Trust & Estate Service Agreement

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    Dear Trustee:
    We appreciate the opportunity to work with you. This letter is to specify the terms of our engagement to provide tax services to you, clarify the nature and extent of the services we will provide, and to confirm an understanding of our mutual responsibilities.
    We will prepare the Federal Form 1041 and Wisconsin and/or any other state fiduciary income tax returns for the above-mentioned trust for the year ending, from the information that you furnish to us.
    In December 2017, the President signed into law the Tax Cuts and Jobs Act (“Tax Act” or “Act”) which introduces the most significant changes to the U.S. tax system since 1986. With a few exceptions, the provisions are generally effective starting in the 2018 tax year. As such, the federal and state fiduciary income tax returns beginning with the 2018 tax year may look substantially different as compared to prior years. If you have any questions regarding the application of the Tax Act regulations, please ask us for advice in that regard.
    It is your responsibility to provide all the information required for the preparation of complete and accurate returns. You represent that the information you provide will be accurate and complete to the best of your knowledge. This includes, but is not limited to, providing us with the information necessary to identify (1) all states and foreign countries in which the trust or estate “does business” or derives income (directly or indirectly), and (2) the extent of business operations in each relevant state and/or country. We will not audit or otherwise verify the information provided, although we may ask for clarification if the information appears to be incorrect, inconsistent, or incomplete. Likewise, we do not warrant the accuracy of any valuation of the appropriateness of the values used in the preparation of the tax returns. Our work in connection with the preparation of your tax returns does not include any procedures designed to discover errors or other irregularities, should any exist. We are not preparing any returns other than those listed above or giving any tax planning services.
    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 there was virtual currency activity during the 2019 tax year, there may be tax consequences associated with such transactions, and there may be additional foreign reporting obligations.
    By your signature below, you are confirming that you will furnish us with all the information required for the preparation of the returns and that unless we are otherwise advised, the related values are supported by the necessary records required under the Internal Revenue Code. If you have any questions as to the type of records required, please ask us for advice in that regard.
    You should retain all of the documents, cancelled checks and other data that form the basis of the amounts reported on the tax return. These may be necessary to prove the accuracy and completeness of the returns to a taxing authority.
    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 returns. Given the magnitude of the changes the Tax Act contains, as well as some new concepts introduced in the law, additional stated guidance from the IRS, and possibly from Congress in the form of technical corrections, may be forthcoming. We will use our professional judgment and expertise to assist you given the Tax Act 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 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 share our knowledge and understanding of the possible positions that may be taken on your returns. We will adopt whatever position you request on your returns so long as it is consistent with our professional standards and ethics.
    If you desire a legal opinion before choosing among alternative tax positions, legal counsel should be separately retained for this purpose. We will work with you and your chosen legal counsel to the best of our abilities in giving you whatever information we have that may help you in your decision. You have the final responsibility for positions taken on the returns. If a taxing authority 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. 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 withdraw from the engagement without completing and delivering the tax returns and shall not be liable for any damages that occur as a result of ceasing to render services. Such withdrawal would complete our engagement and you agree to pay our fee based on time expended (at our standard rates) plus all out of pocket expenses through the date of withdrawal.
    Your returns are subject to examination by the taxing authorities. In the event of an audit, you may be requested to produce documents, records, or other evidence to substantiate the information shown on the tax returns. We are not responsible for Internal Revenue Service calculation of values nor for resulting taxes, penalties, and interest.
    It is important for you to know that the law provides for a penalty to be imposed when taxpayers make a substantial understatement of their tax liability. Any items resolved against you by the examining agent are subject to certain rights of appeal. If an examination is made, we will represent you if you so desire. Such additional services are not included in our fee for preparation of your returns and the additional services and fees will be covered in a separate engagement letter.
    Tax laws and the interpretations of the laws continually change as a result of acts of Congress, court decisions, and Treasury interpretations. The changes occasionally are given a retroactive effect. The retroactive changes could result in improperly filed returns and/or negate planning efforts. You should be aware of this because the result might be that amended returns are required. These amended returns, if required, would be the subject of a separate engagement.
    The law provides for a penalty to be imposed where a taxpayer makes a substantial understatement of his or her tax liability. Taxpayers other than “tax shelters” 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) that the relevant facts affecting the item's tax treatment were adequately disclosed on the return. A taxpayer is considered a “tax shelter” if its principal purpose is to avoid federal income tax. You agree to advise us if you wish disclosure to be made in your returns or if you wish for 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 issues in your returns.
    If you and/or your entity (includes estates and trusts) 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 foreign account(s).

    The filing deadline for the Report of Foreign Bank and Financial Accounts (FBAR) required by the U.S. Department of the Treasury is April 15th and follows the federal income tax due date guidance, which notes that if the tax due date falls on a weekend or legal holiday, the form is considered timely filed if filed on the next business day. An automatic 6-month extension is available. Electronic filing of the FBAR is mandatory using the Bank Secrecy Act (BSA) e-filing system for the Financial Crimes Enforcement Network (FinCEN). We must receive a signed consent form from you prior to submitting the foreign reporting form. If we do not receive your signed authorization to file your foreign reporting form, we will not be able to file any of the required disclosure statements on your behalf.
    Additionally, the IRS requires information reporting on foreign interests or activities under applicable IRC sections and related regulations, and the respective IRS tax forms are due when your income tax return is due, including extensions. The IRS reporting requirements are in addition to the U.S. Department of the Treasury reporting requirements stated above. Therefore, if you have any direct or indirect foreign interests that require disclosures to the IRS, you must provide us with the information necessary to prepare the applicable IRS forms.
    Failure to timely file the appropriate forms with the U.S. Department of the Treasury and the IRS may result in substantial civil and/or criminal penalties. By your signature below, 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 the above referenced tax year. 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 us for advice in that regard. We assume no liability for penalties associated with the failure to file or untimely filing of any of these forms.
    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 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
    Our fee for these services are based on the time required by the individuals assigned to the engagement, plus out of pocket expenses. Individual hourly rates vary according to the degree of responsibility involved and the skill required. Payment for these services is due when invoices are presented. Billings become delinquent if not paid within 30 days of the invoice date. If billings are past due in excess of 45 days, at our election, we may stop all work until your account is brought current or withdraw from this engagement. Trustee/Personal Representative acknowledges and agrees that we are not required to continue work in the event of Trustee/Personal Representative's failure to pay on a timely basis for services rendered as required by this engagement letter. Trustee/Personal Representative further acknowledges and agrees that in the event we stop work or withdraw from this engagement as a result of Trustee/Personal Representative's failure to pay on a timely basis for services rendered as required by this engagement letter, we shall not be liable for any damages that occur as a result of our 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 workpapers prepared by MBE CPAs, LLP 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.
    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 agreements 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 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. Although we will use our best efforts to make the sharing of your information to such third parties secure from unauthorized access, no completely secure system for electronic data transfer has yet been devised. As such, by your signature below, you understand that the firm makes no warranty, expressed or implied, on the security of electronic data transfers.
    It is our policy to keep records related to this engagement for five (5) years. However, MBE CPAs, LLP does not keep any original client records, so we will return those to you at the completion of the services rendered under this engagement. When records are returned to you, it is your responsibility to retain and protect your records for possible future use, including potential examination by any government or regulatory agencies.
    By your signature below, 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 and, therefore, you should review them carefully before you sign and file them. 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.
    This firm is responsible for preparing only the return(s) listed above. All other returns and forms are to be prepared by you or under separate written engagement letters.
    It is our policy to keep records related to this engagement for five (5) years. However, MBE CPAs, LLP does not keep any original client records, so we will return those to you at the completion of the services rendered under this engagement. When records are returned to you, it is your responsibility to retain and protect your records for possible future use, including potential examination by government or regulatory agencies.
    By your signature below, you acknowledge and agree that upon the expiration of the five (5) year period, MBE CPAs, LLP shall be free to destroy our records related to this engagement.
    If any dispute arises among the parties hereto, the parties agree first to try in good faith to settle the dispute by mediation administered by the American Arbitration Association (AAA) under its Rules for Professional Accounting and Related Services Disputes. All unresolved disputes shall then be decided by final and binding arbitration in accordance with the Accounting Arbitration Rules of the AAA. Each party will be responsible for their own internal costs. Fees charged by any mediators, arbitrators or the AAA shall be shared equally by all parties.
    Executor and accountant both agree that any dispute over fees charged by the accountant to the Executor will be submitted for resolution by arbitration in accordance with the applicable rules for resolving professional accounting and related services disputes of the AAA, 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.
    In recognition of the relative risks and benefits of this agreement to the client and MBE CPAs, LLP, the client and MBE CPAs, LLP have discussed and have agreed on the fair allocation of risk between them. As such, the client agrees, to the fullest extent permitted by law, to limit the liability of MBE CPAs, LLP to the client for any and all claims, losses, costs, and damages of any nature whatsoever, so that the total aggregate liability of MBE CPAs, LLP to the client shall not exceed our total fee for services rendered under this agreement. The client and MBE CPAs, LLP intend and agree that this limitation apply to any and all liability or cause of action against MBE CPAs, LLP, however alleged or arising, unless otherwise prohibited by law. 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. Both parties agree that there is a one-year limitation period to bring a claim against us for errors and omissions. The one-year period will begin upon the date of the tax professional’s signature on the tax return covered by this engagement letter.
    We appreciate the opportunity to serve you. Please date and sign the enclosed copy of this letter to acknowledge your agreement with and acceptance of your responsibilities and the terms of this engagement. It is our policy to initiate services after we receive the executed engagement letter. If any provision of this agreement is declared invalid or unenforceable, no other provision of this agreement is affected and all other provisions remain in full force and effect.
    Sincerely,
    MBE CPAs, LLP

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