2018CorpLetter ENGAGEMENT LETTER FOR 2018 CORPORATION (AND LIMITED LIABILITY COMPANIES ELECTING TO BE TAXED AS CORPORATIONS) INCOME TAX SERVICES) This letter is to confirm and specify the terms of our agreement with you and to clarify the nature and extent of the services we will provide. This document is to ensure there is an understanding of our mutual responsibilities. We will prepare your 2018 federal and requested state corporation income tax returns for calendar year 2018. Our engagement is limited to preparation of these returns, and we assume no responsibility for any other returns you may be required to file. Although we may ask you for clarification of information provided to us by you and your representatives, we will prepare your tax returns from information provided and will not audit or otherwise verify any data submitted to us. We will not perform any procedures to detect errors, fraud, or theft; so, our work cannot be relied upon to disclose such. We will prepare these returns solely for filing with the Internal Revenue Service (“IRS”) and state and local tax authorities you have identified below. Our work is not intended to benefit or influence any third party - either to obtain credit or for any other purpose - and you agree to indemnify and hold us harmless for any and all claims arising from the use of the tax returns for any purpose other than filing with the respective tax authorities, regardless of the nature of the claim, including the negligence of any party. Our Responsibilities We use the same standard of care any reasonable income tax preparer would exercise in this type of engagement. We will not hold property in trust for you or otherwise accept fiduciary duties in the performance of this engagement. We will prepare your tax returns based upon the ownership, capital and income sharing percentages reflected in your prior year income tax returns unless you notify us of changes that have taken place since that return was completed. Confidentiality We take every precaution to protect confidentiality of electronic communications. However, we cannot be responsible for any loss or damage (consequential or otherwise) to any person or entity from the use of email or other forms of electronic data transmissions in the preparation, completion and delivery of your income tax returns. Bookkeeping Assistance We may deem it necessary to provide you with limited accounting and bookkeeping assistance solely for the purpose of preparing the tax returns. These services will not result in the preparation of financial statements without an additional (or an addendum to this) engagement letter. Additional charges will apply for such services. Estimated Tax Payments Any estimated tax payments for 2019 will be calculated based upon information you provide or from the final results of your 2018 returns (if you provide no additional data for us to use) and we have no obligation to update any recommended payments. Any additional data provided after the estimates are prepared may result in additional charges for updating or changing the originally calculated estimates. Government Inquiries This engagement specifically excludes responding to inquiries by any governmental agency or tax authority. If your return is selected for examination or audit, you may request our assistance in responding to such an inquiry, and we will establish a separate engagement for those services. Third-Party Verification Requests We will not respond to any request from banks, mortgage brokers or others for verification of information in your tax returns without written (in IRS form) authorization from you. Tax Advice Our advice is based upon tax reference materials, facts, assumptions, and representations known to us at the time the advice is rendered. We are under no obligation to update our advice after it has been initially rendered. Arguable Positions We resolve questions in your favor where a tax law is unclear, as long as there is substantial support for it. (Substantial support means it is “more likely than not” the position will be upheld if questioned by tax authorities.) Substantial Understatement Penalties The IRS and many states impose penalties for substantial understatement of tax which can be avoided if you have substantial authority to support the tax treatment of the item challenged by the IRS or have adequate disclosure of the item and the disclosed tax position meets the “reasonable basis” standard as having some authority supporting the position which cannot be simply arguable. Listed Transactions and Other Reportable Transactions The law imposes substantial penalties on taxpayers and tax advisors for failure to disclose listed and other reportable transactions whose primary purpose is tax avoidance, including but not limited to listed transactions, confidential transactions, transactions with contractual protection, loss transactions, and transactions of interest. Tax Shelters Tax preparers are required to conform to a higher standard than the taxpayer when an undisclosed tax position is related to a tax shelter. This higher standard requires the preparer to have a reasonable belief any undisclosed tax position would more likely than not be sustained on its merits if challenged by the IRS and there is a reasonable basis for the tax treatment. We must prepare your return to this higher standard, which may require our spending additional time to do the research and analysis necessary to meet the standard. Your Responsibilities You will provide us with a trial balance and other supporting data necessary to prepare your tax returns. You must provide us with accurate and complete information including income from all sources, including those outside of the U.S. You agree to deliver all records requested and respond to all inquiries made by our staff to complete this engagement on a timely basis. You understand we rely upon the accuracy, completeness and timeliness of both the information you provide and other supporting data your agents and advisors provide us in rendering our professional services to you. You authorize us to accept and rely upon documents and verbal clarifications from you, your advisors, brokers and representatives regarding financial transactions reported in tax returns we are preparing on your behalf. You agree to pay our invoices upon presentation without delay or discount. If not paid on demand, you agree to a 20% collection charge plus any out-of-pocket expenses we incur for collection. You agree to disclose to us any and all transactions entered into for tax-motivated reasons or transactions executed in a manner designed to achieve a particular tax result. Online Access to Information To the extent you provide our firm with access to electronic data via a local or online database from which we will download your trial balance or other information, you agree that the data is accurate as of the date and time you authorize it to be downloaded and you agree not to alter data pertaining to the period(s) for which we are preparing returns without also notifying us of all changes made, or to be made, which would affect the period for which we are preparing return(s). Corporation Agreement You should review your Corporation agreement (preferably with your attorney) to ensure it addresses the significant changes to the Corporation audit regime that will generally apply to Corporation returns filed after 2018. These changes include, but are not limited to the following: Replacement of a “tax matters representative” with a “corporation representative.” Current shareholders being held responsible for tax liabilities of prior shareholders. The Corporation being held responsible for remittance of additional tax rather than individual shareholders being taxed. Numerous elections or opt-outs that the “corporation representative” may make. In addition, you should review your corporation agreement to ensure it meets your goals for the transfer of ownership and distribution of income. Often, corporation agreements do not address the transfer of ownership or may require updating as circumstances change. You acknowledge and confirm that it is your responsibility to review your corporation agreement with your attorney to ensure it addresses the changes to the corporation audit regime and meets your goals for the transfer of ownership and distribution of income. Shareholder and Officer Salaries Shareholders and officers, as well as related employees, who perform services for the corporation are generally expected (and in most cases required) to receive compensation in proportion to the services provided to the corporation. There can be significant financial and tax consequences for those persons receiving too little or too much compensation in relation to the services rendered to the corporation. Additionally, fringe benefits for shareholders, officers and related employees can have much different tax and reporting requirements than those provided to other employees. You are responsible for proper reporting of those items or disclosing those to us for proper treatment in your corporation’s tax returns. Documentation You are responsible for maintaining adequate documentation to substantiate the accuracy and completeness of your tax returns. You should retain all documents that provide evidence and support for reported income, credits and deductions on your returns, as required under applicable tax laws and regulations. You represent you have such documentation and can produce it, if necessary, to respond to any audit or inquiry by tax authorities. Personal Expenses You are responsible for ensuring that personal expenses, if any, are segregated from business expenses, and expenses such as meals, travel, entertainment, vehicle use, gifts and related expenses are supported by necessary records required by the IRS and other tax authorities. State and Local Filing Obligations You are responsible for determining your tax filing obligations with any state or local tax authorities, including, but not limited to income, franchise, sales, use, property or unclaimed property taxes. You agree we have no responsibility to research these obligations or to inform you of them. If upon review of the information you have provided to us, including information that comes to our attention, we believe that you may have additional filing obligations, we will notify you of this responsibility. U.S. Filing Obligations Related to Foreign Financial Assets You are required to report the maximum value of specified foreign financial assets, which include financial accounts with foreign institutions and certain other foreign non-account investment assets and you are responsible for informing us of all foreign assets. Based upon information you provide, we will calculate any applicable foreign tax credits and notify you if the data indicates you may be subject to additional filing requirements. Failure to file forms can result in both civil and criminal penalties, which may be substantial in amount. Some of these filings are not considered “tax” returns, and their preparation is not within the scope of this engagement. 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 foreign filing obligations are not within the scope of this engagement. Employment Records You are responsible for obtaining Form I-9, Employment Eligibility Verification, from each new employee at the time of employment. In addition, Federal Form W-4, Employee’s Withholding Allowance Certificate, and the applicable state equivalent should be retained for all employees. Failure to obtain these forms may subject an employer to penalties. Additional state requirements related to employment records may also exist. Worker Classification You acknowledge and confirm that you are responsible for determining the correctness of any worker classification. Payroll tax withholding and related employer payroll tax implications result from this determination. We recommend obtaining a signed contract and signed Form W-9, Request for Taxpayer Identification Number and Certification, from all independent contractors. You should also issue a Form 1099-MISC, Miscellaneous Income, to all attorneys and unincorporated independent contractors to whom you pay $600 or more for services. Ultimate Responsibility You have final responsibility for your tax returns and you agree to carefully review and examine copies provided to you (electronically or otherwise) for accuracy and completeness before they are filed with the appropriate tax authorities. You are required to verify and sign a completed e-file Signature Authorization form for federal and applicable states if your returns are to be filed electronically. You have the option of NOT filing your tax returns electronically but must contact us if you desire to do so since additional procedures will apply. Indemnification You agree to hold our firm harmless from any and all actual and consequential damages (including but not limited to tax, penalties, interest and professional fees) you incur as a result of including disclosures we believe are required and such disclosures are filed with your tax return regardless of the nature of the claim, including the negligence of any party. You acknowledge your responsibility to inform us of any listed transactions or other reportable transactions as designated by the IRS and agree to indemnify us and hold our firm harmless with respect to any additional tax, penalties, interest and professional fees resulting from your failure to timely notify us, in writing, of all tax-motivated transactions or tax-structured transactions. You hereby release us from any liability for such additional tax, penalties interest and related professional fees, as well as agreeing to reimburse us for any penalties assessed on us for your not providing us complete and accurate information in preparing your returns or your not having adequate documentation for the items represented to us in preparing your returns. Timing of the Engagement We expect to begin our services upon receipt of your year-end trial balance, and other supporting data agreed to above. Our services under this engagement will conclude upon the electronic filing of your returns with the appropriate tax authorities (after your written authorization is received by us), completion of your returns in paper form with their being available for delivery to you or written notification by either party that the engagement is terminated. Extensions of Time to File Tax Returns Filing due dates for Corporation tax returns are as follows: 1120S returns with a fiscal year end of December 31st are due on March 15, 2019. All information needed to complete the returns must be received no later than February 28, 2019. 1120C, 1120F and 1120H returns with a fiscal year end of December 31st are due on April 15, 2019. All information needed to complete the returns must be received no later than March 29, 2019. 1120C, 1120F and 1120H returns with a fiscal year end of June 30th are due on September 16, 2019. All information needed to complete the returns must be received no later than August 30, 2019. Returns with fiscal year ends other than those referenced above are due on the 15th of the fourth month after the fiscal year end. All information needed to complete the returns must be received no later than the last day of the month prior to the due date. (i.e. A return with a fiscal year end of March 31, 2019, would be due on July 15, 2019, and information must be received by us no later than June 30, 2019.) As a matter of convenience, we file extensions if there are unresolved issues or delays in processing or we do not receive all of the necessary information from you on a timely basis. An extension may extend the time a government agency has to audit your return or extend the statute of limitations to file a legal action. Any taxes owed are due by the original filing due date. Late payments make you susceptible to penalties and interest. Penalties and Interest Charges Federal, state and local tax authorities impose various penalties and interest charges for non-compliance with tax laws and regulations, including failure to file, late filing of returns, late payment, underpayment and inadequate disclosure. You, as the taxpayer, remain responsible for the payment of all tax, penalties and interest charges imposed by tax authorities. Professional Fees Our professional fee for services performed hereunder is based upon the complexity of the work performed and any out-of-pocket expenses we incur. In addition, fees depend upon the timely delivery, availability, quality and completeness of the information you provide to us. You agree to pay all fees and expenses incurred whether or not we complete preparation of these tax returns to the extent we have expended efforts toward completion of the returns. In the event we are required to respond to a subpoena, court order or other legal process for the production of documents and/or testimony relative to information we have obtained and/or prepared during the course of this engagement, you agree to compensate us at our hourly rates then in effect, for the time we expend in connection with such response and to reimburse us for all of our out-of-pocket costs incurred in that regard. Document Retention We retain documentation of this engagement for four years, after which it is subject to destruction. All original documents provided to us will be available for pickup at the time you are notified of the returns’ completion. Any documents not retrieved by you within 27 months of completion of your returns are subject to destruction. Potential Litigation Any litigation arising out of this engagement, except actions by us to enforce payment of our professional invoices, must be filed within one year from the completion of the engagement, notwithstanding any statutory provision to the contrary. Our liability relating to the performance of the services rendered under this letter is limited solely to direct damage sustained by you for returns prepared under this agreement. In no event shall we be liable for the consequential, special, incidental, or punitive loss, damage or expense caused to you or to any third party (including without limitation, lost profits, opportunity costs, etc.) Notwithstanding the foregoing, our maximum liability relating to services rendered under this engagement (regardless of form of action, whether in contract, negligence or otherwise) shall be limited to the fees received by us for this engagement. The provisions set forth in this paragraph shall survive completion of this engagement. Notwithstanding anything contained herein, both you and we agree, regardless of where you are domiciled and regardless of where this agreement is physically signed, this agreement shall have been deemed entered into at our office located in Fayette County, Georgia, USA, which shall be the exclusive jurisdiction for resolving disputes related to this agreement. This agreement shall be interpreted and governed in accordance with the laws of the State of Georgia, USA. This engagement letter is contractual in nature and includes all the relevant terms that will govern the engagement for which it has been prepared. The terms of this letter supersede any prior oral or written representations or commitments by or between the parties. Any material changes or additions to the terms set forth in this letter will only become effective if evidenced by a written amendment to this letter, signed by all the parties. State(s) returns to be prepared* Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming Armed Forces Americas Armed Forces Europe Armed Forces Pacific The following questions are required. IRS requires you answer the following regarding Form 1099 filing requirements (1099 filing requirements are available on our website.) If these questions are not answered, it will cause delays in completion of the returns and result in additional cost or we will assume you made such payments and choose not to file the required 1099s. (Penalties for failure to file 1099s are from $50 to $530 per copy where each 1099 has 4 copies.)*Yes, I have paid $600, or more, for subcontractors, legal or any other services during 2018.No, I have not paid $600 or more for the above described services.*Yes, I have or will issue Form 1099 to the attorneys and/or individuals that were paid $600, or more, for services in 2018I would like SCA to assist in filing these forms.Release of tax information*Yes, I authorize the release of data and completed documents upon written, electronic or verbal instruction to my designee.No, only release my information to the undersigned or transmit them by common carrier or courier.Acknowledgement* Check here to acknowledge you have read and accepted the above letter. Type your name here.*Please type the company's name*Signature(s)* If you have a touch screen, you can sign above with a pen or stylus. Otherwise your mouse may be used to complete your signature. Use the circled arrows to erase a signature and start over.