Income

Expenses

Business Tax Contract

Authorization & Audit Disclosure Agreement

This Agreement is entered into between T&C TAX (“Tax Preparer”) and the undersigned Client (“Client”).

1. PURPOSE OF AGREEMENT
The purpose of this Agreement is to outline responsibilities, disclosures, limitations of liability, and client authorization related to reporting a business, self-employment, or side income on the Client’s federal and/or state tax return(s).

2. CLIENT RESPONSIBILITIES & REPRESENTATIONS
The Client certifies and agrees that:

All business income, expenses, deductions, and credits provided are true, correct, complete, and accurate to the best of their knowledge.
The Client is responsible for maintaining all supporting records, including but not limited to:

Receipts
Bank statements
Invoices
Mileage logs
Profit & Loss statements
Business licenses (if applicable)
The Tax Preparer does not audit, verify, or validate the authenticity of documents provided.
The Client confirms the business is operated with intent to earn a profit, not solely for personal or hobby purposes

T&C TAX will need to collect one or more for your folder-

3. AUTHORIZATION TO FILE BUSINESS ACTIVITY
The Client explicitly authorizes and grants permission to T&C TAX to:

Prepare and file business-related schedules, including but not limited to:

Schedule C (Profit or Loss From Business)
Schedule E or other applicable business forms
Report the business income and expenses as provided by the Client
Electronically file the Client’s tax return(s) including the business activity
This authorization is given voluntarily and based on information supplied by the Client.

4. BUSINESS VS. HOBBY DISCLOSURE
The Client understands and acknowledges that:

The IRS may classify an activity as a hobby if it does not show a profit in at least 3 out of 5 consecutive tax years.
If reclassified as a hobby:

Business deductions may be limited or disallowed
Additional taxes, penalties, and interest may apply
Reporting a business for more than three (3) consecutive years with losses increases audit risk.

5. AUDIT RISK DISCLOSURE
The Client understands that:

Audits may occur due to:

Business income reporting
Repeated losses
High deductions compared to income
Random IRS selection
Audits can occur randomly, even when the return is prepared accurately.

6. LIMITATION OF LIABILITY
The Client agrees that:

T&C TAX is not responsible for:

IRS or state audits
Penalties, interest, or additional taxes assessed
Disallowed deductions due to insufficient documentation or misclassification
The Tax Preparer relies solely on information provided by the Client and is not liable for errors caused by false, incomplete, or misleading information.

7. AUDIT ASSISTANCE FEE
The Client understands and agrees that:

Audit assistance is not included in tax preparation fees.
If audited and assistance is requested, an additional non-refundable fee of $250.00 will apply for:

Audit guidance
Document review
Correspondence assistance
This fee does not guarantee audit outcomes and does not include formal representation before the IRS unless separately agreed upon in writing.

8. NO GUARANTEE OF RESULTS
The Client acknowledges that:

No guarantees are made regarding:

Refund amounts
Audit avoidance
Acceptance of deductions or credits

9. CLIENT ACKNOWLEDGMENT & CONSENT
By signing below, the Client confirms that they:

Have read and understand this Agreement
Authorize T&C TAX to file business activity on their tax return
Accept full responsibility for all business information provided
Agree to all terms and conditions stated herein