When you’re self employed, your income story lives in tax returns, bank statements, and financial statements—not in neat pay stubs or a single paycheck. A well-structured CPA letter translates that story for third parties—lenders, landlords, insurers, and others—so they can quickly evaluate your creditworthiness and compliance. This guide breaks down a practical, professional CPA letter format for self-employed clients, including must-have elements, wording tips, and common pitfalls to avoid. You’ll also find a mini-template and specific guidance for a CPA letter for apartment rental.
This article is educational only and not legal, tax, or accounting advice. Always engage your own Certified Public Accountant for tailored guidance.
Why the Format Matters (and What It Must Do)
The job of the letter
A CPA letter should verify facts—not oversell assurance. Its role is to summarize the client’s self-employment activity and income using verifiable sources (filed tax returns, cash flow statements, balance sheets, and bank statements) with clear compliance and accuracy statements.
Who reads it, and why they care
- Mortgage lenders and loan underwriters (purchase, home mortgage, refinancing, business loan)
- Landlords and property managers (income verification during background checks)
- Insurers (certain insurance claims related to loss of income)
- Government or program administrators (documentation for lending or assistance)
Clarity, consistency, and traceability to source documents are what readers rely on to make decisions about lending, leasing, or coverage.
Use Cases Where a Clean Format Is Critical
Lending & mortgages
- Home loan, mortgage, and refinancing programs
- Small business loan underwriting and lines of credit
- Cross-checks against tax returns, YTD financial reporting, and IRS transcripts
Landlords & rentals
A CPA letter for apartment rental helps translate variable self-employment income into a one-page summary a property manager can understand—without sharing unnecessary pages of statements.
Essential Elements of a CPA Letter
What to include every time
- Letterhead & identity: CPA firm name, address, license/registration, contact info
- Client identity: Legal name(s), entity name, ownership and structure (e.g., sole proprietor, LLC)
- Period covered: Typically last two tax years + YTD through a stated date
- Income basis: Filed tax returns (income tax), YTD financial statements (P&L, balance sheets, cash flow statements), and, if applicable, bank statements
- Scope & limitations: Not an audit/review; no assurance beyond the information summarized
- Standards referenced: GAAP and, if relevant, International Financial Reporting Standards
- Purpose & recipient: Lending, leasing, program review—name the institution where possible
- Signature: Wet ink or qualified digital signature; date of issuance
Optional, but often helpful
- Brief context for year-over-year changes (seasonality, one-time expenses)
- Liquidity snapshot (high-level assets or reserves, when appropriate)
- Statement on firm safeguards (confidentiality practices; whether the firm is insured for E&O)
The CPA Letter Format for Self-Employed (Structure & Wording)
1) Header Block
- Firm letterhead (logo, address, license number, phone, email)
- Date (unambiguous format)
- Recipient name, title, and organization (or “To Whom It May Concern” if unknown)
Tips
- Produce to PDF with embedded fonts.
- Use one-page if possible; attach schedules only when requested.
2) Opening Identification Paragraph
- State the CPA’s license and jurisdiction (e.g., state board of accountancy).
- Identify the client: legal name, entity type (LLC, sole proprietor), ownership percentage, years in operation.
Tips
- Keep this section factual and brief—no marketing language.
3) Basis of Verification
- List documents relied upon: last two years’ tax returns, YTD P&L, balance sheets, cash flow statements, and, if requested, bank statements.
- Specify the period end dates and note whether figures are compiled from client records.
Tips
- Align totals with what’s filed with the IRS; mention if pending adjustments exist.
- Clarify whether any material departures from GAAP/IFRS exist (avoid unnecessary jargon).
4) Income Summary
- Present approximate net income for each tax year and YTD.
- If needed, explain seasonality or large one-off items (e.g., equipment purchase, contract prepayment).
Tips
- Don’t imply forward-looking guarantees.
- When underwriting requires it, show averages across multiple years.
5) Purpose, Scope & Limitations
- “This letter is provided solely to assist [Recipient] in evaluating [loan/lease/claim/application]. It is not an audit, review, or examination, and no opinion or assurance is expressed beyond the information presented.”
- Reference the applicable framework (GAAP/International Financial Reporting Standards) and professional ethics.
Tips
- Use standard, measured language to avoid confusion during background checks.
- If the reader is a landlord, say so explicitly to narrow reliance.
6) Signature & End Matter
- Typed name, credential (“CPA”), firm name
- Manual or qualified digital signature
- Optional: note that the firm is insured (professional liability/E&O)
Tips
- Keep footer policies minimal (confidentiality, “confidential—do not distribute”) to avoid clutter.
Special Section: CPA Letter for Apartment Rental
What landlords actually want
- Proof of ongoing self-employment and time in business
- High-level income figures consistent with filed tax returns
- Optional liquidity context to demonstrate ability to pay the bill (rent) reliably
Sample request language to give your CPA
“Please prepare a one-page CPA letter for apartment rental confirming my self-employment, entity structure (LLC/sole proprietor), years in operation, and approximate income for the last two tax years plus YTD, based on filed returns and current financial statements.”
Compliance, Confidentiality, and Risk Controls
Keep it compliant
- Match names and totals across all documents (letter, tax returns, statements).
- Avoid overstating assurance—no guarantees of repayment or eligibility.
- Document retention and confidentiality practices should be in place.
IRS & tax law awareness
- The letter should reconcile with IRS-filed numbers.
- If an IRS audit or amended return is pending, disclose that succinctly.
Protect privacy
- Share only what the recipient requests.
- Use secure transmission (client portal or encrypted email).
Professional protections
- Many firms carry professional liability; if requested, reference E&O coverage without disclosing policy details.
Common Pitfalls
Inconsistent data across documents
Problem: Letter totals don’t match tax filings or YTD reports.
Fix: Reconcile first. If timing differences exist, add a one-line explanation.
Scope creep & implied guarantees
Problem: Language that reads like an audit opinion.
Fix: Include explicit limitations and the purpose of use.
Unclear periods and dates
Problem: Underwriters can’t tell which months/years the figures cover.
Fix: State period ends (e.g., “YTD through August 31, 2025”).
Over-disclosure
Problem: Attaching every bank page increases risk and review time.
Fix: Provide summary-level verification unless full statements are specifically required.
Mini-Template
Copy this structure for your CPA’s draft
[CPA Firm Letterhead]
Date: [Month Day, Year]
To: [Recipient Name/Organization]
Re: Self-Employment Income Verification – [Client Name / Entity]
I am a Certified Public Accountant licensed in [State/Jurisdiction]. Our firm has provided accounting and tax services to [Entity Legal Name], a [entity type; e.g., LLC/sole proprietorship] owned by [Owner Name], since [Year].
Based on our preparation/review of tax returns for [Tax Years], together with our review of year-to-date financial statements (profit and loss, balance sheets, cash flow statements) through [As-of Date], and selected bank statements as requested, the business reported approximate net income of $[X] (20XX) and $[Y] (20XY). Current activity is generally consistent with prior periods, subject to normal business fluctuations and expenses.
This letter is provided solely to assist [Recipient] in evaluating [purpose: loan application, mortgage, refinancing, business loan, or CPA letter for apartment rental]. It does not constitute an audit, review, or examination, and no opinion or assurance is expressed beyond the information presented. Figures are presented in accordance with [GAAP / International Financial Reporting Standards], as applicable.
[CPA Name], CPA
[Firm Name] | License [####] | [Address] | [Email/Phone]
(Optional: Our firm maintains professional liability coverage.)
Pro tip for rentals
If your landlord asks for specific phrasing, have the subject line say: “CPA letter for verification of self employment” or “Income verification for residential tenancy.”
Formatting & Delivery Best Practices
Make it reader-friendly
- One-page narrative; avoid jargon.
- Clear headings, bullet points sparingly.
- Export to PDF; avoid editable formats for official delivery.
Digital signatures
Use a reputable e-sign solution or verified certificate. Some recipients still prefer wet signatures—confirm expectations.
Keep a tidy audit trail
- Save versioned PDFs with date stamps.
- Note who received the letter and when.
Update cadence
For active lending or leasing processes, be ready to refresh YTD figures if the review drags on.