An engagement letter sets out what a tax or accounting firm has agreed to do for a client and what it has not. Typical contents include the returns or services covered, the tax years, the client's responsibility for providing complete and accurate information, fees and billing terms, deadlines, record retention, and how the relationship can end.
Engagement letters protect both sides. They reduce misunderstandings about scope, support the firm if a dispute arises, and give clients a clear picture of what to expect. Many firms now send engagement and fee letters for electronic signature from the same system where they manage the engagement, so the signed version is attached to the client record rather than lost in email.