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Corporate Tax Services Agreement

Dear client:

Re:       2010 Corporate Income Tax Return Preparation Agreement

We appreciate the opportunity of working with you and advising you regarding your federal and state corporate income taxes. In order to ensure an understanding of our mutual responsibilities, we ask all of our clients for whom returns are prepared to confirm the following arrangements:

1. We will prepare your Federal and Oregon state corporate income tax returns and, for an additional fee, any other state or local tax returns (or returns for any other state) you may be required to file. These returns will be prepared from information which you will furnish to us. We will not audit or make any other verification on the data you submit, although it may be necessary to ask you for clarification of some of the information. We may furnish you with questionnaires and/or worksheets to guide you in gathering the necessary information. Your use of such forms will assist in keeping the fee to a minimum. Any other income tax returns must be specifically requested.

2. It is your responsibility to provide all the information required for the preparation of a complete and accurate tax return. You should retain all documents, cancelled checks and other data that form the basis of income and deductions for at least the period of the statute of limitations. You should also retain documents that support items carried over into open years, such as cost basis information, nondeductible IRA's, net operating losses, etc. This information may be necessary to prove the accuracy and completeness of the returns to a taxing authority. You have the final responsibility for the income tax returns; therefore, you should review them carefully before you sign them. If, for some reason, you believe your returns have not been received by the taxing authorities, (i.e., you did not get your refund or they have not cashed your check) then please contact us.

3. Our work in connection with the preparation of your income tax returns does not include any procedures designed to discover defalcations or other irregularities, should any exist. We will render such accounting and bookkeeping assistance as determined to be necessary only for the preparation of your income tax returns.

4. We will use our professional judgment in resolving questions where the tax law is unclear, or where there may be conflicts between the taxing authority’s interpretation of the law and other supportable positions. Unless otherwise instructed by you, we will resolve such questions in your favor whenever possible.

5. The law provides various penalties that may be imposed when taxpayers understate their tax liability. By your signature below, you are confirming to us that unless we are otherwise advised, the travel, entertainment, gifts, and related expenses are supported by the necessary records required under the Internal Revenue Code. If you have any questions as to the type of records required, please ask us for advice in that regard.

The Internal Revenue Service also imposes penalties upon taxpayers and return preparers for failure to observe due care in reporting for income tax returns. If you would like information on the amount or the circumstances of these penalties, please contact us.

6. Your returns may be selected for review by the taxing authorities. Any proposed adjustments by the examining agent are subject to certain rights of appeal. In the event of such government tax examination, we will be available upon request to represent you. However, such representation is not included in your tax preparation fee and we will render additional invoices for the time and expense incurred. Moreover, the taxing authorities may correspond with you regarding your tax return. You agree to timely forward this correspondence to us for review and analysis. Additional fees may be charged depending upon the response required.

7. Returns are processed in the order received and we make every effort to process the returns as quickly as can be done accurately.  If we have requested additional information from you to complete the return and have not received it, the return will be set aside without further processing until we receive the information requested.

8. If we have prepared your income tax returns for the prior year, we will automatically file a federal extension by March 15, if we have not heard from you regarding your taxes or if we have your information but are unable to complete the returns before the initial filing deadline.  A tax return filing extension is only for an extension of time to file, not an extension to pay.  Paying any additional taxes due after March 15 (or any other earlier payment due date) will result in penalties and interest, for which you will be responsible.  If you require assistance calculating the amount of taxes due by January 15, (the 4^th quarter estimated tax payment due date) or March 15, we will assist you with computing those amounts upon request.

9. If you are subject to tax by a jurisdiction other than Oregon or the IRS, such as the City of Portland, Multnomah County or the Tri-Met or Lane Transportation Districts, they do not accept a federal tax extension and you will need to obtain and file a separate tax extension with them, and in most cases make a payment, in order to avoid any underpayment or late payment penalties and interest.  In some instances, the late-filing penalties can be as high as 50% of the tax.  Extension forms and payment coupons from these taxing authorities can be obtained online or by contacting the agency directly.

10. Our fees are based upon a combination of our standard hourly rate schedule for the type of forms required to be filed, the time incurred to prepare an accurate and complete return, and the relevant tax issues associated with your return plus out of pocket expenses. Our minimum fee is $500 for the corporate income tax return. We require a deposit of that amount at the time we begin preparation of your tax return. The remaining balance will be billed to you. All invoices are due and payable upon presentation. Unpaid invoices are subject to a 1% late fee ($5.00 minimum) after 30 days. Costs to collect, including reasonable attorney’s fees, will be added to any outstanding invoices. We reserve the right to stop work for non-payment and shall not be liable to you for any damages that occur as a result of ceasing to render services.

11. The IRS imposes penalties for failure to make timely contributions to your IRA, SEP, KEOGH or other retirement plans. Moreover, excess contributions or required distributions are also subject to penalties and other taxes. You acknowledge responsibility to make such contributions and distributions as required by IRS regulations.

12. Wages to family members in the conduct of an active trade or business are required to be commensurate with the activities performed, must be paid, and must be reported on form W-2 and other payroll reports. You acknowledge that wages paid and deducted on the return are for services performed at reasonable wages.

13. In the event our fees remain unpaid for more than 60 days, we reserve the right to discontinue our work on your account. Your continued non-payment of fees acknowledges your responsibility for any additional taxes, penalties, interest or other costs associated with the non-filing of any tax returns.

14. If any dispute arises among the parties hereto, the parties agree to first try in good faith to settle the dispute by mediation administered by the American Arbitration Association under its Rules for Professional Accounting and Related Services Disputes before resorting to litigation. The costs of any mediation proceeding shall be shared equally by all parties.

15. We will not be rendering any tax services that are not covered by this agreement.  If you do not accept the above conditions, we are unable to provide any tax compliance and consulting services.  If you have any questions regarding anything in this letter, or disagree with the terms, please contact us immediately so that we may resolve any issues in advance of the performance of services.  A copy of this engagement letter is available on our website as well.

If the foregoing fairly sets forth your understanding, please sign in the space indicated. Thank you for your trust in our professional tax preparation services.

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