What is it for?
If a State or Federal revenue authority audits your tax return or compliance obligation, you might consider hiring external accountants and other professionals for help.
Tax audit insurance can cover certain costs associated with responding to an official tax audit.
Why it matters
Dealing with a tax audit can be overwhelming, time- consuming, and expensive, even if you're not at fault. Tax audit insurance offers a practical way to handle the costs associated with an audit.
It covers expenses for accountants or other professionals hired to assist during the audit process. The duration of an audit varies based on your business size, breadth and detail of the request, as well as quality of record- keeping, ranging from days to months.
How likely am I to get audited?
The ATO now employs advanced data matching methods, making it simpler for them to uncover inconsistencies between tax returns and information obtained from various sources like government agencies, health funds, banks, and other businesses.
Tax audits and investigations may not only be conducted by the ATO but also by multiple State and Federal Government bodies, meaning you're accountable for the expenses associated with providing necessary information.
Even a basic inquiry can demand significant time and resources to address, potentially resulting in substantial costs for small businesses.
Did you know?
The ATO conducts 2 million taxpayer audits each year...
The ATO frequently encounters four common mistakes in small business tax returns:
- Poor record keeping
- Failure to declare all income
- Misunderstanding leading to errors
- Omitting private use of business assets or funds.
Additionally, the ATO monitors social media platforms to compare reported income with displays of wealth, identifying inconsistencies.
What’s covered?
The policy covers audits and reviews of
Capital Gains Tax • Income Tax • Payroll Tax • Workers Compensation • Fringe Benefits Tax • Land Tax • Workers Compensation • Stamp Duty • BAS/GST Compliance • Superannuation Guarantee and more...
Most common claims in 2024
1
Income Audits
2
Work-Related Expense Audits
3
Rental Property Audits
4
GST Audits
5
FBT Audits
6
Superannuation Audits
7
Transfer Pricing Reviews
8
International Tax Audits
9
Small Business Audits
10
PAYG Withholding Audits
This insurance is issued by AuditCover Australia Pty Ltd (ABN 63 638 872 634, AFSL 535509) on behalf of the insurer HDI Global Specialty SE (ABN 58 129 395 544, AFSL 458776). Distributed by Mega Lines Pty Ltd T/As Megalines (ABN 68 122 341 191, AFSL 495082).