SMITH, CONLEY & ASSOCIATES, PC Certified Public Accountants 135 Brandywine Blvd., Suite A, Fayetteville, GA 30214 770-461-1115 ENGAGEMENT LETTER FOR 2015 BUSINESS INCOME TAX SERVICES You are engaging us under the laws of the state of Georgia to prepare your 2015 federal and state income tax returns. Although we may ask for clarifications or for additional data, your returns will be prepared from information you furnish to us without audit or verification in any manner. We are being engaged to render a service to the owner of the business and therefore intend and expect the business owner to unconditionally guarantee payment of our invoice even though rendered in the name of their business. The person signing this letter acknowledges and asserts they have the capacity to bind the company and the owner to this contract. Providing complete and accurate information is your responsibility, and tax laws require specific documentation for travel, entertainment, business use of listed property, charitable contributions, written records of automobile usage and acknowledgements from charitable organizations acknowledging receipt of those in excess of $250 per year, written records of automobile usage and segregation of business/rental repairs, maintenance and supply items from capital purchases/renovations and refurbishments. You assert all information provided to us is supported by any required documentation and segregations are accurate. Our fees for preparation of your federal and state income tax returns are based on our customary charges for these type engagements. Invoices are rendered upon delivery of the returns, and payment is expected at that time, except that prolonged delays in supplying us information may result in partial invoices being tendered as work is completed. Our policy requires suspension of work for overdue accounts until they are paid in full. Tax preparation fees do not include representing you in any tax examination or involvement in any notices you may receive from tax authorities. Fees for those items will be rendered separately at the time of that additional service. Although we work for you and will always interpret unclear regulations in your favor using a “more likely than not” standard, tax authorities impose penalties on taxpayers and return preparers who fail to exercise due care in reporting income and deductions or who fail to disclose participation in certain tax schemes identified as potentially abusive. We insist, and you agree to disclose all such transactions as required and to reimburse us for any penalty assessed against us as a result of your failure to supply us with accurate and complete information. We take every precaution to protect the 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 completion of or transmission of your completed tax returns. PLEASE ANSWER THESE REQUIRED QUESTIONS: 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 1099 Letter WHO MUST FILE FORM 1099? Your business must file a 1099-MISC if you paid any person during 2015: Royalties or Broker Payments of $10 or more, $600 or more in rents, services (including parts and materials), prizes and awards, other income payments, medical and health care payments, crop insurance proceeds, cash payments for fish (or any aquatic life) you purchase from anyone engaged in the trade or business of catching fish, or, generally, cash paid from notional principal contracts to an individual, partnership, or estate; any fishing boat proceeds or gross proceeds of $600 or more paid to an attorney. There are additional 1099 filing requirements for transactions with individuals including forgiveness of debt of any existing or former employee, customer or contractor. You are not required to file a 1099 for payments made to a corporation unless that corporation is composed of attorneys providing legal services for hire. If you have any question regarding whether or not you are required to file, please contact our office because penalties for not filing can be substantial as you can see below: Penalties for failure to file Forms 1099: First-Tier Penalty (failures corrected within 30 days of original due date): $30 per return with a calendar year maximum of $250,000. For small businesses, the calendar year maximum is $75,000. Second-Tier Penalty (failures corrected on or before August 1 of the year in which the original 1099 was required to be filed): $60 per return with a calendar year maximum of $500,000. For small businesses, the calendar year maximum is $200,000. Third-Tier Penalty (failures not corrected or corrected after August 1 of the year in which the original 1099 was required to be filed): $100 per return with a calendar year maximum of $1,500,000. For small businesses, the calendar year maximum is $500,000. Intentional Disregard for filing rules and regulations Penalty: $250 per return not filed. IRS provides a form (W-9) for your supplier or service provider to complete. This form is used for your supplier or service provider to tell you whether they are exempt from 1099 preparation and reporting. 1099 Questions (This section is required) *No I did not have vendor payments that require a Form 1099Yes,based on the above, I am required to file.Chose one of the following options.*IF “YES” did you or will you file all the required Forms?I have not filed the required forms.I would like SCA to contact me to assist in filing 1099sName of Business*Acknowledgement* Check here to acknowledge you have read and accepted the above letter. Type your name here*Signature* 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.