Master Service Agreement

1. Scope of Services

We will prepare your federal and specific state income tax returns for the tax year indicated in your Engagement Letter. Our services are limited to:

• Preparation of Federal Form 1040 (Individual) or Forms 1065/1120/1120‑S (Business).
• Preparation of state subsidiary returns where you have indicated nexus.
• Providing a draft for your review and approval.
• Electronic filing of your return(s) once signed and paid.

Exclusions: Unless specifically engaged in writing, our services do not include financial statement auditing, review, or compilation; bookkeeping; payroll compliance; sales tax filing; tax planning or projections; or representation beyond responding to initial IRS/State notices on returns we prepared. We will not prepare any tax returns except those identified without your written authorization.

You acknowledge that the tax returns are prepared solely for filing with the IRS and applicable state/local authorities, not for any third‑party purpose. You agree to indemnify the Firm against claims arising from use of the returns for any other purpose.

2. Client Responsibilities

The accuracy of your return depends entirely on the information you provide. You agree to:

1. Completeness: Provide all necessary information, income records, and expense logs in a timely manner. This includes all worldwide income.
2. Substantiation: Retain all original receipts, canceled checks, mileage logs, and other proof of deductions. You understand that the tax law requires you (not the Firm) to keep these records.
3. Review: Carefully review the draft return for accuracy before signing the e‑file authorization. You bear final responsibility for the return's content.
4. Verification: Provide valid government‑issued identification and, if applicable, proof of foreign status or ITIN. This is required for IRS e‑file authentication and our Know Your Client (KYC) compliance.
5. State/Local Obligations: You are responsible for determining any state or local filing obligations beyond those explicitly included in the engagement.

3. E‑Filing Process

We are an Authorized IRS e‑file Provider. To file your return, the following steps must occur:

• Form 8879: You must digitally sign Form 8879 (E‑File Authorization). We cannot legally press the "send" button without this.
• Payment: All invoices must be paid in full before filing.
• Rejections: If a return is rejected (e.g., due to a mismatching birth date or duplicate SSN), we will notify you. Correcting data entry errors is free; correcting errors caused by your misinformation may incur fees.

4. Foreign Accounts & Virtual Currency

The IRS requires specific disclosures for offshore assets and cryptocurrency. Failure to report these can result in confiscatory penalties (often starting at $10,000 per violation).

4.1 Foreign Bank Accounts (FBAR)

You must inform us if you have a financial interest in, or signature authority over, foreign accounts exceeding $10,000 in aggregate value at any time during the year. FBAR filing is a separate engagement from your tax return. The FBAR is due April 15 (automatic extension to October 15). Civil and criminal penalties apply for non‑filing.

4.2 FATCA (Form 8938)

If you hold specified foreign financial assets exceeding applicable thresholds ($50,000 for single filers, $100,000 for joint filers, or higher for expats), you must inform us to prepare Form 8938. Failure to file carries a $10,000 penalty per violation.

4.3 Virtual Currency / Crypto

You must disclose if you sold, exchanged, gifted, mined, or staked cryptocurrency. We rely on you to provide accurate gain/loss reports from your exchanges or crypto‑tax software.

4.4 PFIC & Foreign Investments

If you hold foreign mutual funds, ETFs, or certain foreign insurance products, additional complex reporting (e.g., Form 8621) may be required. You must inform us of all such holdings; this work is billed separately from standard tax preparation due to its complexity.

4.5 Corporate Transparency Act (CTA)

If you own or control an entity, you may have Beneficial Ownership Information (BOI) reporting obligations with FinCEN. Our engagement does not include CTA compliance. You are solely responsible for meeting BOI deadlines. Refer to FinCEN BOI.

5. Audit Support & Representation

Tax preparation and Tax Representation are distinct services.

• Standard Service: Our fee covers the preparation of the return only. It does not include responding to IRS/State inquiries.
• Notices: If you receive a notice, contact us immediately. Reviewing the notice and drafting a response will be billed at our standard hourly rates.
• Firm Errors: If a notice arises solely due to our data entry error, we will resolve it at no cost to you and reimburse valid penalties. We are not responsible for taxes owed.
• Audit Protection (if offered): We may offer optional audit protection for a separate fee. If accepted, we will represent you before the IRS/State for the covered return at no additional professional fee, though you remain responsible for taxes, penalties, and interest.

6. Fees & Billing

Fees are generally based on the forms required and the complexity of your situation.

• Retainers: New business clients may be asked for a 50% retainer before work begins.
• "Shoebox" Fee: If you provide disorganized records requiring us to tally receipts, we charge a bookkeeping rate of $125/hour.
• Expedited Fee: Data received within 14 days of the tax deadline is subject to a 25% rush fee.
• Non‑Payment: We reserve the right to suspend services or withhold e‑filing if fees are outstanding.
• Refunds: Once a return has been e‑filed or a final deliverable provided, fees are non‑refundable. If you terminate prior to completion, you will be billed only for work performed.

7. Record Retention & Privacy

In accordance with AICPA standards, IRS regulations, and our Privacy Policy:

• We retain copies of your tax returns and workpapers for seven (7) years.
• After 7 years, files are securely destroyed.
• We utilize SOC‑2 compliant cloud portals for data storage. By using our services, you consent to the storage of your data on these secure third‑party servers.
• You should retain all original documents for at least the same period, and indefinitely for assets.

8. Limitation of Liability & Indemnification

Limitation: To the maximum extent permitted by law, the Firm's liability for any claim arising out of this engagement shall not exceed the total fees paid by the Client for the specific service rendering the liability. This limitation does not apply to liability arising from fraud, intentional misconduct, or gross negligence on the part of the Firm.

Indemnification: You agree to indemnify and hold the Firm harmless from any liability, costs, or penalties resulting from knowing misrepresentations made by you or your failure to provide complete and accurate information.

9. Termination

Either party may terminate this engagement at any time by written notice. If terminated:

• You will be billed for all work performed (WIP) up to the date of termination.
• We will return all your original documents.

10. Dispute Resolution & Governing Law

Governing Law: These Terms shall be governed by and construed in accordance with the laws of the State of New York, without regard to its conflict of law principles.

Arbitration: Any dispute arising out of or relating to these Terms or our services shall be resolved by binding arbitration in New York County, New York, administered by the American Arbitration Association. Arbitration shall be on an individual basis only; class arbitrations are waived. Each party shall bear its own costs and fees.

Venue: If arbitration is held unenforceable, any court action shall be brought exclusively in the state or federal courts located in New York County, New York.

11. General Provisions

Confidentiality: We treat all client information as confidential in accordance with professional ethics, the Gramm‑Leach‑Bliley Act (GLBA), and our Privacy Policy.

Force Majeure: Neither party shall be liable for delays or failures in performance resulting from acts beyond their reasonable control, including but not limited to acts of God, government actions, cyberattacks, or internet service disruptions.

Severability: If any provision of these Terms is held unenforceable, the remaining provisions shall remain in full force and effect.

No Waiver: The failure of either party to enforce any right or provision shall not constitute a waiver of such right or provision.

Circular 230 Disclosure: Any tax advice contained in our communications is not intended to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code.

12. Additional Firm Policies

12.1 Engagement Letter Primacy

Each engagement will be documented by a separate Engagement Letter that outlines the specific scope, fees, and deadlines. The Engagement Letter, together with these Terms and the Privacy Policy, constitutes the complete agreement. You will receive the Engagement Letter for electronic acceptance before work commences.

12.2 Electronic Communications Consent

By engaging our services, you consent to receive all communications, including tax drafts, invoices, and IRS notices, electronically via our secure portal or email. You may withdraw this consent at any time, but doing so may delay service delivery.

12.3 Third‑Party Service Providers

We may utilize third‑party software (e.g., tax preparation platforms, cloud storage, payment processors) to deliver our services. These providers are contractually bound to maintain confidentiality and security consistent with our Privacy Policy. We remain fully responsible for the services performed.

12.4 Client Portal & Data Security

You will be provided with a secure client portal. You are responsible for maintaining the confidentiality of your portal credentials. Notify us immediately of any unauthorized access. We employ multi‑factor authentication, encryption, and access logging.

12.5 Referral & Testimonial Release

We may request your consent to use your name and general feedback as a testimonial. Such consent will be obtained via a separate written release and is never required for service. You may decline without any impact on your engagement.

12.6 Anti‑Money Laundering / KYC

As a professional tax preparation firm, we are required to verify client identity and may be obligated to report suspicious activity under the Bank Secrecy Act. By engaging us, you authorize us to use the information you provide for identity verification and to comply with legal obligations.

12.7 IRS Representation (POA)

If you wish for us to represent you before the IRS beyond responding to a notice on a return we prepared, a separate engagement letter and a signed Form 2848 (Power of Attorney and Declaration of Representative) will be required. Fees for representation are separate and will be quoted in advance.

13. Professional Standards & Compliance

As a firm of Enrolled Agents (EAs) and Certified Public Accountants (CPAs), we adhere to the AICPA Code of Professional Conduct, IRS Circular 230, and the Statements on Standards for Tax Services (SSTSs). We will exercise due professional care and judgment in the preparation of your returns.

13.1 Reliance on Information

We rely on the accuracy and completeness of the information you provide. We will not audit or verify the data unless separately engaged. If we identify inconsistencies, we will bring them to your attention.

13.2 Quality Control

All returns are reviewed by a second qualified professional (CPA or EA) before delivery. This internal review is designed to catch errors and ensure compliance, but it is not a guarantee against future IRS adjustments.

14. Tax Positions & Penalties

Federal law imposes penalties for substantial understatements of tax, negligence, or disregard of rules. A 20% penalty applies to understatements exceeding the larger of 10% of the correct tax or $5,000. To avoid this penalty, a position must have substantial authority or be adequately disclosed on Form 8275.

We will use professional judgment to resolve uncertainties in your favor where reasonable justification exists. If a tax law is unclear or conflicting interpretations exist, we will explain the options. We will follow the position you request, provided it is consistent with the tax code and professional standards. If the IRS later challenges the position, you may be subject to additional tax, interest, and penalties. We assume no liability for such assessments except as provided in Section 8.

If you wish to disclose a position to avoid penalties, you must request that we prepare Form 8275. Preparation of such disclosure is an additional service subject to separate fees.

15. Engagement Letter & Signature

These Terms are accepted by your execution of the Engagement Letter, your electronic signature, or your submission of tax information to our portal. Any modifications must be in writing and signed by both parties. If any provision is held invalid, the remainder shall continue in effect.

16. Contact Information

For questions or notices under this Agreement:

Yellow Business Services Co.
Email: business@yellowbusinessservices.com
Phone: (917) 997-9255