Tax Audit Insurance is designed to help businesses meet certain professional costs associated with responding to an eligible tax audit, review or investigation.

It may be available:

• As standalone insurance.
• As part of Management Liability Insurance.
• As a section of some Business Insurance arrangements.

What costs can an audit create? #

The tax authority itself does not generally charge a business a fee for conducting an audit.

However, the business can incur substantial professional costs when accountants, tax agents, lawyers or other advisers need to:

• Review records.
• Prepare documentation.
• Respond to information requests.
• Liaise with the authority.
• Represent the business.

What authorities can be covered? #

Depending on the policy, cover can apply to audits by:

• Australian Taxation Office.
• Commonwealth authorities.
• State or Territory revenue authorities.
• Other specified government bodies.

The authorities and types of review included vary between policies.

Does Tax Audit Insurance pay additional tax? #

No.

Tax Audit Insurance primarily addresses eligible professional fees.

It should not be assumed to pay:

• Additional tax assessed.
• Interest.
• Fines.
• Penalties.

Can insurance be arranged after an audit starts? #

Do not assume so.

Known audits, investigations or circumstances existing before cover begins will generally create a significant coverage issue.

Tax Audit Insurance should be considered before an audit or review is known.