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Field Service Last updated November 3, 2026
General information, not legal advice. These templates are a starting point. What your letter must say depends on your credentials (CPA, EA, attorney or unenrolled preparer), your state board’s rules, the professional standards you follow and your professional liability insurer’s requirements. Have your own attorney or insurer review the final wording before you use it.
What should an engagement letter include?
A clear engagement letter answers seven questions, so that neither side is surprised later. For a definition, see what an engagement letter is.
- Who and when. The client’s legal name (and every entity covered), your firm’s name, the tax year or period, and the date the engagement starts.
- Scope of services. Exactly which returns, schedules or monthly tasks you will do, for example “2026 federal Form 1040 and one state resident return.”
- What is not included. Audits and reviews, IRS examinations, amended returns, other states, payroll, financial planning or anything else you don’t want assumed. Say that extra work needs a separate agreement.
- Client responsibilities. The client provides complete, accurate information by a set date, keeps the original records, reviews the return before signing, and is responsible for the return as filed.
- Fees and billing. A fixed fee, an hourly rate or a monthly retainer; when invoices go out and are due; deposits; late charges; and whether work stops for unpaid invoices.
- Limitations. You won’t audit or verify the information, the engagement isn’t designed to find fraud, and you rely on what the client gives you. Tax positions may be challenged by tax authorities.
- Records, privacy and ending the engagement. How long you keep files, how the client gets their records back, how you protect their information, and how either side can end the engagement.
Send the letter before work starts, get it signed (an e-signature is fine for most firms), and keep the signed copy with the client file. For recurring work, issue a new letter every year so dates, fees and scope stay current.
Tax return engagement letter template
For an individual income tax return. Replace each [BRACKETED] field and delete anything that doesn’t apply.
Template 1 · Individual tax return[FIRM NAME]
[FIRM ADDRESS]
[DATE]
[CLIENT NAME(S)]
[CLIENT ADDRESS]
Re: Engagement to prepare your [TAX YEAR] income tax returns
Dear [CLIENT NAME(S)],
Thank you for choosing [FIRM NAME]. This letter confirms the terms of our engagement and the nature and limits of the services we will provide.
1. Services we will provide
We will prepare your [TAX YEAR] federal individual income tax return (Form 1040) and the following state and local returns: [LIST STATE/LOCAL RETURNS]. We will also [LIST ANY OTHER AGREED SERVICES, e.g. "prepare fourth-quarter estimated tax vouchers for [NEXT YEAR]"].
2. Services not included
This engagement does not include: tax returns for any other year, entity or jurisdiction; amended returns; representation before the IRS or any state agency in an examination, collection or appeal; tax planning beyond the preparation of these returns; or [OTHER EXCLUSIONS]. We are happy to provide these services under a separate engagement letter.
3. Your responsibilities
You are responsible for providing us with complete and accurate information, including all income documents, deduction records and prior-year returns, by [DOCUMENT DEADLINE]. Information received after that date may require an extension of time to file. You are responsible for keeping the records that support the items on your returns, for reviewing the returns carefully before signing them, and for the returns as filed. You also confirm that you will tell us about any foreign accounts or assets, digital asset transactions, and any notices you have received from a tax authority.
4. Our responsibilities and limitations
We will prepare your returns from the information you provide, without audit or other verification, although we may ask you for clarification or supporting documents. Our work is not designed to detect errors, fraud or other irregularities. If we become aware of an error in a prior-year return or of non-compliance with the tax law, we will tell you, along with the consequences of not correcting it; correcting it is your decision. Where the tax law is unclear, we will explain any position that has a reasonable basis and tell you about any disclosure that may be required. Tax authorities may examine your return and challenge positions taken; any resulting tax, penalties and interest are your responsibility.
5. Fees and billing
Our fee for these services is [FIXED FEE / based on our standard hourly rates of $[RATE] per hour, estimated at $[ESTIMATE]]. Additional work outside the scope above will be billed at [RATE] after we discuss it with you. Invoices are due [WHEN, e.g. "on receipt" / "within 15 days"]. [We require a deposit of $[AMOUNT] before work begins.] We may suspend work, including filing, if invoices are unpaid.
6. Electronic filing and signatures
We will file your returns electronically once you have reviewed them and signed the required authorization forms (such as Form 8879). We will not file until we receive your signed authorization.
7. Records, confidentiality and retention
We will return your original records to you at the end of the engagement or on request. We keep copies of your returns and our working papers for [NUMBER] years, after which they may be destroyed. We will keep your information confidential and will not use or disclose your tax return information for any purpose other than preparing your returns without your written consent, except as required by law.
8. Ending this engagement
This engagement ends when your returns are filed, or earlier if either of us gives written notice. If the engagement ends early, you agree to pay for work performed up to that date.
If these terms are acceptable, please sign and return a copy of this letter by [RETURN DATE]. If you have questions, contact [CONTACT NAME] at [FIRM PHONE] or [FIRM EMAIL].
Sincerely,
[PREPARER NAME], [CREDENTIAL]
[FIRM NAME]
Accepted and agreed:
______________________________ Date: __________
[CLIENT NAME]
______________________________ Date: __________
[SPOUSE NAME, if filing jointly]
Monthly bookkeeping engagement letter template
For recurring bookkeeping that does not include preparing financial statements for third parties. If you will prepare, compile or review financial statements, your letter needs the terms that the relevant professional standards require.
Template 2 · Monthly bookkeeping[FIRM NAME]
[FIRM ADDRESS]
[DATE]
[CLIENT BUSINESS LEGAL NAME]
Attn: [OWNER OR MANAGER NAME]
[CLIENT ADDRESS]
Re: Monthly bookkeeping services
Dear [OWNER OR MANAGER NAME],
This letter confirms the terms on which [FIRM NAME] will provide bookkeeping services to [CLIENT BUSINESS LEGAL NAME] starting [START DATE].
1. Services we will provide
Each month we will: record transactions from the bank and credit card accounts you give us access to ([LIST ACCOUNTS]); categorize transactions in [ACCOUNTING SOFTWARE]; reconcile those accounts to their statements; [record bills and invoices / run payroll entries / OTHER]; and send you a profit and loss statement and balance sheet for internal use by the [DAY] business day of the following month.
2. Services not included
This engagement does not include: an audit, review or compilation of financial statements; tax return preparation or tax advice; payroll tax filings; sales tax filings; paying bills or moving money on your behalf; or [OTHER EXCLUSIONS], unless agreed separately in writing.
3. Your responsibilities
You are responsible for the business’s financial records and internal controls, for providing statements, receipts and answers to our questions by the [DAY] of each month, for approving any adjustments we propose, and for the accuracy of the books. You are responsible for decisions made using the reports we provide.
4. Limitations
We will rely on the information and access you provide and will not audit or verify it. Our work is not designed to detect errors, fraud or theft, although we will tell you about anything significant that comes to our attention. The monthly reports are for your internal use and should not be given to lenders or other third parties as financial statements without a separate engagement.
5. Fees and billing
Our fee is $[MONTHLY FEE] per month for up to [NUMBER] transactions and [NUMBER] accounts. Clean-up of prior periods, extra accounts or work beyond this scope will be billed at $[RATE] per hour after we agree it with you. We invoice [IN ADVANCE / IN ARREARS] on the [DAY] of each month, and payment is due within [NUMBER] days. We may pause work if invoices are more than [NUMBER] days overdue.
6. Access and confidentiality
You will give us read-only access to bank and card accounts where possible. We will keep your information confidential, use it only for this engagement, and remove our access when the engagement ends.
7. Records and retention
Your books remain your property. We keep our working papers for [NUMBER] years after the end of the engagement. When the engagement ends we will give you your records and help transfer access to [ACCOUNTING SOFTWARE].
8. Term and ending this engagement
This agreement continues month to month until either of us gives [NUMBER] days’ written notice. You agree to pay for work completed up to the end of the notice period.
Please sign and return a copy by [RETURN DATE] to confirm these terms.
Sincerely,
[NAME], [CREDENTIAL]
[FIRM NAME]
Accepted and agreed on behalf of [CLIENT BUSINESS LEGAL NAME]:
______________________________ Date: __________
[NAME AND TITLE]
What do AICPA standards and Circular 230 mean for your letter?
Neither requires a particular template, but both shape what a careful letter says. In general terms:
- AICPA standards (for CPAs who are AICPA members). The AICPA’s Statements on Standards for Tax Services set expectations for tax positions, client-provided information and telling clients about errors, and the AICPA publishes sample engagement letters for members. If you prepare, compile or review financial statements, the Statements on Standards for Accounting and Review Services (SSARS) require you to agree the terms of the engagement in writing, so a bookkeeping letter that grows into financial-statement work needs updating.
- IRS Circular 230 (for CPAs, EAs and attorneys who practice before the IRS). It covers matters such as returning client records on request, advising clients of errors or omissions you discover, due diligence, conflicts of interest and limits on contingent fees. Your letter shouldn’t promise anything that conflicts with these duties.
- Use and disclosure of tax return information. Federal rules restrict how preparers use or disclose a client’s tax return information for purposes other than preparing the return, and some uses require the client’s separate written consent in a specific form. Don’t bury that consent inside the engagement letter.
- State boards and insurers. State accountancy boards and professional liability insurers may have their own requirements, for example on record retention, limitation-of-liability clauses or dispute resolution.
See the IRS Circular 230 page and the AICPA for the current text of each.
How long should you keep engagement letters and client records?
Keep the signed engagement letter for at least as long as the working papers it covers. Common reference points:
- Paid preparers must keep a copy of each return they prepare, or a list of the clients and returns, for at least three years after the close of the return period.
- The IRS generally recommends that taxpayers keep records for three years after filing, and longer in some cases, such as six years if income was substantially under-reported.
- Many firms keep working papers and engagement letters for seven years. Check your state board’s rules and your insurer’s guidance, and state your firm’s period in the letter.
Original client records belong to the client. Say in the letter how and when you return them.
How do you send and track engagement letters each year?
- Send before you start. Make a signed letter the first step of every engagement, and don’t begin work until it’s back.
- Renew every year. A dated letter per tax year or per year of bookkeeping keeps fees and scope current.
- Put scope changes in writing. When a client asks for something outside the letter, send a short addendum with the extra fee before you do it.
- Track it with the work. Record the engagement type, fee and due date alongside the job, so you can see what was agreed when you invoice.
These templates are general information to help you draft your own letters. They are not legal, tax or professional advice and do not cover every situation, credential or state. Review them with your attorney or professional liability insurer before use.