Is signing a liability waiver or service agreement with a tax preparer normal practice?

This is actually very common practice nowadays, especially with larger tax preparation firms. These service agreements serve several purposes - they outline what services will be provided, establish fees, and yes, they do limit liability in certain situations. The liability limitations are mainly there to protect the preparer from being held responsible for issues that aren't their fault - like if you provided incorrect information or didn't disclose everything. However, they can't waive liability for negligence or intentional misconduct on their part. Since your preparer sold his business, the new owners are likely implementing more formal procedures. It's basically a way to set expectations and protect both parties.

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Tax preparer here - yes, service agreements are standard practice in the industry. They protect both parties by clearly establishing expectations. I've been requiring them for all clients for the past 10 years. The sale of the business is likely why you're seeing one now - the new owners are implementing their standard procedures. Most agreements will outline: - Services included - Your responsibilities (providing accurate info) - Preparer responsibilities - Fee structure - Limitations on liability

After my tax guy retired, the new firm made me sign something similar. I read it carefully, signed it, and honestly never thought about it again. Been with them 3 years now with no issues. These agreements are just like the terms & conditions we all click "agree" to online everyday lol.

I'm dealing with something similar right now. My long-time tax preparer retired and the new firm wants me to sign what they call a "client engagement letter" but it's basically the same thing you're describing. From what I've researched, these agreements became more common after some high-profile lawsuits where clients sued preparers for issues that weren't really the preparer's fault. The agreements help clarify who's responsible for what. That said, I'd definitely read it carefully before signing. Make sure it doesn't completely absolve them of responsibility for their own errors or negligence. A fair agreement should protect them from liability when you provide wrong information, but they should still be accountable for their own mistakes. Has your tax guy given you any guidance on what changed since the sale? Might be worth asking him directly about the new policies.

I went through something very similar when my CPA of 15 years sold to a regional chain. The new firm immediately sent me a 4-page "service agreement" that felt more like legal protection than a service contract. After reading through it and doing some research, I learned these agreements became standard practice around 2018-2020, largely due to increased litigation against tax preparers. The COVID-era changes to tax laws also made preparers more cautious about liability. The key things I looked for in mine were: 1) Clear definition of what constitutes "reasonable care" on their part, 2) Specific language about correcting their own errors at no charge, 3) Audit representation clauses, and 4) Data security provisions. My advice? Don't sign anything that makes you uncomfortable, but also recognize that most reputable firms won't work without one nowadays. If the language seems too broad or one-sided, ask for modifications. I successfully negotiated two clauses in mine that were too vague about their responsibilities. The transition from small independent preparers to larger firms definitely changes the dynamic, but it doesn't necessarily mean worse service - just more formalized processes.