If you have been asked to provide a CPA letter, you may be wondering what it is, who can prepare one, what information it should contain, and when you actually need it.

A CPA letter is generally a written statement prepared by a Certified Public Accountant (CPA) to confirm or explain financial, accounting, or tax-related information about an individual or business. The exact format and information included can vary depending on the purpose of the letter and the requirements of the organization requesting it.

For U.S. residents and businesses, a CPA letter may be requested by a lender, government agency, business partner, attorney, immigration professional, landlord, or another organization that needs professional confirmation of financial information.

In this guide, we explain what a CPA letter is, when you may need one, what it typically includes, and how to request one from a qualified CPA.

What Is a CPA Letter?

A CPA letter is a formal letter prepared and signed by a Certified Public Accountant to communicate or verify certain financial information.

Unlike a tax return, a CPA letter is generally a supporting document rather than a tax form. It may confirm information that the CPA has reviewed or is able to state based on the records and professional services provided.

For example, depending on the circumstances, a CPA letter might address:

• Income or earnings

• Self-employment income

• Business ownership

• Business activity

• Financial information

• Tax return preparation

• Accounting records

• A company's financial position

• Information relevant to a loan or other financial application

The CPA should only make statements that are appropriate and supported by the information available to them. A CPA letter should not be treated as a substitute for an official IRS form or notice when a specific government form is required.

Is a CPA Letter an Official IRS Form?

No. The term CPA letter does not refer to one universal IRS form.

The IRS issues its own notices, letters, forms, and instructions for specific tax matters. For example, the IRS may send taxpayers notices when it needs additional information, wants to verify a tax return, or has questions about reported information.

Therefore, if someone asks you for a CPA letter, it is important to determine exactly what they need. They may be requesting a professional letter from your CPA rather than an IRS-issued document.

If the request specifically refers to an IRS notice or letter, follow the instructions on that IRS correspondence rather than assuming that a CPA letter will satisfy the requirement.

Why Would Someone Need a CPA Letter?

There are several situations in which an individual or business may be asked for a CPA letter.

1. Verifying Self-Employment Income

Self-employed individuals may have different types of income documentation than traditional employees.

A lender or other organization may request a CPA letter to help document a person's business activity or income. The CPA may be able to confirm information based on the accounting and tax records they maintain or have reviewed.

However, the requesting organization ultimately determines what documentation it will accept.

2. Supporting a Loan or Mortgage Application

Financial institutions may request additional documentation when evaluating a borrower.

For a business owner or self-employed applicant, a CPA letter may be requested alongside tax returns, financial statements, bank statements, or other records.

A CPA letter does not automatically guarantee loan approval. The lender decides what documentation is required and whether the information provided meets its underwriting standards.

3. Confirming Business Ownership

A business owner may need documentation confirming their ownership or involvement in a company.

Depending on the situation, a CPA may be able to provide a letter confirming information reflected in the accounting records or tax documents they handle.

The letter should accurately describe the CPA's relationship with the business and the basis for any statements made.

4. Providing Financial Information to a Third Party

Businesses sometimes need to provide financial information to another party, such as a potential partner, investor, attorney, or other professional.

A CPA letter can sometimes serve as supporting documentation when the recipient wants information communicated by an independent accounting professional.

5. Addressing Tax or Accounting Questions

A CPA may also prepare a letter explaining certain tax or accounting information when appropriate.

However, if the IRS has specifically requested information, the taxpayer should follow the instructions in the IRS notice. IRS correspondence can have specific response requirements and deadlines.

What Does a CPA Letter Usually Include?

There is no single required format for every CPA letter. Its contents depend on the purpose of the request.

A professional CPA letter may include:

• The CPA firm's name and contact information

• The date of the letter

• The recipient's name or organization

• The client's name

• The purpose of the letter

• Relevant financial or business information

• The period or tax year covered

• A description of the information reviewed, when appropriate

• Any necessary limitations or qualifications

• The CPA's name, credentials, and signature

The CPA should tailor the letter to the actual request rather than using a generic statement that could be misleading or incomplete.

What Information Can a CPA Verify?

The information a CPA can verify depends on the CPA's professional relationship with the client and the records available.

For example, a CPA may be able to address information related to:

• Tax returns they prepared

• Accounting records they maintain

• Business income reflected in financial records

• Business ownership information supported by records

• Financial statements

• Certain tax or accounting information

A CPA should not confirm information they cannot reasonably support.

This is particularly important when a third party is relying on the letter to make a financial or business decision.

What Documents Might You Need to Provide to Your CPA?

Before preparing a CPA letter, your accountant may need documents that support the information being discussed.

Depending on the purpose, these could include:

• Federal and state tax returns

• Profit and loss statements

• Balance sheets

• General ledgers

• Bank statements

• Payroll records

• Business formation documents

• Invoices or income records

• 1099 forms

• W-2 forms

• Other relevant accounting records

Your CPA may request additional documentation depending on the specific letter and the information you want confirmed.

Providing complete and accurate records can make the process more efficient and help your CPA determine what can appropriately be included in the letter.

CPA Letter vs. Tax Return: What's the Difference?

A tax return is an official tax filing submitted to a tax authority, such as the IRS.

A CPA letter is a separate written communication prepared by a CPA.

For example, a tax return reports information for a particular tax year, while a CPA letter may be used to explain or confirm selected information for a specific third party.

The two documents serve different purposes and should not automatically be considered interchangeable.

If an organization specifically asks for a tax return, providing a CPA letter instead may not satisfy its requirements.

CPA Letter vs. IRS Letter: What's the Difference?

These documents are also very different.

An IRS letter or notice is correspondence issued by the Internal Revenue Service. The IRS may send notices for reasons including requesting additional information, verifying identity, correcting a return, or notifying a taxpayer about an amount due.

A CPA letter is prepared by a private accounting professional on behalf of a client or in connection with the CPA's professional services.

For example, the IRS has specific letters used for identity and tax-return verification. Taxpayers receiving such correspondence should follow the instructions and documentation requirements stated by the IRS.

How Do You Get a CPA Letter?

If you need a CPA letter, the first step is to determine exactly what the requesting organization wants.

Step 1: Ask for the Requirements

Ask the recipient:

• Why is the CPA letter required?

• What information must it confirm?

• Who should the letter be addressed to?

• Is there a required format?

• What date or tax year should it cover?

• Are there specific statements the letter must contain?

Getting these requirements before contacting your CPA can prevent delays.

Step 2: Contact Your CPA

Give your CPA the request and any instructions provided by the organization.

If you already work with a CPA, they may have access to the tax returns, accounting records, and other documentation needed to evaluate the request.

If you do not currently have a CPA, you can work with a qualified accounting professional who is able to provide the service you need.

Step 3: Provide Supporting Documents

Your CPA may request financial and tax documents before preparing the letter.

Be sure that the information you provide is accurate and complete. Do not ask a CPA to confirm information that is incorrect or unsupported.

Step 4: Review the Letter

Before submitting the letter, check that the names, dates, tax years, financial figures, and purpose are correct.

If the recipient has specific requirements, make sure the final letter addresses them.

How Long Does It Take to Get a CPA Letter?

The turnaround time varies.

A straightforward request may be completed relatively quickly if the CPA already has the necessary records. More complicated requests can take longer if the CPA needs to review accounting records, tax returns, financial statements, or other documents.

If you have a deadline, tell your CPA about it when making the request.

It is generally better to request the letter early rather than waiting until the day it is due.

How Much Does a CPA Letter Cost?

There is no universal price for a CPA letter in the United States.

The cost can depend on:

• The complexity of the request

• How much information the CPA needs to review

• Whether you are already a client

• The amount of research or analysis required

• The type of letter requested

• The CPA firm's pricing structure

• How quickly the letter is needed

A simple letter based on existing records may require less work than a letter involving detailed financial analysis.

Before starting, ask the CPA about the expected fee and what services are included.

Can Any Accountant Write a CPA Letter?

Not necessarily.

The term CPA refers to a licensed Certified Public Accountant. CPA licensing and regulation are handled at the state level in the United States.

If a requesting organization specifically asks for a letter from a CPA, you should confirm that the professional preparing and signing the document meets that requirement.

It is also important to distinguish between a CPA letter and a general accountant reference letter. The recipient may have specific expectations about who is qualified to sign the document.

What Should You Look for in a CPA Letter?

A professional CPA letter should be:

Accurate: The information should be supported by appropriate records.

Clear: The purpose of the letter should be easy to understand.

Specific: It should address the information actually requested.

Current: Dates and financial information should correspond to the requested period.

Professional: The letter should clearly identify the CPA or accounting firm preparing it.

Appropriately limited: The CPA should clearly communicate any relevant limitations instead of making unsupported claims.

Common Mistakes to Avoid

When requesting or submitting a CPA letter, avoid these common mistakes:

Using a Generic Template Without Checking Requirements

Different organizations may require different information. A generic CPA letter may not meet the recipient's requirements.

Providing Outdated Financial Information

If the recipient asks for current income or financial information, make sure the CPA has the appropriate recent records.

Confusing a CPA Letter With an IRS Notice

An IRS notice and a letter from a CPA are not the same thing. If you received an IRS notice, follow the instructions on that notice.

Waiting Until the Last Minute

CPA firms may need time to review records and prepare documentation. Request the letter as early as possible.

Asking a CPA to Verify Unsupported Information

A CPA should not make statements that cannot be supported by the records or professional work performed.

Frequently Asked Questions About CPA Letters

What is a CPA letter?

A CPA letter is a written statement prepared by a Certified Public Accountant to communicate or confirm certain financial, tax, or business information. The exact contents depend on the purpose of the letter.

Is a CPA letter required by the IRS?

Not generally as a universal document. The IRS has its own forms, notices, and correspondence for specific tax matters. If the IRS requests information, follow the instructions in the particular notice or letter you received.

Can a CPA letter replace a tax return?

Usually, no. A CPA letter and a tax return serve different purposes. If a lender, government agency, or other organization specifically requires a tax return, ask whether it will accept a CPA letter as supplemental documentation.

Can a CPA write a letter verifying income?

A CPA may be able to provide a letter addressing income information when the information is supported by appropriate records and falls within the CPA's professional relationship and services. The recipient determines whether that letter is sufficient for its purposes.

Do businesses need CPA letters?

Not necessarily. A business may need a CPA letter only when a particular third party requests one or when it is useful for a specific financial, tax, or business purpose.

How can I request a CPA letter?

Start by obtaining the requirements from the organization requesting the letter. Then provide those requirements to your CPA along with any supporting financial or tax records they need.

Final Thoughts

A CPA letter can be useful when an individual or business needs professional confirmation of financial, tax, or business information. However, there is no single CPA letter that works for every situation.

The most important step is to understand exactly what the requesting organization needs before asking your CPA to prepare the document. Providing clear requirements and accurate supporting records can help your CPA prepare an appropriate letter and reduce unnecessary delays.