Thank you for your instructions to attend to your taxation requirements. This letter sets out our terms of engagement and scope of the work to be performed by us within that engagement. Please read it carefully and contact this office immediately if you do not understand, or wish to discuss any aspect of the terms of this engagement.
With effect from 1 March 2010, a new regime for the regulation of tax agents has taken effect under the Tax Agent Services Act 2009 and accompanying legislation (TASA). The new regime has implications for registered tax agents and also for their clients.
An important feature of TASA is the provision of a “safe harbour” protection from penalties in certain circumstances for taxpayers who engage registered tax agents.
To obtain the benefits of “safe harbour” protection, the legislation requires the taxpayer to provide the registered tax agent with “all relevant taxation information” to enable accurate statements to be provided to the Australian Taxation office. This requirement may be important to both parties in identifying and understanding the purpose and scope of the engagement as set out below and may also affect other matters discussed below.
You will find further discussion on the “safe harbour” protections on the Australian Tax Office website and the Tax Practitioners Board and type in the search window “safe harbour”.
Purpose and Scope of Engagement
Our engagement is to prepare and lodge your annual income tax return (s). You engage us on the terms set out in this letter and are bound by those terms. As agreed, our services will be provided to you on a fee for service basis. This letter relates only to the abovementioned service and details the basis and terms of this engagement. Work that is performed or disbursements that are incurred which are outside the scope of our engagement will be the subject of additional charge.
Basis of Engagement
Our engagement is to assist with the preparation and lodgement of the taxation returns for yourself and your entities. If at any time during the engagement and before tax returns are processed if either party (tax agent or client) is wishing to end the engagement for any reason whatsoever, that will be considered acceptable.
Ownership of Documents
The tax returns which we are specifically engaged to prepare, together with any original documents given to us by you, shall be your property. Any other documents brought into existence by us, including general working papers, the general lodged and draft documents, will remain our property at all times. Draft tax returns will not be provided to the client if the engagement is cancelled by either party before completion of the job, completed tax returns will only be provided once to the client.
The scope of our engagement is the preparation and lodgement of the tax returns detailed above. Our agreed fee applies only to services and advice provided within the scope of our engagement. Any additional services or advice that you request are outside the scope of the engagement and not included in this agreed fee. Please note in particular any correspondence from the Australian Taxation Office that does not relate to initial assessments or original payment notices will be charged as additional services.
Income Tax Returns
This firm has been engaged to prepare and lodge income tax returns for you. In addition to the basic financial information required to complete these tax returns, it is expected that the source documentation will be available to allow this firm to analyse the income tax implications of any transaction if we request to see it. Whilst we will not as a matter of course be looking at these documents, the ATO will expect you (and you are required) to have them available before any claim is made in your income tax return. We may in some circumstances also request to see source documents if a tax issue is particularly contentious.
It is also expected that, in respect of individual income tax returns, each person will comply with the substantiation provisions of the income tax assessment act.
We will specifically advise as to the requirements of the substantiation provisions relating to your income tax returns and of the necessity to obtain acceptable receipts as specifically required by the legislation. We will not, however, be checking that the requirements of the substantiation provisions have been satisfied.
This specifically means that we will not be reviewing your log book or any calculations or information you provide us, for example a rental property schedule either prepared by you on spreadsheet or by a property manager. If you require assistance in completing a log book or preparing any calculations or you would like us to review such work please discuss this with us. This will entail work which is outside the scope of our engagement and will be charged as additional services.
The fee for this services does not cover any inquiries or investigations conducted by the Australian Taxation Office. Substantial penalties apply for an incorrectly prepared income tax return. If you have any queries in respect to this, please contact our office for assistance.
Confirmation of Engagement
Obviously, there are many issues to consider in this engagement and we ask that you consider all aspects of this letter to ensure that you are satisfied with the scope of our engagement.
Please contact us if you have any queries about this letter. Once you are satisfied with the terms of our engagement, would you please sign and date both copies of this letter in the places indicated.
We thank you for the opportunity to provide accounting and taxation services to you and your business and we look forward to developing a close accounting relationship with you for many years to come.
Agreement with terms of engagement
I/We hereby agree to these terms of the engagement and appoint Fine Line Accounting as Tax Agent as set out in this letter of engagement.
Date ________________ this day of
If our office does not receive a signed copy of this engagement within seven days of receipt by you it will be considered that you have accepted the terms of engagement outlined in this letter.