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The AICPA has published some very useful guidelines: https://www.cpai.com/Education-Resources/my-firm/Tax-Services/What-accounting-firms-need-to-know-about-CTA?refID= Two key points: "To help reduce the likelihood of claims asserting a failure to advise a client of CTA, consider sending a newsletter or other general client notification letter to all clients informing them of CTA and its reporting requirements. Retain a copy of the newsletter as well as the distribution list. " "Unless specifically engaged to provide CTA assistance under a separate engagement letter, include a provision in all engagement letters, regardless of service, disclaiming a responsibility to do so. A sample provision is provided in this Risk Alert." After reading this, I am going to draft a separate letter notifying my clients of the CTA and the reporting requirements declining to provide any services or advice related to the CTA and it's reporting requirements which I will require my clients to sign in addition to my annual tax authorization/engagement letter.

The escrow amount has nothing to do with it and is confusing you. The sales price is the key factor. Money is held is escrow all the time. It doesn't mean the seller won't get it ever; it just means that some contingency must be met before it is released. In your case, the contingency is the payment of back taxes, which affects the brothers but not your client. He paid $79k and got the property. The brothers will get their share of the proceeds minus the taxes THEY owe. They each received $26,633 in the transaction. It doesn't matter if they used that money to pay their back taxes or to take a cruise.