The number 706 refers to Form 706 which is used to file the United States Estate (and Generation-Skipping Transfer) Tax Return. Generally, a contract to employ a certified public accountant need not be in writing. However, such contracts often call for services of a highly complex and technical nature, and hence they should be explicit in their terms, and they should be in writing. In particular, a written employment contract is necessary in order to avoid misunderstanding with the employer regarding the amount of the accountant's fee or compensation and the nature of its computation.
This form is a generic example that may be referred to when preparing such a form for your particular state. It is for illustrative purposes only. Local laws should be consulted to determine any specific requirements for such a form in a particular jurisdiction.
A Virginia Estate and Inheritance Tax Return Engagement Letter — 706 is a legal document that outlines the terms and conditions between an estate tax preparer or CPA (Certified Public Accountant) and the executor or administrator of an estate in Virginia. This engagement letter is specific to federal tax form 706, which is used to report and pay estate taxes. When preparing an estate tax return to Virginia, it is essential to have a clear understanding of the engagement letter. It acts as a contract, defining the responsibilities, rights, and expectations of both the preparer and the executor or administrator. By signing the engagement letter, both parties agree to abide by its terms, ensuring a smooth and efficient preparation process. The Virginia Estate and Inheritance Tax Return Engagement Letter — 706 typically addresses important aspects, including: 1. Parties Involved: Names, contact details, and roles of the executor or administrator (client) and the tax preparer or CPA (service provider). 2. Scope of Services: A comprehensive description of the services to be provided, such as reviewing the estate's financial records, calculating estate taxes, preparing necessary tax forms, and submitting them to the appropriate authorities. 3. Fees and Billing: Details regarding the fee structure and billing terms, including hourly rates, flat fees, retainer deposits, and payment schedules. Clear pricing information helps the client understand what they can expect in terms of charges. 4. Deadlines and Timelines: A clear outline of the expected timeline for the engagement, including deadlines for providing necessary documents, tax return filing, and payment due dates. This ensures the client is aware of the timeline and can gather all required information accordingly. 5. Responsibilities: Specific responsibilities of both parties, such as the executor or administrator's obligation to provide accurate and complete financial information and the tax preparer's commitment to adhere to established professional standards while preparing the tax return. 6. Confidentiality: A clause addressing the confidentiality of all client information, stating that the tax preparer will not disclose any sensitive details to third parties without appropriate authorization, unless required by law. 7. Termination of Engagement: The circumstances under which either party may terminate the engagement, such as non-payment, breach of contract, or mutual consent. This section outlines the process for concluding the engagement and any associated refund policies. 8. Governing Law: A provision stating that the engagement letter is governed by the laws of Virginia, ensuring legal compliance and dispute resolution. It is essential to note that while there can be variations in the content of engagement letters based on specific circumstances, the main purpose remains the same. Some variations may include Engagement Letters for Small Estates, Trusts, or Jointly Held Property, where different tax forms or different types of engagements might be involved.
