Your clients wait until the last minute…and expect you to meet the IRS deadline. There aren’t enough hours in the day. And when the pressure’s on, it’s easy to make mistakes.
Thousands of tax preparers are insured by CNA Surety. More and more, tax preparers are finding that they need protection against legal action. Even in an unjustified case, the legal fees incurred simply to defend oneself can be staggering.
• An insured mistakenly omitted Form-1099 interest income when preparing a tax return for a client. The claim was paid under terms of the policy for reimbursement of applicable IRS penalty of $2,015 assessed to the taxpayer.
• An insured was responsible for a client’s quarterly sales tax return being filed late, thus causing the state to assess the client a penalty of over $3,500. The claim was paid under terms of the insured’s policy.
• An insured with the optional bookkeeping coverage made a bookkeeping error in calculating the beginning accounts receivable balance, which resulted in an understatement of gross receipts, which was carried through to the tax return. The IRS assessed a penalty. Under the terms of the optional bookkeeping coverage, the claim was settled for over $2,500.
Note: In cases where interest assessments are paid, the payment may represent a compromise due to the taxpayer having the use of the underpaid tax until the error is discovered.
Can you afford a lawsuit because you made an innocent mistake and were an easy target for someone trying to recover losses? Tax Preparers’ Errors and Omissions Insurance safeguards you against costly and time-consuming lawsuits. Even if the suit is not valid, you could still be faced with a legal bill for defending yourself. If you aren’t insured, you’ll pay defense costs out of your own pocket, win or lose.
For a nominal premium, you can purchase a policy with a limit which suits your needs. Protect yourself and those who depend on you now. Consider Tax Preparer E & O insurance to protect yourself against innocent mistakes plus defense costs:
(Number of Employees)
|Enrolled Agent||0.90 factor|
|Tax Preparer Association Member||0.90 factor|
|Enrolled Agent and Association Member||0.85 factor|
Additional Coverage Options:
$10,000/$20,000 $25,000/$50,000 $50,000/$100,000 $100,000/$200,000 1 Year Retroactive (included) (included) (included) (included) 2 Year Retroactive $125 $250 $375 $500 Bookkeeping 1-10% 1.15 factor 11-25% 1.25 factor 25% + 1.33 factor Extended Reporting 0.50 factor
This page contains only a brief summary of coverage and policy provisions. All statements herein are subject to the provisions, exclusions, and conditions of the applicable policy. Coverages afforded are only those for which application is made and for which a premium charge is paid as indicated in the Declarations of the policy.
IRS penalties against insured are not covered. Also, this is a claims made policy.
Complete our application here, sign, and fax or email to apply