Have you ever tried to do your own taxes? If so, you’re probably aware that it’s a pretty complicated process. And if you’re self-employed or dealing with additional sources of income, it can be even more complicated. That’s why it’s essential to ensure that your finances are in order and that no errors have been made when filing your taxes. However, what if there’s an audit involved?
Minimise your costs in the event of an audit
Tax audit insurance is a policy that covers the costs of an audit and any penalties or interest that arise from your tax return. It’s important to note that Tax Investigation Insurance does not protect you against criminal charges or other legal action, so it’s best to consult with a professional before hiring one.
The cost of hiring an accountant depends on the complexity of your taxes, but generally speaking you can expect to spend anywhere between $100 and $500 per hour. Tax auditors charge by the hour as well, so even if they find nothing wrong with your return it could still be costly to resolve these issues in court. With this in mind, having some protection against these costs may make sense for small business owners who cannot afford expensive legal fees or do not want their reputation affected by negative publicity surrounding an audit process.
Types of tax audit insurance and the duration of cover.
Tax Investigation Insurance can be extended to cover the cost of an appeal, a tax dispute or a tax investigation.
- An appeal is when you disagree with the decision made by HMRC and ask them to look at your case again. Tax Audit Insurance can be extended up until your appeal is settled.
- A tax dispute is when you don’t agree with HMRC’s view on some aspect of your tax affairs, so you challenge it through the courts. Tax Audit Insurance can be extended up until this process has been completed and the final outcome has been reached.
- A tax investigation is where HMRC suspects something may not have been done correctly in your business. They want to investigate further before deciding whether to prosecute for fraud or evasion (or other criminal offences).
Are there additional benefits available with tax audit insurance?
Tax audit insurance is a great option for your business, but what about other aspects of your financial life? We have added benefits to our tax audit insurance policy that can be very useful to you.
- Additional cover for other tax issues: If you are audited by the IRS or another taxing authority and additional taxes are assessed related to the returns filed with our tax audit insurance, we will reimburse you up to $100,000 in legal fees and costs associated with resolving the issue (excluding fines).
- Additional personal asset protection: If your assets are seized by an outside creditor, such as a lawsuit or divorce settlement, we’ll reimburse up to $50,000 per year toward lost income and living expenses while these issues are resolved—no matter where they occur in the world!
If you’re self-employed or dealing with additional sources of income, it’s certainly worth considering. Tax audit insurance can help you mitigate the costs of a tax audit, avoid penalties and interest charges and even avoid the risk of a tax investigation if you qualify for one.
In conclusion, insurance is a great way to minimise your tax audit costs and protect yourself from the unexpected. If you’re self-employed or dealing with additional sources of income, it’s certainly worth considering.