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advocacy community education
Attestation Engagements (SSAE).
Attesting to client information without
performing attestation services in
accordance with the SSAE constitutes
a violation of professional standards
and has licensure implications.
Recently, other types of third-party
information requests have emerged.
Examples include:
Requests from adoption agencies
and foreign countries for a CPA letter
confirming the client's self-employ-
ment, citizenship status, and the finan-
cial stability of the client's business;
Requests from health insurance
providers for a business verification
statement from a CPA, CMA, licensed
tax consultant, or attorney attesting
that the listed, eligible employees
worked the minimum hours required
under state law, and that the business
is a bona fide business qualifying as a
small employer under state law and
health plan underwriting guidelines;
Requests from state taxing authori-
ties for a letter from a CPA, enrolled
agent, or attorney certifying that the
taxpayer and the "authorized repre-
sentative" have reviewed the books
and records of the taxpayer and deter-
mined that there is no use tax due or
to report.
In response to such requests, CPAs
should remind clients that tax returns
are prepared based on their informa-
tion and representations which are nei-
ther audited nor verified. Inform clients
that assurances cannot be provided to
a third party about information in tax
returns or with regard to any other
client matters.
Although, from a risk control perspec-
tive, it is preferable to avoid confirming
any client information to a third party,
refusing to provide any information may
alienate clients. As an alternative, CPAs
could send a letter to the third party
confirming only that the firm prepared
the applicable income tax returns for
clients to meet their tax-filing obliga-
tions. If the individual income tax
returns were filed electronically on the
client's behalf, the letter also could
state that the client provided the CPA
with a signed copy of IRS Form 8879,
which includes a declaration that the
taxpayers have examined a copy of
their electronic individual income tax
return and accompanying schedules
and statements for that tax year and
declared that it is true, correct and com-
plete to the best of their knowledge.
Ideally, clients should provide any
requested information directly to third
parties. If a client asks the CPA to
send a copy of his or her tax return to
a third party, the CPA must obtain the
If electronic tax returns are prepared, signed copies of IRS Forms 8878 and 8879 (as applicable) must be retained for the CPA's records and as part
of the working paper file for the client engagement.
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