Professional U.S. Tax Preparation and Consulting Engagement Agreement

HTJ.TAX

Report of Foreign Bank and Financial Accounts (FBAR)

Dear Client:

HTJ.TAX (“firm,” “we,” “us,” or “our”) is pleased to provide you with the professional services described below. This letter, and the attached Terms and Conditions Addendum and any other attachments incorporated herein (collectively, “Agreement”), confirm our understanding of the terms and objectives of our engagement and the nature and limitations of the services we will provide. The engagement between you and our firm will be governed by the terms of this Agreement.

Engagement Objective and Scope

Financial Crimes Enforcement Network (“FinCEN”) Form 114, Report of Foreign Bank and Financial Accounts (“FBAR”)

This report is not a tax return nor is the related filing requirement part of filing an income tax return. It is a report filed with FinCEN, an agency of the U.S. Department of the Treasury, in compliance with the Bank Secrecy Act. FinCEN may share the information in this report with other federal and state agencies, including the Internal Revenue Service (“IRS”).

Generally, if you are a U.S. citizen or resident alien (green card holder), you must report all income from all sources within and outside of the U.S. on your U.S. income tax returns.

The information you provide (as delineated under Client Responsibilities below) may be used by us to determine if related IRS tax form filing requirements may apply to you. These filing requirements may include Form 8938, Statement of Specified Foreign Assets, Form 1116, Foreign Tax Credit, and Form 1118, Foreign Tax Credit - Corporations. If required, these forms must be filed with your U.S. income tax return. Failure to file required forms may result in the imposition of civil and criminal penalties, and the loss of income tax credits or deductions available for use in your U.S. income tax returns. The preparation of your U.S. income tax return is not within the scope of this engagement.

We cannot answer questions about use of the FBAR by agencies other than FinCEN. All such questions should be directed to your attorney for response prior to authorizing us to file the FBAR on your behalf.

We will not prepare any reports, tax forms or tax returns other than those identified above, without your written request, and our written consent to do so. We will rely upon the completeness and accuracy of the information and representations you provide to us to prepare your FBAR. We have not been engaged to and will not prepare financial statements. We will not audit or otherwise verify the data you submit to us, although we may ask you to clarify certain information. We also may ask you to authorize your attorney to release information to us.

We will prepare the above-referenced report solely for filing with FinCEN. Our work is not intended to benefit or influence any third party, either to obtain credit or for any other purpose.

You agree to indemnify and hold us harmless with respect to any and all claims arising from the use of the FBAR for any purpose other than filing with FinCEN regardless of the nature of the claim, including the negligence of any party.

Our engagement does not include any procedures designed to detect errors, fraud, or theft. Therefore, our engagement cannot be relied upon to disclose such matters. In addition, we are not responsible for identifying or communicating deficiencies in your internal controls. You are responsible for developing and implementing internal controls applicable to your operations.

This engagement is limited to the professional services outlined above.

Firm Responsibilities

Unless otherwise noted, we will perform our services in accordance with the Statements on Standards for Tax Services (“SSTSs”) issued by the American Institute of Certified Public Accountants (“AICPA”) and U.S. Treasury Department Circular 230 (“Circular 230”). It is our duty to perform services with the same standard of care that a reasonable tax return preparer would exercise in this type of engagement. It is your responsibility to safeguard your assets and maintain accurate records pertaining to transactions. We will not hold your property in trust for you, or otherwise accept fiduciary duties in the performance of the engagement.

HTJ.TAX, in its sole professional judgment, reserves the right to refuse to take any action that could be construed as making management decisions or performing management functions on your behalf.

 

Prior year review

Our review of the prior year’s report will necessarily be limited and may not find all errors. We will, however, bring to your attention any errors that we find. If you ask us to prepare an amended report and address any other matters arising as a result of any error, and we agree to amend the report, we will confirm this engagement in a separate agreement.

 

Tax planning services

Tax planning services are not within the scope of this engagement. During the course of preparing the FBAR identified above, we may bring to your attention potential tax savings strategies for you to consider as a possible means of reducing your taxes in subsequent tax years. However, we have no responsibility to do so, and will take no action with respect to such recommendations, as the responsibility for implementation remains with you, the taxpayer. If you ask us to provide tax planning services, and we agree to provide them to you, we will confirm this engagement in a separate agreement.

 

Government inquiries

This engagement does not include responding to inquiries by any governmental agency or tax authority. If your report is selected for examination or audit, you may request our assistance in responding to such an inquiry. If you ask us to represent you, and we agree to represent you, we will confirm this engagement in a separate agreement.

 

Third-party requests

We will not respond to any request from banks, mortgage brokers or others for verification of any information reported on these reports. We do not communicate with third parties or provide them with copies of reports.

 

Reliance on others

If you wish to take a tax position based upon the advice of another tax advisor, we must comply with Circular 230, §10.37(b) and AICPA SSTS No. 1 and related Interpretations 1-1 and 1-2, which requires the position to meet the “realistic possibility,” “substantial authority,” or “more likely than not” standard, as applicable. You agree to obtain a written statement from the advisor confirming the standard that should apply so the position may be properly disclosed. If additional research or disclosure is required, you agree to pay for the additional charges necessary to complete the disclosure or research.

 Client Responsibilities

You are responsible for informing us of all foreign financial assets and interests, including any financial interest in, or signature authority over assets, or financial accounts located in a foreign country. This information includes but is not limited to savings accounts, checking accounts, current accounts, securities accounts, custodial accounts, certificates of deposit, time deposits, mutual funds, annuities, insurance policies with cash surrender values, retirement accounts, and pension accounts. In addition, any ownership interests you directly or indirectly hold in an entity or company located in a foreign country such as a corporation, partnership or trust must be reported. Please disclose all items that may possibly fall within this broad definition. You are responsible for asking us if you have any questions about what is required to be reported.

 

Documentation

You are responsible for maintaining adequate documentation to substantiate the accuracy and completeness of your FBAR. You should retain all documents that provide evidence and support for reported balances on your FBAR, as required under applicable laws and regulations. You represent that you have such documentation and can produce it, if necessary, to respond to any audit or inquiry by FinCEN, or other tax authorities. You agree to hold our firm harmless from any liability including but not limited to, civil or criminal penalties, additional tax, interest and professional fees due to inadequate documentation.

 

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.

 

Virtual currency

The IRS considers virtual currency (e.g., Bitcoin) as property for U.S. federal income 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 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.

 

Ultimate responsibility

You have final responsibility for the accuracy of your FBAR. We will provide you with a copy of your electronic FBAR and accompanying schedules and statements for review prior to filing with FinCEN. You agree to review and examine it carefully for accuracy and completeness.

You will be required to verify and sign a completed FinCEN Form 114a, Record of Authorization to Electronically File FBARs, before your FBAR can be filed electronically.

 Timing of the Engagement

We expect to begin our services upon receipt of this executed Agreement and all information and documents necessary to prepare the report.

Our services will conclude upon the earlier of:

• the filing and acceptance of your FBAR by FinCEN,
• written notification by either party that the engagement is terminated.

Extensions of Time to File the FBAR Report

Due to the high volume of tax returns prepared by our firm, you must provide the information needed to prepare the FBAR no later than 1 month before the deadline

It may become necessary to automatically extend the filing deadline if there are unresolved issues or delays in processing, or if we do not receive all of the necessary information from you on a timely basis. Applying for an extension of time to file may extend the time available for FinCEN to undertake an audit of your report or may extend the statute of limitations to file a legal action. Extensions may affect your liability for penalties and interest or compliance with governmental or other deadlines.

 Penalties and Interest Charges – Related Returns

Failure to file an FBAR when required, or to fully and accurately disclose all information requested in the report, may result in the imposition of civil or criminal penalties, and interest charges on unpaid penalties. If you have income earned outside of the United States, additional penalty and interest charges can be assessed by the IRS and other tax authorities on such income if it is not reported on your income tax returns. These penalties and related interest charges may be significant. You, as the taxpayer, remain responsible for the payment of all tax, penalties, and interest charges imposed by tax authorities.

 Professional Fee

You agree that you will deliver all records requested and respond to all inquiries made by our staff to complete this engagement on a timely basis. You agree to pay all fees and expenses incurred whether or not we prepare the FBAR.

We require that all outstanding invoices be paid prior to releasing the completed FBARs. We do not release incomplete FBARs.

* * * * * *

We appreciate the opportunity to be of service. Please date and execute this Agreement and return it to us to acknowledge your acceptance. We will not initiate services until we receive the executed Agreement and retainer.

 

Very truly yours,

HTJ.TAX

___________________

Derren Joseph

 

 

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