Tax audit is one of the most dreaded process for tax payers. Tax audit is stressful process which consumes a lot of time and money. IRS randomly selects certain taxpayers for audit or sometimes they might find something missing in the tax returns and ask for more documents or the IRS feels you owe more taxes than you already paid, whatever might be the reason, most taxpayers find the tax audit to be an intimidating and stressful process.
Attending a tax audit involves a lot of costs. There are many professionals like accountants, lawyers, advisors etc. who need to be hired to help you with the process of tax audit. Purchasing a tax audit insurance will help to meet all the professional costs involved in tax audit.
Tax audits take a lot of time to complete. Sometimes they are stretched to a couple of years. With the accounting and law professionals charging fee by the hour, the costs of tax audit spiral out of control. And all the costs of the audit are to be borne by the business or the taxpayer himself, which causes a financial strain. Buying audit protection insurance helps the taxpayers and businesses to cover the professional costs involved in the tax audit. While it cannot reduce the stress, it helps to reduce the financial strain on the business resources.
However, like every other insurance audit protection insurance does not cover all types of audit. It is recommended to go through the fine print of the insurance to know about the exact costs covered by the insurance policy. Pay close attention to the following aspects while getting an insurance
- Read the fine print of the policy document to know about the exact type of audit covered by the insurance policy. There are different types of tax audits and you have to make sure, your audit protection insurance covers them.
- Some insurance policies protect the accountant of the business instead of the business. These policies cover the accountant for human errors and mistakes while preparing the returns. Make sure the business is also covered and all the professional expenses will be met before buying the policy.
- Research on the internet about the different audit protection insurance policies and their premiums. Select a policy with maximum cover and competitive premiums.