TERMS OF ENGAGEMENT
(NON-ATTEST ENGAGEMENTS ONLY)
We appreciate the opportunity to provide you with accounting, tax and advisory services. Our services typically include the following:
Tax planning and preparation of federal, state and local tax returns.
Perform the necessary accounting (i.e., bookkeeping) for preparation of the income tax returns.
CFO and Controllership advisory services.
Tax Services
It is your responsibility to provide all the information required for the preparation of complete and accurate returns. You should retain all the documents, canceled checks and other data that form the basis of income and deductions. These may be necessary information to prove the accuracy and completeness of the returns to a taxing authority. You have the final responsibility for the income tax returns, therefore, you should review them carefully before you sign them.
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. 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. The returns will be prepared solely from information provided to us without verification by us. We will use professional judgment in resolving questions where the tax law is unclear, or where there may be conflicts between the taxing authorities’ interpretation of the law and other supportable positions. Unless otherwise instructed by you, we will resolve such questions in your favor whenever possible.
Your returns may be selected for review by the taxing authorities. 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. When a tax examination or tax notice results in additional taxes due, interest and or penalty, charges resulting therefrom are the responsibility of the taxpayer. Liggett, Melzer & Joshi, CPA’s P.C. is responsible for penalties resulting from clerical error. 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.
The Internal Revenue Code and regulations impose preparation and disclosure standards with non-compliance 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 concluded 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. 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. You 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.
Pursuant to Circular 230, we are required to advise you that any federal tax advice contained herein or in any communication resulting from this engagement is not intended or written to be used, and cannot be used, by the addressee or any taxpayer for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or for promoting, marketing, or recommending to another party any plan or arrangement addressed in the communication.
Any difference between the amount of tax computed for purposes of an extension and final tax return may result in inadequate estimated tax payments and penalties and interest applied to the balance due. Any such penalties and interest are the responsibility of the taxpayer. It is the consensus of tax preparers that there is no way to ensure there will be no underpayment penalties for complex tax returns other than deliberate overpayment.
Method of Communications
In the interest of facilitating our services to you, we may send data over the Internet, temporarily store electronic data via computer software applications hosted remotely on the Internet or utilize cloud-based storage. Your confidential electronic data may be transmitted or stored using these methods. In using these data communication and storage methods, our firm employs measures designed to maintain data security. We use reasonable efforts to keep such communications and electronic data secure in accordance with our obligations under applicable laws, regulations, and professional standards.
You recognize and accept that we have no control over the unauthorized interception or breach of any communications or electronic data once it has been transmitted or if it has been subject to unauthorized access while stored, notwithstanding all reasonable security measures employed by us. You consent to our use of these electronic devices and applications during this engagement.
CFO, Controllership and Accounting Services
Liggett, Melzer & Joshi CPAs P.C. may provide CFO, Controllership and Accounting services. Accordingly, while we may from time to time suggest options which may be available to you, and further give our professional evaluation of these options, the ultimate decision as to which, if any, of these options to implement rests with the you (our client), its management and board of directors. Liggett, Melzer & Joshi CPAs P.C. and its employees will not make any management decisions for the you and will not be responsible for communicating information concerning the you to the public, your shareholders or others.
Third Party Service Providers or Subcontractors
In the interest of enhancing our availability to meet your professional service needs while maintaining service quality and timeliness, we may use a third-party service provider to assist us in the provision of services to you, which may include receipt of your confidential information. This provider has established procedures and controls designed to protect client confidentiality and maintain data security. As the paid provider of professional services, our firm remains responsible for exercising reasonable care in providing such services, and our work product will be subjected to our firm’s customary quality control procedures.
By accepting the terms and conditions of our engagement, you are providing your consent and authorization to disclose your confidential information to a third-party service provider, if such disclosure is necessary to deliver professional service or provide support services to our firm.
Disclaimer of Legal and Investment Advice
Our services under this Agreement do not constitute legal or investment advice unless specifically agreed to in the Engagement Objective and Scope section of this Agreement. We recommend that you retain legal counsel and investment advisors to provide such advice.
Referrals
In the course of providing services to you, you may request referrals to attorneys, brokers, investment advisors or other professionals. We may identify a professional or professionals for your consideration. However, you are responsible for evaluating, selecting, and retaining any professional and determining if the professional can meet your needs. You agree that we have no responsibility for and will not oversee the activities of any professional to whom we refer you
Compensation
Fees for our services will be charged according to our standard fee schedule, which are based on the complexity of your accounting and tax needs. Please contact our office if you have not received, and would like a copy of, our current fee schedule.
Our fees for accounting and tax services are be based upon standard hourly rates, which range from $150 (USD) for staff accountants to $350 (USD) per hour for partners, plus any significant out-of-pocket costs. Our invoices will be due upon presentation. This engagement includes only those services specifically described in this letter. Costs and time spent on legal matters or proceedings arising from our engagement, such as subpoenas, testimony, or consultation involving private litigation, arbitration or government regulatory inquiries under the Private Securities Litigation Reform Act of 1995, will be billed to you separately. Billings are delinquent if not paid within thirty (30) days of the invoice date. If billings are past due in excess of sixty (60) days, we will stop all work until your account is brought current or withdraw from this engagement.
Dispute Resolution
If any dispute, controversy or claim arises in connection with the performance or breach of this agreement and cannot be resolved by facilitated negotiations (or the parties agree to waive that process) then such dispute, controversy or claim
shall be settled by arbitration administered by the American Arbitration Association under its then current Arbitration Rules for Professional Accounting and Related Disputes (the “Rules”) of the American Arbitration Association Dispute Resolution (‘AAA”). There shall be no pre-hearing discovery other than as may be ordered by the arbitrator. Judgment
on the award rendered by the arbitrator may be entered in any court of competent jurisdiction. The arbitration shall be in the City of New York, State of New York. The arbitrator shall have no authority to award nonmonetary or equitable relief, and any monetary award shall not include punitive damages. The confidentiality provisions applicable to facilitated negotiation shall also apply to arbitration. All reasonable costs of both parties, as determined by the arbitrators, including but not limited to: (1) the costs including reasonable attorney’s fees of the arbitration, (2) the fees and expenses of the AAA and arbitrator, and (3) the costs, including reasonable attorneys’ fees, necessary to confirm the award in court shall be borne entirely by the non—prevailing party (to be designated by the arbitrator in the award) and may not be allocated between the parties by the arbitrator.
You agree that you will indemnify, and hold us harmless against, any actions, claims, liabilities or judgments for actual and/or punitive damages to any third party arising from or resulting from any knowing misrepresentation, willful misconduct or fraudulent behavior by you or any of your personnel. You further agree that you will not seek recovery for, and will hold us harmless against, any claim for actual and/or punitive damages suffered by you that arises from or results from any knowing misrepresentation, willful misconduct or fraudulent behavior by you or any of your personnel. You also agree that in no event shall you be entitled to recover punitive damages in any action, arbitration or other claim against us. In recognition of the relative risks and benefits of this agreement to both the client and the accounting firm, the client agrees, to the fullest extent permitted by law, to limit the liability of the accounting firm to the client for any and all claims, losses, costs, and damages of any nature whatsoever, so that the total aggregate liability of the accounting firm to the client shall not exceed one (1) times the accounting firm’s total fee for services rendered under this agreement. The client and the accounting firm intend and agree that this limitation apply to any and all liability or cause of action against the accounting firm, however alleged or arising, unless otherwise prohibited by law.
The receipt of accounting data and supporting documentation for us to providing our accounting, tax and advisory services shall be evidence of your acceptance of the terms of engagement set forth herein.
Very truly yours,
Liggett, Melzer & Joshi CPAs P.C