Sometimes it is necessary to get back to the basics in order to answer an important question. In this case, it may help to break down the subject into its parts. Almost every individual and business has insurance of some sort. In fact, many people purchase a variety of insurance covers for specific situations – property, health, medical, automobile, liability, and the list goes on.
Insurance is there to pay for unexpected situations that may otherwise be too expensive for the individual or company to pay for on their own. Applying this type of protection to areas such as taxes and investigation/audit is not as common as those already mentioned, but that does not make tax investigation insurance less important.
This insurance is, in fundamental terms, a contract or policy that pays fees when professional representation is needed, should the tax authorities decide to investigate or if there is a dispute with the taxing agency. Basically, the individual or business would pay those professional fees if no cover is in place. Companies such as Accountancy Insurance serve accounting firms that focus on public practice, to make sure that tax-audit insurance works for those professionals.
As mentioned earlier, this type of insurance may not be as common as homeowner insurance or car insurance, but for thousands of accounting firms in Australia and New Zealand, this specialisation is very important – some would even say essential.
Looking a bit more deeply into the subject of tax investigation insurance takes you to yet another organisation that is party to the discussion – the government or taxing agency. Many individuals and businesses feel that the odds of them being investigated or audited are minuscule. Starting from this point, they would argue that paying for such insurance would be an unnecessary expense.
Not Necessarily Random
Some veterans of this industry believe that being investigated is not random but has to do with making mistakes on tax reports, having sections of the report out of the normal range, or engaging in actual fraud. But the recent focus of some taxing bodies has changed, with apparently random investigations occurring more often. This leads to the recommendation that everyone needs to be prepared by putting tax investigation insurance in place.
The cost of some audits and investigations amounts to thousands of dollars. Accounting firms can work with the experts at Accountancy Insurance to make sure that fees are covered should the firm be required to represent a client before the taxing body. This is but one of the plans that can help deliver peace of mind to the professionals whose service may be needed. Other insurance available includes indemnity and management liability.
With a consistent focus on customer service and a veteran’s knowledge of the accounting industry, these insurance specialists tailor their products to the client’s needs. In addition, they maintain strong alliances with tax and accounting organisations. Efficiency in delivery is at the top of the priority list, so the client’s time is kept to a minimum.