Respondents to tax audit or enquiry are randomly picked by the Canadian Revenue Agency or CRA. However, there are also those that are subjected to tax investigation when the government agencies concerned sees the need open the books and tax documents of a particular company. Since almost all companies and individuals are not spared from getting a notification from CRA or a government agency, it would be best to be ready for the moment, especially financially. The person or company subjected to tax investigations are liable to pay for expenditures, fees and charges incurred during the process. The respondent has to pay for the government accountant’s time to check on the tax documents including the transportation and accommodation fees of the team if they need to travel and stay within the office address of the subject. Tax enquiry can last for hours and days so there would be times when accommodation is required for the team. However, if you have tax investigation insurance, the insurance company will cover all the financial needs related to the enquiry. .
Tax audits can happen anytime. It is part of the CRA’s mandate to ensure that companies and individuals are compliant of their tax requirements. With tax audit insurance, you are protected against financial risks.
There are different factors that affect the premium of tax investigation insurance. There are premiums that cover the professional fees payable to those who are involved in the proceedings such as tax advisers, government accountants, solicitors, tax agents and even corporate employees who may be required to participate in the process. Some insurance coverage also includes the travel and accommodation expenses of the team.
Ask for quotation from the insurance company to find out how much you are going to pay for the tax investigation insurance. Provide all the necessary information related to your finances and taxes to ensure that you will get an accurate quotation. With tax audit investigation coverage, you get that peace of mind that your corporate or even personal savings and budget for operations will not be affected by the proceedings.