Attest Letters

BY LAWRENCE MAGILL

With all of the mortgage refinance activity of the past year, I have received numerous calls from mortgage lenders requesting letters attesting to my tax clients’ past and future income. When I explain that having prepared a tax return for our mutual client I cannot write the letter—with or without the client’s permission—the reaction I often receive is indignation. Apparently, there are CPAs who are writing these letters, and the caller wonders why I can’t “get with the program.”

I believe this type of letter attests to a client assertion, which requires I adhere to the standards for an attestation engagement. Notwithstanding adherence to professional standards, the nature of the assertion often is unsupportable and not one I would provide an attestation to. If other CPAs are receiving similar requests, they need to be aware these letters are subject to professional standards.

Lawrence Magill, CPA
Sarasota, Florida

Editor’s note: You are absolutely correct. If the mortgage broker and lender really want an attest report from a CPA, then the CPA has an obligation to perform that engagement and follow the appropriate professional standards.

Lenders usually ask for as much assurance as they can get—without knowing the cost or consequences. Typically, once the CPA explains what this would entail, they quickly back off. Most of the time, a simple letter from the CPA (with the client’s agreement), acknowledging the income reported to the broker or lender is the amount reported to the IRS on the tax return, will suffice.

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100th ANNIVERSARY

Black CPA Centennial, 1921–2021

With 2021 marking the 100th anniversary of the first Black licensed CPA in the United States, a yearlong campaign kicked off to recognize the nation’s Black CPAs and encourage greater progress in diversity, inclusion, and equity in the CPA profession.