There can be a point in your business operation when you will be notified by the Australian Taxation Office (ATO) that you or your office will be subjected to tax enquiry. The subject for tax audits are usually chosen at random. However, there are subjects who are specifically selected based upon the possibility that the submitted tax documents are questionable. Tax enquiry are made to ensure the reliability and truthfulness of the presented tax statements. The process incurs expenses such as for the professional fees, hotel and accommodation expenses of the auditor and others. The individual person or business and institution being subjected to tax audit has to cover for all the expenses. For organizations and individuals who want to avoid financial encumbrances, they would purchase tax audit insurance to protect them financially from the process.
A tax audit insurance is a professional service offered by insurance companies to accountants and their clients to financially protect their business or personal interest in case they would be subjected to tax enquiry.
A tax audit insurance is not mandatory. However, it would be an advantage if the professional or business firm has an expert to assist them professionally and financially especially that tax audit can incur a large amount of money in the process.
With an insurance company with expertise on tax audit, you or your business will be properly assisted all throughout the review. The process can involve investigation, financial enquiries, review and tax audit conducted by ATO and other concerned agencies. The ATO will also check the subject’s tax compliance and tax statements submitted. Insurance companies also provide professional assistance even through the phone. By hiring the services of a tax insurance company, clients can depend on professionals who will assist them thru the enquiry. This promotes peace of mind and confidence on the part of the subject.
The professional services offered by tax audit insurance is suitable for accountants and even by ordinary citizens. For accountants, they need to fill out a form for them to be contacted by representatives from the tax audit insurance company. Non-accountants can just inform their accountant to get contact their insurance company for the process.