As a professional tax preparer, you know that tax season can be a stressful time for both you and your clients. While you strive to complete their tax returns accurately, there’s always the possibility of an audit. IRS audits can occur for various reasons, including random selection through statistical analysis and related examinations involving transactions with other taxpayers.
Being selected for an audit doesn’t necessarily indicate a problem with the return but instead is a routine part of the IRS’s review process. Audits can be time-consuming, costly, and anxiety-inducing experiences for your clients. That’s where offering tax audit protection services can be a game-changer for your business.
What does tax audit protection do?
Tax audit protection, such as Audit Maintenance Pro or Protection Plus, are ancillary products you can offer alongside your tax preparation services. They provide your clients peace of mind by covering the basic costs associated with an IRS audit. While tax audit protection doesn’t always include legal representation it may include third-party representation before the IRS, assistance with document gathering, and expert guidance throughout the audit process from an Enrolled Agent or CPA.
Tax audit defense and tax audit insurance serve different purposes from tax audit protection. Audit defense offers comprehensive support, including legal representation and managing all communications with the IRS. In contrast, tax audit protection typically focuses on preventive measures and may not provide direct representation. While tax audit insurance can reimburse costs like legal fees and penalties, it does not include the level of direct support and advocacy that tax audit defense or protection provides.
If you’re ready to take your tax business to the next level and offer comprehensive audit support to your clients, consider adding tax audit protection services like Audit Maintenance Pro or Protection Plus to your offerings. You’re not only protecting your clients from the stress and financial burden of audits but also strengthening your position in the tax preparation industry.
Benefits of adding audit protection to your tax practice
Incorporating audit protection services into your tax practice offerings can improve client satisfaction, competitiveness, revenue generation, and work-life balance. It’s a win-win situation for both you and your clients.
Increased client satisfaction
One of the primary benefits of offering audit protection is increased client satisfaction. When you provide a service that eases your clients’ fears and worries, they’ll appreciate your dedication to their financial well-being. Knowing they have tax audit protection can make your clients feel more secure and confident in your tax preparation services.
Audit protection helps you maintain a positive relationship with your client, in the event of an audit. An audit can be a stressful and emotionally draining experience for your clients. The EAs or CPAs from your audit protection team will take the lead, walking you and your client through the process and minimizing friction .
Competitive advantage & enhanced professional reputation
In today’s competitive tax preparation industry, standing out from competitors is crucial. When potential clients are comparing tax preparers, offering audit protection services can tip the scales in your favor. It demonstrates that you’re proactive in addressing their concerns and committed to their financial stability. You also position yourself as someone who goes above and beyond to protect your client’s financial interests. This enhanced professional reputation can attract more clients and lead to positive word-of-mouth referrals.
Less stressful off-season
The off-season for tax preparers often involves a much-needed break from the hectic pace of tax filing deadlines. However, an unexpected audit of one of your clients can fill your off-season with additional work and stress. This is where audit protection can benefit both you and your clients.
When your clients face an audit, the audit protection provider steps in to handle the intricacies of the audit process. They interact directly with the IRS on behalf of your clients, ensuring that all necessary documentation and information are submitted accurately and promptly. This interaction can include communicating with IRS agents, addressing inquiries, and negotiating on behalf of your client to resolve any issues that may arise.
With the audit protection provider managing this crucial communication, you won’t need to take the lead on handling it personally. This reduces your stress and allows you to focus on other meaningful tasks during the off-season, such as professional development, continued education, or exploring new ways to expand your tax practice.
Additional revenue stream
Offering audit protection services helps more than just your clients — it’s also a smart business move for you. Presenting this service as a premium offering can significantly enhance its perceived value. Instead of simply listing it as an add-on, emphasize the peace of mind and security that comes with having expert representation if an audit occurs. Highlight how your clients can benefit from this protection, reinforcing the fact that it’s an investment in their financial well-being.
When determining how to structure your pricing, consider whether to charge a one-time fee per client or an annual fee. A one-time fee may be more appealing for clients seeking immediate reassurance, while a yearly fee can create a steady revenue stream for your tax business over time. Communicating the benefits of each model will help clients understand their options and make informed decisions.
TaxSlayer Pro’s partners, like Audit Maintenance Pro and Protection Plus, allow tax preparers to enroll and receive all marketing materials, supplies, and training at no extra cost. This support will help you effectively market this premium service, ensuring your clients recognize the value it adds to their overall tax preparation experience. By making audit protection a central feature of your offerings, you’re not just helping your clients but also increasing revenue for your tax business in a meaningful way.
Avoid compliance issues
Tax preparers must ensure compliance with tax regulations, as missteps can lead to audits, penalties, or legal trouble. Utilizing an audit protection provider can help you avoid overstepping legal boundaries. These providers specialize in understanding the nuances of tax laws and regulations, offering guidance that enables preparers to stay within compliance limits. Tax audit protection not only safeguards your clients but also keeps your business aligned with best practices in the industry.
What is not covered by tax audit protection products?
While audit protection offers numerous benefits, it’s essential to be transparent about what it does not cover. Both services provide audit assistance but have coverage limitations. Typically, audit protection does not cover situations involving fraud, intentional misrepresentation, or illegal activities.
Audit Maintenance Pro only provides coverage for IRS audits, not state audits. Additionally, Audit Maintenance Pro does not provide in-person representation during audits (without an additional fee) and does not cover additional taxes, penalties, or interest resulting from the audit. Protection Plus excludes non-resident, amended, or non-individual tax returns like corporate or trust returns. It also does not cover cases where the taxpayer or preparer knew additional taxes were owed before enrollment. Additionally, Protection Plus does not support returns involving fraud, gross negligence, or intentional misrepresentation.
Be sure to communicate these limitations clearly to your clients to manage their expectations and avoid misunderstandings.
