What a partnership engagement letter should cover.
Who the client is
The partnership is the client, not the individual partners. Address the entity and have the signer confirm they are authorized to engage you on its behalf.
The return and Schedules K-1
Name Form 1065 and the tax year, and say that you prepare a Schedule K-1 for each partner reflecting their share of income, deductions, and credits.
Partners' personal returns
Preparing the partners' individual returns is a separate engagement. Exclude it explicitly, or add it as its own service.
Other exclusions
Bookkeeping, tax planning, audit representation, and amended returns are not included unless separately engaged.
Standard protections
Client responsibilities and reliance, tax position standards, confidentiality under IRC §7216, a limit on liability tied to fees paid, mediation before litigation, termination on written notice, and record retention.
Generate the letter in minutes.
Choose Partnership Income Tax Return, enter the partnership name, the fee, and payment terms. Use the scope notes field for details such as the number of partners, and the excluded services field for anything outside the return. EngageDraft generates a letter that covers the sections above, designed around AICPA guidelines.
Review the output. Edit anything that needs adjusting. Send for e-signature. Your client signs from their device. The signed record is stored in your dashboard.
Sample Partnership engagement letter
This is a complete engagement letter generated by EngageDraft for a two-partner partnership return. Firm, preparer, and client names below are placeholders; the scope, terms, and structure match real output for this engagement type.
Download this sample as a Word document (.docx). No signup required.
Dear Alder & Finch Partners,
This letter confirms the terms of the engagement between Cedarline Tax & Advisory and Alder & Finch Partners for the 2025 tax year. The purpose of this letter is to document the mutual agreement between both parties regarding the services to be performed, the responsibilities of each party, and the terms under which those services will be delivered. The services covered by this engagement are:
- Preparation of the 2025 federal partnership income tax return (Form 1065)
- Preparation of Schedules K-1 for each of the two partners
The completed return and all associated work product will be provided to you electronically for your review prior to filing.
Scope of Services
Partnership Income Tax Return
This engagement covers the preparation of your 2025 federal partnership income tax return on Form 1065. Because Alder & Finch Partners is a two-partner general partnership, this engagement also includes the preparation of a Schedule K-1 for each partner, reflecting each partner's allocable share of income, deductions, credits, and other items for the 2025 tax year. The completed Form 1065 and accompanying Schedules K-1 will be provided to you electronically for your review before the return is filed.
This service does not include the preparation of individual income tax returns for either partner. If either partner requires assistance with their personal return, that service would need to be addressed under a separate engagement.
Services Not Covered by This Engagement
The following services are expressly excluded from this engagement and are not covered by the fee described herein:
- Individual partners' personal income tax returns
- Bookkeeping or accounting services of any kind
- Tax planning, tax advisory, or strategic consultation services
If you require any of these services, please contact Cedarline Tax & Advisory to discuss whether a separate engagement can be arranged.
Client Responsibilities
You are responsible for providing complete, accurate, and timely information and documents necessary for the preparation of your return. Riley Marsh, CPA will rely on the information you provide and will not independently audit, verify, or otherwise examine the underlying data for accuracy or completeness. By proceeding with this engagement, you accept responsibility for the accuracy of all information provided.
With respect to the positions taken on your return, if you request that a position be taken that does not meet the standard of having substantial authority under IRC §6662, you will be advised of that fact. Riley Marsh, CPA will not recommend a position that lacks a reasonable basis and will not prepare a return that reflects a position that you have been advised is improper.
Fees and Payment
The agreed fee for the services described in this engagement letter is $1,500 for the 2025 tax year. Payment is due within 30 days of the invoice date. If your account becomes past due, work on your engagement may be paused until the balance is brought current. Fees for this engagement are not contingent on the outcome or results of the services performed.
Confidentiality
All information you share with Cedarline Tax & Advisory in connection with this engagement will be kept strictly confidential in accordance with IRC §7216, applicable state law, and applicable professional standards. Your information will not be disclosed to any third party without your consent, except as required by law or professional standards. This confidentiality commitment extends to any data that is stored or processed through third-party technology platforms used in the delivery of services under this engagement.
Limitation of Liability
The liability of Cedarline Tax & Advisory to Alder & Finch Partners for any cause of action arising from this engagement is limited to the amount of fees actually paid by you for the specific services giving rise to the claim. Cedarline Tax & Advisory is not liable for any consequential, indirect, or punitive damages of any kind, regardless of the form of action brought or the theory of recovery asserted. This limitation applies in all circumstances and is a material part of the agreement between the parties.
This sample was generated by EngageDraft, including its limitation of liability paragraph. It is a starting point, not legal advice, and has not been reviewed by an attorney. Confirm with your own counsel before use.
Dispute Resolution
Any dispute arising out of or related to this engagement shall first be submitted to mediation before either party may initiate litigation. Mediation shall be conducted in the jurisdiction where Cedarline Tax & Advisory is located, under the rules of a mediator mutually agreed upon by both parties. Both parties agree to participate in the mediation process in good faith before pursuing any other legal remedy.
Termination
Either party may terminate this engagement at any time upon written notice to the other party. In the event of termination, fees for all work completed up to the termination date will be due and payable. Client-provided documents will be returned to you upon receipt of payment for all completed work. Cedarline Tax & Advisory will retain engagement documentation, work papers, and related records for a period of seven years following the termination or completion of this engagement.
Agreement
By signing this letter, you confirm that you have had the opportunity to read and review all of the terms set forth herein, that you have had the opportunity to ask questions before signing, and that you agree to the terms of this engagement as described. This letter constitutes the entire agreement between Alder & Finch Partners and Cedarline Tax & Advisory with respect to the services described herein for the 2025 tax year.
Frequently asked questions
What should a partnership tax return engagement letter include?
The partnership, Form 1065 and the tax year, the Schedules K-1 to be prepared, what is excluded, what the partners must provide, the fee, and how the engagement ends. The sample on this page also covers tax position standards, confidentiality, a limit on liability, and mediation before litigation.
Does a partnership engagement letter cover the partners' personal returns?
No. Form 1065 is the partnership's return. Preparing each partner's individual return is a separate engagement, and the letter should exclude it unless you agree to prepare them. The sample on this page excludes them explicitly.
Does the letter cover Schedules K-1?
It should say so. A Form 1065 engagement normally includes a Schedule K-1 for each partner, and the sample on this page states that it does.
Who should sign a partnership engagement letter?
A partner or other representative authorized to engage you on the partnership's behalf. The letter is addressed to the partnership, and the signer should confirm they have that authority.
How is a partnership engagement letter different from a 1040 letter?
The client is an entity rather than an individual, the scope names Form 1065 and its Schedules K-1, the letter directs responsibilities to the partners collectively, and the foreign account paragraph for individuals is not needed.