What it is
Advice on an entity choice, a sale or a restructuring depends on facts the client provides and on the law at one point in time. The engagement letter should say so, and say what the firm will deliver and when.
This letter covers the question, the taxes in scope, the deliverable and date, what is excluded, how the facts and law are treated, the standards the firm follows, who may rely on the advice, and the fees.
When to use it
- Before advising on entity structure, a transaction or a compensation design.
- When the client wants a written memo and a call as one fixed deliverable.
- When return preparation and implementation are separate engagements.
What’s inside
- Scope table with question, taxes, deliverable and exclusions
- Basis-of-advice terms: facts relied on, law as of the date, no duty to update
- Standards, reliance and legal advice paragraphs
- Fee table with estimates and scope-change terms
Standard cited
This template follows SSTS / Circular 230. It is written in our own words, except for phrases the standard requires the document to contain, with [bracketed placeholders] for client details, amounts in USD and dates as MM/DD/YYYY. Check it against the current standard and your firm’s methodology before use.
Questions
Does the firm have to update advice when the law changes?
Not unless the engagement says so. The letter states that advice is based on law in effect on the delivery date and that updates are a separate request.
Why does the letter say oral advice is preliminary?
Because a client can act on a call before the memo is final. The letter makes the written deliverable the advice.
Which standards apply?
The AICPA Statements on Standards for Tax Services and Treasury Circular 230 apply to practitioners who are bound by them. The letter refers to both and explains that they can require the firm to decline or disclose a position.
Related templates
- Tax Controversy Representation Engagement Letter
- Consulting Services Engagement Letter (CS 100)
- Tax Return Preparation Engagement Letter
- Engagement Scope Change Letter (Addendum)
Last updated 11/05/2026. All free templates.