Tax investigation insurance is one of the newer risk products in the market that every business and organization should be considering taking up. As the name suggests, it’s all about taking up an insurance cover that safeguards your business against risks associated with tax investigations. This includes tax audits, tax probes, tax enquiries and any other processes along that line. Below, find out what tax investigation insurance is all about, how it works, and how you can get it.
Sourcing an insurance provider
Like with any other insurance product, tax investigation insurance starts with you searching for a credible provider in the market. Due to its nature, this form of insurance is not offered by all insurance companies. In fact, most general insurance companies do not provide it in most cases. Being a highly specialized insurance product, it is only offered by certain firms that mostly deal with accounting insurance and tax related risks. You can search online for a provider or you can make inquiries from tax and accounting firms/organizations.
Securing a cover
There are two ways to acquire a tax investigation insurance cover. One, you can seek a direct over where your company gets insured against the risk. In case you need to tax investigative services, the insurer will compensate you for incurred costs or pay the affiliated company directly. Alternatively, you can get the same benefits by working with a tax accounting firm that has the same form of insurance cover. You don’t get to pay any premiums and instead, you enjoy the cover taken up by the firm you’re seeking services from. That is, their insurer pays them for your costs.
Claiming your cover
Once you have secured a tax investigation insurance cover you can redeem it any time you are engrossed in a tax audit, a tax investigation, and accounting enquiry or even a tax filing. As a business, all you have to do is make a claim and your insurer will make the agreed payment percentage on your behalf. For accounting services providers, they get paid any time they provide the service to their clients; that is as opposed to their clients paying them directly.
Benefits of tax investigative insurance
If you are mulling whether to take up tax investigation insurance or not, this part of the article will explain to you exactly why you should.
- Avoid payment conflicts with clients
For companies that provide tax accounting services to others, this type of cover allows them to receive payment promptly and directly from the insurance company. This sort of arrangement conveniently eliminates payment conflicts between the company and its clients.
- Save on audit costs
For client companies that are seeking the tax audit services, this type of insurance cover helps them to save on costs. Tax audits and tax investigations can cost a lot of money. However, with this cover in place, such companies can get full compensation by just paying thy agreed upon premiums.
- Secure the best accountancy possible during investigation
Lastly, a tax investigation insurance policy allows client companies to enjoy the best professional tax/accounting services in the industry without having to worry about the cost factor.