MASTER SERVICE AGREEMENT FOR TAX SERVICES
We are pleased that you have chosen to engage MBE CPAs, LLP (we, our, or us) to provide certain tax services to you and any affiliated persons described under the Parties section below (collectively referred to as you or your). We believe it is important for you to have an understanding of the nature and scope of our tax services so that our services can meet or exceed your expectations. Please take the time to review this Master Services Agreement (“MSA”) and the related items described below.
For the purposes of this MSA, our clients will be and the term “you” will refer to:
• For Individual Clients: you, your spouse if filing jointly, your children and other dependents, any trusts for which you act as trustee and any investment partnership or limited liability company if all of the ownership interests are owned by the foregoing persons;
• For Business Clients: the primary business and any subsidiaries or controlled affiliates.
Our client(s) with respect to this MSA and any executed Statement of Work will be those individuals and/entities listed under the Client Acknowledgement section of this MSA. Neither this MSA nor any Statement of Work will create any client relationship between us and any natural person or entity not specifically identified in this MSA or executed Statement of Work.
STATEMENTS OF WORK
All tax services to be performed by us must be described in a Statement of Work. Each Statement of Work will provide details on the nature of the work and any expected deliverable. Our services will be limited to the services specifically described in that Statement of Work. Our agreement to perform services under any particular Statement of Work does not obligate us to perform any other services under any other Statement of Work.
Statements of Work are subject to the terms and conditions outlined in this MSA. Statements of Work will not typically require client signature unless they contain terms and conditions that supersede or conflict with material provisions of the MSA, or if new significant terms are deemed necessary to cover the scope and limits of the services covered by the Statement of Work. We may provide you with a Statement of Work either in paper or in electronic format.
As our tax services will cover many deliverables during the course of our relationship, each individual engagement concludes upon our delivery of the resulting tax return or specified work product identified in the respective Statements of Work.
Our firm will exercise due professional care and judgment in rendering the tax services specified under the terms of this Master Service Agreement and executed Statements of Work in accordance with applicable law and professional standards.
Our firm has developed certain customary practices that we will employ in delivering tax services to you, referred to as our Standards of Service. These Standards of Service provide additional information regarding the nature and scope of the tax services we may provide to you. These Standards of Services are available for your review electronically on our website, Click here for Individual Taxpayers or Click here for Business Taxpayers; if you would like to receive a paper copy of the applicable Standards of Services, please contact us.
You are responsible for making all requested financial and other records and related information available to us on a timely basis; agreeing that all material information will be disclosed to us; and ensuring that we will have the full cooperation of relevant personnel during the course of any engagement to assist with the fulfillment of the services stated in this MSA and executed Statements of Work.
By your signature below, you understand and agree that management is responsible for the accuracy and completeness of the records, documents, explanations, and other information provided to us for purposes of the tax services rendered under the terms of this MSA and executed Statements of Work. You are also responsible for informing us of any updates related to information provided, changes in circumstances, or in your wishes related to the provision of services under this MSA. You have the final responsibility for the tax returns prepared by our firm. Therefore, you should review them carefully before you sign the e-file authorization forms if applicable, or before you sign and submit your income tax returns directly to the appropriate taxing authorities. You agree that our firm is not responsible for a taxing authority’s disallowance of deductions or inadequately supported documentation nor for resulting taxes, penalties, and interest.
TAX RETURN EXTENSIONS
For administrative processing purposes, it is our policy to automatically prepare extensions for you, regardless of the anticipated completion date of your tax returns. You have the right to opt-out of having our firm automatically prepare extensions and we will ask that you indicate any decision to opt-out below. Please note that an extension only extends the time for filing a return; you will be required to pay the estimated amount of any taxes due by the original due date of the return in order to avoid significant tax penalties. We assume no liability for late filing or late payment penalties.
Please indicate below if you would like to “opt-out” of having our firm prepare automatic tax return extensions on your behalf:
We wish to “opt-out” of the Firm preparing automatic tax extensions, in accordance with this Master Service Agreement. We do not want the Firm to prepare tax extensions on our behalf.
FOREIGN REPORTING REQUIREMENTS
If you and/or your entity have a financial interest in, or signature authority over, any foreign accounts, you may be subject to certain filing requirements with the U.S. Department of the Treasury, in addition to the IRS. Filing requirements may also apply to taxpayers that have direct or indirect control over a foreign or domestic entity with foreign financial accounts, even if the taxpayer does not have a foreign account(s). By executing this MSA, you agree to provide us with complete and accurate information regarding any foreign accounts that you and/or your entity may have had a direct or indirect interest in, or signature authority over, during any respective tax year. Unless a Statement of Work is executed for preparing the applicable foreign reporting forms, our firm assumes no responsibility for such services.
The foreign reporting requirements are very complex, so if you have any questions regarding the application of the U.S. Department of the Treasury and/or the IRS reporting requirements to your foreign interests or activities, please ask our Firm for advice in that regard. Failure to disclose the required information to the U.S. Department of the Treasury and the IRS may result in substantial civil and/or criminal penalties. We assume no liability for penalties associated with the failure to file or untimely filing of any of these forms.
ELECTRONIC FILING OF TAX RETURNS
Federal and state tax laws mandate the electronic filing of certain tax returns and requests for extension. In some cases, a taxpayer may elect to file a tax return in paper format, and in other cases, an election to opt-out of electronic filing is not available. Occasionally, technical limitations prevent the electronic filing of a particular return.
We will use our best efforts to electronically file your tax returns. Prior to electronic filing, we will provide you with a copy of your return for your review and approval. Federal and state laws require that we obtain your written authorization prior to electronically filing a return, so it is critical that you sign and return the authorization form to permit electronic filing by the return’s due date.
Finally, please note that although our firm will use our best efforts to ensure that your returns are successfully transmitted to the appropriate taxing authorities, we will not be financially responsible for electronic transmission or other errors arising after your returns have been successfully submitted from our office.
If we cannot electronically file any tax return, whether due to technical limitations or for any other reason, we will provide you with those returns for filing in paper format. If you would like to opt-out of electronic filing and file your returns in paper format, you must contact us immediately so that we can determine whether such an opt-out is permissible and provide you with any required documentation. If any return is provided to you in paper format for filing, it is critical that you sign, date, and mail that return by its due date.
PRICING FOR SERVICES
Except to the extent provided by a particular Statement of Work, our fees will be based on the time required for work performed, the complexity of any technical issues addressed, the need to confirm information or to perform accounting work as a precondition to our services, and the impact of receipt of necessary information less than thirty (30) days prior to the due date of any tax return filings. You must also pay other expenses (e.g. postage, shipping, travel, etc.) relating to the services at our normal rates.
Our fees and expenses will be billed on a regular basis unless otherwise provided by a particular Statement of Work. Each invoice is payable upon receipt of the invoice. We will assess a 1.5% monthly late fee on all invoices unpaid after 30 days of the invoice date. In accordance with our firm policies, work may be suspended if your account becomes 60 days or more overdue and will not be resumed until your account is paid in full. We will not perform any work on your current year's services until all of your prior invoices are paid in full or a sufficient payment plan is in place.
Client acknowledges and agrees that we are not required to continue work in the event of Client’s failure to pay on a timely basis for services rendered as required by this MSA. If you fail to pay any invoice when due, we reserve the right (as permitted by applicable law and professional standards) to withhold any tax return, tax advice, other deliverables, document, or file until your account is paid in full or you have made other payment arrangements satisfactory to us. Client further acknowledges and agrees that in the event Firm stops work or withdraws from this engagement as a result of Client’s failure to pay on a timely basis for services rendered as required by this MSA, Firm shall not be liable for any damages that occur as a result of Firm ceasing to render services.
In addition, in the event our firm or any of its employees or agents is called as a witness or requested to provide any information whether oral, written, or electronic in any judicial, quasi-judicial, or administrative hearing or trial regarding information or communications that you have provided to this firm, or any documents and work papers prepared by us in accordance with the terms of this agreement, you agree to pay any and all reasonable expenses, including fees and costs for our time at the rates then in effect, as well as any legal or other fees that we incur as a result of such appearance or production of documents.
During the course of our relationship, we may be available to provide you with business and tax advice, but we are not obligated to do so unless you specifically request us to perform a specific service and we execute a Statement of Work for such services. It is our policy to put all advice on which a client intends to rely in writing. We believe this is necessary to avoid any confusion and make clear the specific nature of our advice. You should not rely on any unwritten advice from our firm.
LIMITATIONS OF OUR SERVICES
The work performed in accordance with this MSA and incorporated Statements of Work will be done on an as-needed basis, which limits our involvement and knowledge. We will assume that all persons and entities covered by this MSA and applicable Statements of Work are properly and timely discharging any and all other tax reporting obligations for which it is responsible.
Therefore, our services cannot be relied upon to disclose errors, fraud, or other illegal acts that may exist, nor will we be responsible for the impact on our services of incomplete, missing, or withheld information, or mistaken or fraudulent data provided from any source or sources. However, we will inform you of any material errors, fraudulent financial reporting, or misappropriation of assets that come to our attention.
Our services under this MSA and any Statements of Work do not constitute legal or investment advice. We recommend that you retain competent legal counsel and investment advisers.
As this MSA and any Statements of Work are limited to tax services, any other services including valuation services would be covered under a separate agreement.
We may from time to time and depending on the circumstances and nature of the services we are providing, share your confidential information with third-party service providers, some of whom may be cloud-based, but we 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 terms with all service providers to maintain the confidentiality of your information and 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 appropriate confidentiality terms with a third-party service provider, you will be asked to provide your consent prior to the sharing of your confidential information with the third-party service provider. Although we will use our best efforts to make the sharing of your information with such third parties secure from unauthorized access, no completely secure system for electronic data transfer exists. As such, by your signature below, you understand that the firm makes no warranty, expressed or implied, on the security of electronic data transfers.
We will maintain the confidentiality of your information in accordance with our professional standards. During the course of our relationship, you may disclose personal data to us in order that we may provide our specified services to you as outlined in this Master Service Agreement and executed Statements of Work. As such, we are responsible for complying with applicable professional standards as well as data and privacy protection laws with respect to any personal data we process in providing our services to you, and our firm takes reasonable measures to comply with such laws and regulations. By accepting this Master Service Agreement, you consent to the transfer and processing of personal data as may be necessary for the agreed-upon services. To further protect your confidential information, you agree that you will not disclose any confidential information to us except as we request or as necessary for us to provide our services.
Federal law has extended the attorney-client privilege to some, but not all, communications between a client and the client’s CPA. The privilege applies only to non-criminal tax matters that are before the IRS or brought by or against the U.S. government in a federal court. The communications must be made in connection with tax advice. Communications solely concerning the preparation of a tax return will not be privileged.
In addition, the confidentiality privilege can be inadvertently waived if the contents of any privileged communication are discussed with a third party, such as a lending institution, a friend, or a business associate. We recommend that you contact us before releasing any privileged information to a third party. If you are a corporation, you need to be especially careful about privileged communications. If a communication is made in the presence of a corporate employee who is not authorized to act or speak for the corporation in relation to the communication’s subject matter, then the communication will be deemed to be made in the presence of a third party and any privilege will be waived.
If we are asked to disclose any privileged communication, unless we are required to disclose the communication by law, we will not provide such disclosure until you have had an opportunity to argue that the communication is privileged. You agree to pay any and all reasonable expenses that we incur, including legal fees, that are a result of attempts to protect any communication as privileged.
This Master Services Agreement may be terminated at any time by either party with thirty (30) days written notice to the other. Client shall pay Firm for all Services rendered and expenses incurred as of the date of termination and shall reimburse Firm for all reasonable costs associated with any termination. We reserve the right to terminate services and withdraw from the engagement in the event that you are unable to timely provide us with requested records, documentation, and other information that we deem necessary in order to complete the contemplated tax services. Further, we reserve the right to deem this MSA or any Statement of Work or requirement to perform any tax services as being terminated, without notice, after the passing of 365 consecutive days during which we perform no services for you.
Commencing upon notice of termination (in whole or in part) of this agreement, Firm will provide, at the expense of the Client, reasonable transition assistance as requested by the Client to facilitate the orderly transfer of any records, information, and/or documents as may be required. The transition services shall be provided in accordance with the standard terms set forth in this agreement, and the fees shall be the standards rates then in effect at the time of the transition. Client acknowledges and agrees that Firm will require a reasonable period of time, and no less than 15 business days, for the orderly transfer of any records, information, and/or documents that may be required as part of the transition services.
In the course of preparing tax returns, we may prepare schedules or perform accounting work as we deem necessary to prepare your returns in accordance with applicable law and professional standards. These schedules and accounting work are solely for the support of our tax return services and may not be appropriate for financial statements or other purposes.
If at any time you engage our firm to provide you with audit, review, compilation, or other services, such financial reporting services will be covered under a separate agreement.
Because of the importance of oral and written client representations to the effective performance of our services, you release and indemnify our firm and its personnel from any and all claims, liabilities, costs, and expenses attributable to any misrepresentation by you and your representatives.
LIMITATION OF LIABILITY
In recognition of the relative risks and benefits of this to you and our firm, we have agreed on the fair allocation of risk between us. As such, all parties agree, to the fullest extent permitted by law, to limit the liability of our firm to you 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 three times the fees paid to our firm for services rendered under the applicable Statement of Work. Notwithstanding the foregoing, you will not be responsible to the extent that it is finally determined by a court of competent jurisdiction that such losses, etc. were caused by the gross negligence or wilful misconduct of our firm.
OTHER ADMINISTRATIVE MATTERS
In connection with this engagement, we may communicate with you or others via email transmission. We take reasonable measures to secure your confidential information in our email transmissions, including password-protecting tax returns and other confidential documents. However, as emails can be intercepted and read, disclosed, or otherwise used or communicated by an unintended third party, or may not be delivered to each of the parties to whom they are directed and only to such parties, we cannot guarantee or warrant that emails from us will be properly delivered and read-only by the addressee. Therefore, we specifically disclaim and waive any liability or responsibility whatsoever for the interception or unintentional disclosure or communication of email transmissions, or for the unauthorized use or failed delivery of emails transmitted by us in connection with the performance of this engagement. In that regard, you agree that we shall have no liability for any loss or damage to any person or entity resulting from the use of email transmissions, including any consequential, incidental, direct, indirect, or special damages, such as loss of sales or anticipated profits, or disclosure or communication of confidential or proprietary information.
It is our policy to keep records related to this engagement for seven years. However, we do not keep any original client records, so we will return those to you at the completion of the services rendered under this engagement. It is your responsibility to retain and protect your records (which includes any work product we provide to you as well as any records that we return) for possible future use, including potential examination by any government or regulatory agencies. We do not accept responsibility for hosting client information; therefore, you have the sole responsibility for ensuring you retain and maintain in your possession all your financial and non-financial information, data, and records.
By your signature below, you acknowledge and agree that upon the expiration of the seven-year period, we shall be free to destroy our records related to this engagement.
Clients of MBE CPAs, LLP, its subsidiaries, or affiliated companies, may not solicit the services of our employees unless directly contracted through us. You agree that if you should hire any employee of MBE CPAs, LLP, its subsidiaries, or affiliated companies during the period of engagement, or for 6 months thereafter, we will be damaged. Accordingly, you agree to pay us the greater of, 150% of said employee’s salary at termination, or 150% of said employee’s starting salary with you, as liquidated damages.
If any dispute arises among the parties hereto, the parties agree to first try in good faith to settle the dispute by mediation administered by the American Arbitration Association under its applicable rules for resolving professional accounting and related services disputes before resorting to litigation. The costs of any mediation proceeding shall be shared equally by all parties.
Client and accountant both agree that any dispute over fees charged by the accountant to the client will be submitted for resolution by arbitration in accordance with the applicable rules for resolving professional accounting and related services disputes of the American Arbitration Association, except that under all circumstances the arbitrator must follow the laws of Wisconsin. Such arbitration shall be binding and final. IN AGREEING TO ARBITRATION, WE BOTH ACKNOWLEDGE THAT IN THE EVENT OF A DISPUTE OVER FEES CHARGED BY THE ACCOUNTANT, EACH OF US IS GIVING UP THE RIGHT TO HAVE THE DISPUTE DECIDED IN A COURT OF LAW BEFORE A JUDGE OR JURY AND INSTEAD WE ARE ACCEPTING THE USE OF ARBITRATION FOR RESOLUTION. The prevailing party shall be entitled to an award of reasonable attorneys’ fees and costs incurred in connection with the arbitration of the dispute in an amount to be determined by the arbitrator.
All parties acknowledge that this MSA shall not be deemed invalid or void if any part or clause hereof shall be deemed indefinite or invalid. Should there be a judicial determination of the invalidity of one or more of the provisions hereof, said judicial determination shall have no force and effect on the validity of the remaining provisions of this Agreement.
We appreciate the opportunity to be of service to you and believe this MSA correctly expresses the significant terms of our engagement. If you have any questions, please do not hesitate to contact us. If you agree with the terms of our engagement as described in this MSA, please sign the enclosed copy and return it to us. This MSA will continue in effect until such time that a revised Master Service Agreement is executed, or until the MSA is canceled by either party.
STATEMENT OF WORK: INCOME TAX PREPARATION
MBE CPAs LLP (Firm, we, our or us)) and Client (you, your) hereby agree to the terms of this Statement of Work, which has been prepared in conjunction with a Master Service Agreement for Tax Services (“MSA”) between Firm and Client.
Defined terms in this Statement of Work shall have the same meaning as those terms in the MSA.
ENGAGEMENT SCOPE / DELIVERABLES
We will prepare your federal and state income tax returns for the year beginning in 2019. Our tax services will be performed in accordance with the terms specified in the MSA and any additional terms noted below.
Tax return preparation services do not constitute accounting or auditing services. We will rely on the information you provide to us as being complete and accurate. We will not audit or otherwise verify this data, although we may ask you to clarify some of the information. Therefore, our services cannot be relied upon to disclose errors, fraud, or other illegal acts that may exist, nor will we be responsible for the impact on our services of incomplete, missing, or withheld information, or mistaken or fraudulent data provided from any source or sources. However, we will inform you of any material errors, fraudulent financial reporting, or misappropriation of assets that come to our attention.
Please note that the Internal Revenue Service (IRS) considers virtual currency (e.g., Bitcoin) as property for U.S. federal tax purposes. As such, any transactions in, or transactions that use, virtual currency are subject to the same general tax principles that apply to other property transactions. If you had virtual currency activity during the tax year, you may be subject to tax consequences associated with such transactions and may have additional foreign reporting obligations.
You agree to provide us with complete and accurate information regarding any transactions in, or transactions that have used, virtual currency during the applicable tax year. Please ask us for advice if you have any questions regarding the type of records required for virtual currency transactions.
We will use our professional judgment in preparing your tax returns based on the information you provide to us given the tax law guidance as currently promulgated. Subsequent developments issued by the applicable tax authorities may affect the information we have previously provided, and these effects may be material. Whenever we are aware that 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 share our knowledge and understanding of the possible positions that may be taken on your return. In accordance with our professional standards, we will follow whatever position you request, as long as it is consistent with the codes, regulations, and interpretations that have been promulgated.
If a taxing authority should later contest the position taken, there may be an assessment of additional tax, interest, and penalties. We assume no liability for any such assessment of additional tax, penalties, or interest. In the event, however, that you ask us to take a tax position that in our professional judgment will not meet the applicable laws and standards as promulgated, we reserve the right to stop work and shall not be liable for any damages that occur as a result of ceasing to render services.
If you are a Partnership or LLC, please note that the Bipartisan Budget Act of 2015 made significant changes to the IRS partnership audit rules effective for partnership tax years beginning in 2018, although there are provisions to allow certain partnerships the ability to elect out of the new rules. If you have any questions regarding the application of the IRS partnership audit rules, please ask us for advice.
Unless otherwise stipulated under a Statement of Work, Client understands that all individual partners, S-corporation shareholders, and LLC members are responsible for submitting their individual K-1s to their own tax preparers for inclusion with their individual tax returns.
Our firm might, as the need arises, contact taxing authorities about your account to verify the information. Any information so acquired will only be utilized in the preparation of the tax returns.
Our work is limited to the preparation of state and federal income tax returns and does not include consultation on other taxation issues unless specified in a Statement of Work.
You are confirming that you will furnish us with all the information required for preparing complete and accurate returns.
Your responsibility includes, but is not limited to, providing us with the information necessary to identify (1) all states and foreign countries in which you “do business” or derive income (directly or indirectly) and (2) the extent of business operations in each relevant state and/or country. We will not audit or verify the data you submit, although we may ask you to clarify it or furnish us with additional data. You should retain all the documents, books, and records that form the basis of your income and deductions. The documents may be necessary to prove the accuracy and completeness of the returns to a taxing authority. If you have any questions as to the type of records required, please ask us for advice in that regard.
The law provides for a penalty to be imposed where a taxpayer makes a substantial understatement of their tax liability. Taxpayers may seek to avoid all or part of the penalty by showing (1) that they acted in good faith and there was reasonable cause for the understatement, (2) that the understatement was based on substantial authority, or (3) there was a reasonable basis for the position taken on the return and the relevant facts affecting the item’s tax treatment were adequately disclosed on the return. You agree to advise us if you wish disclosure to be made in your returns or if you desire us to identify or perform further research with respect to any material tax issues for the purpose of ascertaining whether, in our opinion, there is “substantial authority” for the position proposed to be taken on such issue in your returns.
By accepting this Statement of Work, you understand and agree that you are responsible for the accuracy and completeness of the records, documents, explanations, and other information provided to us for purposes of this engagement. You have the final responsibility for the income tax returns; therefore, you should review them carefully before you sign the e-file authorization forms, or sign and submit your income tax returns directly to the appropriate taxing authorities.
We appreciate the opportunity to be of service to you and believe this Statement of Work, in conjunction with the Master Services Agreement, accurately summarizes our agreement. If you have any questions, please let us know. You will be deemed to have accepted this Statement of Work unless you notify us in writing of any objections within 15 days following your receipt of the Statement of Work
By taking any of the following actions, you are affirming to MBE CPAs, LLP your understanding of, and agreement to, the terms and conditions of this Statement of Work in conjunction with the Master Services Agreement: providing your income tax information to us for use in the preparation of your income tax returns; the submission of the tax returns we have prepared for you to the taxing authorities; or the payment of our return preparation fees.
MBE CPAs, LLP