further, you agree to provide us with printers’ proofs or masters of any document that contains our firm name or the name of an employee of the firm and a financial presentation for our review and approval before printing of the document. You also agree to provide us with a copy of the final reproduced material that contains both our firm’s name or the name of an employee of the firm and financial presentation(s) for our approval before it is distributed.