Introduction
When applying for a mortgage, an SBA loan, or even certain lease agreements, you may be asked to submit a CPA comfort letter. This letter, issued by a Certified Public Accountant (CPA), confirms specific financial information such as self-employment status, income, or tax filing history.
While not widely known outside financial or legal circles, a CPA comfort letter plays a critical role in offering third-party verification of financial details.
At Entelyglobal, we understand the growing demand for reliable, professional, and compliant documentation — which is why we offer a customizable CPA comfort letter template to streamline your financial communications.
What Is a CPA Comfort Letter?
A CPA comfort letter is a formal letter written by a Certified Public Accountant to validate certain financial or tax-related facts about an individual or business. While it doesn’t provide full audit-level assurance, the letter serves as a third-party verification tool for specific information provided by the client.
What Does a CPA Comfort Letter Typically Include?
A CPA comfort letter may confirm:
- Self-employment status of an individual
- Annual income based on prior tax filings or profit and loss statements
- Filing status and history with the IRS
- Existence of a business entity (LLC, S-Corp, etc.)
- Compliance with tax obligations (on-time filing and payment of taxes)
- Verification of financial statements prepared by the CPA (without audit)
Important Note on Limitations
A CPA comfort letter does not:
- Offer audit or assurance-level guarantees
- Make forward-looking financial predictions
- Confirm loan repayment ability or creditworthiness
- Include speculation about future income
CPAs must adhere to the AICPA guidelines and ethical standards, meaning they can only validate facts based on documentation and client representations — not make unverifiable statements.
When and Why You Need a CPA Comfort Letter
Here are some of the most common situations where this document becomes essential:
1. Mortgage Applications (especially for self-employed individuals)
Mortgage lenders often require third-party confirmation of income and tax filing status. For self-employed individuals or small business owners, a CPA comfort letter can support the loan application process by verifying:
- Business ownership
- Income trends
- Tax compliance
2. Small Business Administration (SBA) Loans
To qualify for SBA financing, lenders may ask for verification that your business meets certain tax or financial criteria. A CPA comfort letter can act as a supplementary document to provide added confidence to the lender.
3. Investor or Partner Due Diligence
When investors or partners are evaluating your business, they may ask for CPA-backed confirmation of financial data. A comfort letter can verify the accuracy of self-prepared reports or financial summaries without a full audit.
4. Lease or Rental Applications
Commercial landlords may request a CPA comfort letter to confirm a tenant’s financial ability to meet monthly obligations, especially if the applicant is self-employed.
5. Immigration or Visa Documentation
Certain visa applications require income and employment verification. A CPA letter is often considered credible evidence for proving financial stability.
6. Grant or Funding Applications
Nonprofit organizations or startups applying for government grants or venture capital funding may use CPA comfort letters to support financial claims made in their proposals.
7. IRS or Legal Compliance Needs
In legal or IRS-related matters, a CPA letter may be used to demonstrate compliance with tax laws or confirm historical financial events, if requested by an attorney or court.
Key Elements of a CPA Comfort Letter Template
To ensure clarity, compliance, and professional integrity, a CPA comfort letter must follow a structured format. At Entelyglobal, our CPA comfort letter template includes the following key components:
1. CPA’s Letterhead & Contact Information
The letter should be printed on the CPA’s official letterhead and must include their name, license number, firm name, phone number, and email address. This adds legitimacy to the document.
2. Date and Recipient Information
The letter should clearly state the date of issuance and be addressed to the intended party (e.g., mortgage lender, bank, landlord).
3. Client Authorization
It should be clearly stated that the client has authorized the CPA to release specific information. This protects both the client and the CPA from any breach of confidentiality.
Example:
“This letter is provided with the express permission of [Client Name] and is intended solely for use by [Bank Name / Lender Name] in connection with [Purpose].”
4. Statement of Purpose
The letter should describe its intended use — whether it’s for a mortgage, SBA loan, lease, etc. This ensures the letter is not misused for other purposes.
5. Financial Verifications
Here, the CPA will confirm only factual data they can verify, such as:
- Dates of tax return filings
- Business income based on reviewed statements
- Self-employment status (based on Schedule C or K-1s)
- Business existence and type (LLC, Sole Proprietorship, etc.)
6. Limitations Disclaimer
This is a crucial section to protect the CPA from liability. It states that the letter:
- Does not constitute an audit or assurance
- Relies on client-provided documentation
- Is valid only as of the date issued
Sample wording:
“This letter is not intended to and does not provide any opinion or assurance on the financial position of the client and should not be construed as such.”
7. Signature of the CPA
The letter must be signed by a licensed CPA, with credentials (CPA number and issuing state) clearly mentioned.
Example of a Simple CPA Comfort Letter (Excerpt)
[CPA’s Letterhead]
Date: March 1, 2025
To: [Lender Name or Institution Name]
Re: Verification of Self-Employment and Income – [Client’s Full Name]
This letter is issued at the request of our client, [Client Name], to confirm the following:
- [Client Name] has been self-employed as a [Profession, e.g., freelance graphic designer] since [Year].
- We have prepared and filed their tax returns for the years 2022, 2023, and 2024.
- Based on these records, the reported gross income for 2023 was $105,000.
- The client has filed all federal and state tax returns in a timely manner.
This letter is based on information provided by the client and is not intended to be an assurance or audit opinion.
Sincerely,
[CPA Signature]
[CPA Name, CPA License Number]
[CPA Contact Info]
Conclusion
A CPA comfort letter is more than just a formality — it’s a trusted document that can significantly impact your financial or business opportunities. Whether you’re applying for a mortgage, SBA loan, or investor funding, this letter offers the reassurance that your financial statements and status are accurate and compliant.
At EntelyGlobal, we offer professional CPA services and provide ready-to-use comfort letter templates tailored to your needs. Our expert team ensures that all documentation complies with legal and financial standards, giving both you and your recipients peace of mind.
Call to Action
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