Tax Audit Insurance can cover certain professional fees reasonably and necessarily incurred in responding to an insured tax audit.

What professional fees can be covered? #

Depending on the policy, eligible fees can include those charged by:

• Accountants.
• Registered tax agents.
• Lawyers.
• Bookkeepers.
• Specialist professional advisers.

The insurer can require fees to be reasonable and directly related to the insured audit.

What types of audits can be included? #

Depending on the wording, cover can extend to matters involving:

• Income tax.
• GST.
• Business Activity Statements.
• Fringe Benefits Tax.
• PAYG obligations.
• Payroll Tax.
• Land Tax.
• Stamp Duty.
• Superannuation-related reviews.

Not every policy covers every authority or tax.

Are reviews and investigations included? #

Potentially.

Some policies define the insured event broadly enough to include specified:

• Audits.
• Reviews.
• Investigations.
• Examinations.
• Enquiries.

The exact definition should be checked.

Is there a policy limit? #

Yes.

Tax Audit cover normally has a specified limit or sublimit.

Once eligible professional fees reach that amount, further expenses may need to be paid by the business.

Does an excess apply? #

It can.

The excess and limit are set by the individual policy.